文档介绍：19
Corporate Financial Management 3e
Emery Finnerty Stowe
Issuing Securities and the Role of Investment Banking
Learning Objectives
Describe methods for issuing new securities.
Summarize features mon stock.
Explain differences between general cash offers and rights offerings.
Describe the role of the investment banker in the issuance of securities.
Describe going private transactions.
Summarize features of preferred stock.
Chapter Outline
The Long-Term Financing Menu
Stock
Issuing Securities
Investment Banking
and the Cost of Issuing Securities
Private Placements
Rights Issues
Dilution
Going Public and Going Private
Preferred Stock
Investment Banking and the Principles of Finance
Two-Sided Transactions
Use acceptable price and other terms.
Signaling
Issuing stock can be interpreted as a negative signal about the firm’s future prospects.
Valuable Ideas
Look for value-creating innovative securities.
Options
Incorporate the value of options connected to securities.
Investment Banking and the Principles of Finance
Comparative Advantage
Underwriters may offer value if they can bear issuing risk more cheaply.
Risk-Return Trade-Off
Innovative securities may create value if they can reduce investor risk.
Capital Market Efficiency
A market price is the best measure of value.
Raising Long-Term Funds Externally
Main sources:
Common stock
Preferred stock
Debt
Flotation costs
Fixed costs
Variable costs
Issue Methods
Public offering
Private placement
Public Offering
General cash offer
Securities are offered to investors at large.
Underwriters are usually used.
Rights offering
mon stock is sold to existing stockholders.
Underwriters are sometimes used.
General Cash Offers
Decide what to issue:
Amount of capital to be raised
Type of security
Obtain required approvals.
File a registration statement:
Must be approved by the SEC prior to the actual sale
Preliminary prospectus
Red herring
General Cash Offers
Determine