BU393 Study Guide - Final Guide: Seasoned Equity Offering, Callable Bond, Tax Shield
Document Summary
5. 0 chapter 15, 20, 21: long term financing debt and equity. Long term financing: an introduction : internal and external financing in canada, common stock (features, shareholder rights, share classes, long term debt, preferred shares. Issuing equity securities : the basic procedure (public and private offerings, new equity sales and the value of the firm, ipos, features of common stock o. Pecking order theory: firms prefer to finance with internally generated cash flow rather than outside sources of funds. If a firm has excess cash, it will tend to pay off debt before repurchasing shares. If external financing is needed, firms tend to issue first straight debt, then convertible debt, then equity common shareholders: firm owners and residual claimants. Right to share proportionally in dividends paid or in assets after all liabilities are paid. In theory, have control over operations of company. Right to share proportionally in any new stock sold when approved by a board of directors.
