FNCE30002 Lecture Notes - Lecture 1: Listing Rules, Shortage, Systematic Risk
Document Summary
Raising capital: equity: systematic risk can demand compensation for, diversifiable risk can be eliminated through portfolios. Initial public offerings (ipos: seasoned equity offerings (seos) Differentiate between forms of capital based on voting, return and risk. Subordinated right to a return on capital. Subordinated right to a return of capital on liquidation: preference shareholders have inferior voting rights, equity is most risky form of investment invest because expected return is higher than debt due to greater risk. S t e p 1 : e n g a g e a n i n v e s t m e n t b a n k e r. Investment banker manages float process, helps to prepare the prospectus and provides services such as underwriting. (cid:1865)(cid:1853)(cid:1870)(cid:1863)(cid:1857)(cid:1872) (cid:1855)(cid:1853)(cid:1868)(cid:1872)(cid:1853)(cid:1864)(cid:1871)(cid:1853)(cid:1872)(cid:1867)(cid:1866)=(cid:1866)(cid:1867). (cid:1867)(cid:1858) (cid:1871)h(cid:1853)(cid:1870)(cid:1857)(cid:1871) (cid:1867)(cid:1866) (cid:1871)(cid:1871)(cid:1873)(cid:1857) (cid:1874)(cid:1853)(cid:1864)(cid:1873)(cid:1857) (cid:1867)(cid:1858) (cid:1857)(cid:1853)(cid:1855)h (cid:1871)h(cid:1853)(cid:1870)(cid:1857) Is liable to purchase any shares that remain unsold at the conclusion of the float.
