ECON 2560 Chapter Notes -Initial Public Offering, Venture Capital
12 Apr 2014
School
Department
Course
Professor
Document Summary
Ch 15 venture capital, ipos & seasoned offerings. Initial public offering (ipo) is called a primary offer when new shares are sold to raise additional cash for the company. It is a secondary offer when the company"s founders and the venture capitalist cash in on some of their gains by selling share. = total value of the company value of the shares that have been sold to public. A bank wants to rebuild its capital by raising . 2 billion. If you are a shareholder of the bank, you have the right to buy 11 additional shares for every 18 shares that you initially owned. 10 billion shares outstanding, which were priced . 725 each. The new issue increased the total number of shares by 10 billion x 11/18 = 6. 11 billion, therefore they raised 6. 11 x 2 = . 22 billion. The total value of bank is equal to . 25 +
