FCSE 3120 Lecture Notes - Lecture 26: Initial Public Offering, Private Placement, Financial Statement

• School: UCM
• Department: Family and Consumer Sciences Education
• Course: FCSE 3120
• Professor: Gremaud

Document Summary

3. 1 how firms issue securities: primary vs. Issuing firm doesn"t receive proceeds, is not directly involved. 3. 1 how firms issue securities: privately held firms, up to 499 shareholders, private placement: primary offerings sold directly to a small group of investors. Fewer obligations to release financial statements to public. 3. 1 how firms issue securities: publicly traded companies. Sell securities to the general public; allow investors to trade shares in securities markets. Initial public offering: first sale of stock by a formerly private company: underwriters: purchase securities from issuing company and resell them, prospectus: description of firm and security being issued. Figure 3. 1 relationship among a firm issuing securities, the underwriters, and the public. Security is preregistered and then may be offered at any time within the next two years: 24-hour notice: any or all of preregistered amount may be offered. Introduced in 1982: allows timing of issues. Easier to market issue; costly to issuing firm.