Principles of Corporate Finance

Topics Covered w Venture Capital w The Initial Public Offering w The Underwriters w General Cash Offers w Rights Issue ...

Venture Capital Venture Capital Money invested to finance a new firm ...

Venture Capital Since success of a new firm is highly dependent on the effort of the managers, restrictions are placed on manage ...

Venture Capital Value 2.0 Value 2.0 Other assets 1.0 Your original equity 1.0 Cash from new equity 1.0 New equity from venture c ...

Venture Capital Value 14.0 Value 14.0 Other assets 9.0 Your original equity 5.0 Fixed assets 1.0 Equity from 1st stage 5.0 Cash ...

Initial Offering Initial Public Offering (IPO) - First offering of stock to the general public. Underwriter - Firm that buys an ...

The Underwriters All Underwriters 1,293 Chase 33 Donaldson Lufkin Jenrette 46 Bear Stearns 58 Credit Suisse First Boston 68 JPMo ...

The Underwriters All Underwriters 496 Paribas 18 Lehman Brothers 18 ABN AMRO Hoare 22 Morgan Stanley 23 JPMorgan 24 Credit Suiss ...

Initial Offering Average Expenses on 1767 IPOs from 1990-1994 Value of Issues ($mil) Direct Costs (%) Avg First Day Return (%) T ...

Tombstone ...

General Cash Offers Seasoned Offering - Sale of securities by a firm that is already publicly traded. General Cash Offer - Sale ...

Underwriting Spreads Gross underwriter spreads of selected issues, 1998 Type Company millions of dollarsIssue amount, spread, pe ...

Rights Issue Rights Issue - Issue of securities offered only to current stockholders. ...

Rights Issue Rights Issue - Issue of securities offered only to current stockholders. Example - AEP Corp currently has 11 millio ...

Rights Issue ⇒Current Market Value = 2mil x $24 = $264 mil ⇒Total Shares = 11 mil + 1 mil = 12 mil ⇒Amount of new funds = 1 mil ...

u The Dividend Controversy Principles of Corporate Finance Brealey and Myers Sixth Edition Chapter 16 ...

Topics Covered w How Dividends Are Paid w How Do Companies Decide on Dividend Payments? w Information in Dividends and Stock Rep ...

Types of Dividends §Cash Div §Regular Cash Div §Special Cash Div §Stock Div §Stock Repurchase (3 methods) Buy shares on the mar ...

Dividend Payments Cash Dividend - Payment of cash by the firm to its shareholders. ...

Dividend Payments Cash Dividend - Payment of cash by the firm to its shareholders. Ex-Dividend Date - Date that determines wheth ...