BSM 600 Study Guide - Final Guide: Initial Public Offering, Callable Bond, Sinking Fund
7 Apr 2016
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Strategy as a fit: cannot change external environment so you have to fit your firm within it. Strategy as a stretch: stretching resources to the max extent possible. How to seek info: go outside the firm. Why need: r&d, mergers and acquisitions inorganic growth, growth (organic) new markets and products. Go to banks to show you have experience. Banks debt financing timely payments principal + interest. Capital markets trying to get money from investors: common stock. If company has made profits, can give dividends, have voting rights. Can be a medium to act as change. Told in advance what dividends you"re given; cumulative dividends if not given in one year. If company is liquidated, then have more access to remainder of assets after selling them off. Debt issued by firms, backed by collateral if firm goes bankrupt. Callable bond have the option of calling it back. Initial public offering (ipo) existing stock in secondary market.
