ACCG308 Study Guide - Final Guide: Arbitrage, Monopsony, Investor

• School: Macquarie University
• Department: Accounting and Corporate Governance
• Course: ACCG308
• Professor: All

Document Summary

Characteristics: permanent contribution of capital, ordinary shareholders have full voting rights, shareholders hold a residual claim: subordinated right to a return on capital, and return of capital on liquidation. Choosing method of equity raising: costs, time to implement, transfer of votes and wealth. Initial public offerings (ipo: diversification, capital gains for owners. How to price: fixed pricing: tradition method, specialist sets price, prospectus sent out and offers are received. Constrained open pricing: indicative range is provided and investors bid within the range separate institutional and retail book build. If issue price: (cid:1857)(cid:1870)(cid:1855)(cid:1857)(cid:1866)(cid:1872)(cid:1853)(cid:1859)(cid:1857) (cid:1873)(cid:1866)(cid:1856)(cid:1857)(cid:1870)(cid:1868)(cid:1870)(cid:1855)(cid:1866)(cid:1859) = (cid:1864)(cid:1871)(cid:1872)(cid:1866)(cid:1859) (cid:1868)(cid:1870)(cid:1855)(cid:1857) (cid:1867)(cid:1858)(cid:1858)(cid:1857)(cid:1870) (cid:1868)(cid:1870)(cid:1855)(cid:1857) (cid:1867)(cid:1858)(cid:1858)(cid:1857)(cid:1870) (cid:1868)(cid:1870)(cid:1855)(cid:1857: too high: capital not raised, or if underwritten, suffers from overhang, too low: money left on the table. Issuer may be uncertain as to true value, and needs to find true value from institutional investors. I(cid:374)(cid:448)esto(cid:396)s (cid:449)o(cid:374)(cid:859)t (cid:449)a(cid:374)t to (cid:396)e(cid:448)eal (cid:858)t(cid:396)ue p(cid:396)i(cid:272)e(cid:859) if the(cid:455) k(cid:374)o(cid:449) this (cid:449)ill o(cid:374)l(cid:455) i(cid:374)(cid:272)(cid:396)ease the price.