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Time: 6 hours
Level: Masters
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 Introduction Resource- This unit looks at equity finance – the range of equity instruments and markets available to a company. First, we look at private equity and the role of venture capital companies that provide such finance....
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| | 1 Understanding equity issues
- 1.1 Equity instruments Resource
- Both public and private incorporated companies can issue shares in order to finance their operations. Those who invest in shares expect a return blended from dividend yield and capital growth – although...
- 1.2 Staying private – private equity and venture capital Resource
- For many companies – particularly in Europe and Asia – private equity together with retained earnings have been a sufficient source of capitalisation, allowing these companies to avoid listing on a stock...
- 1.3 ‘Going public’ Resource
- For many companies a point may be reached, particularly if the company has grown significantly in size and has aspirations for further expansion, to seek equity finance through an initial public offering...
- 1.4 Seasoned equity offerings Resource
- The issuance of additional shares is called a seasoned or secondary equity offering (SEO). SEOs are common in the London market, but less common in the USA. In some countries, including the UK, one form...
- 1.5 Cross-listing Resource
- For many companies, particularly MNCs, there are attractions in having a share listing on more than one stock exchange. The last decade has witnessed an increase in such cross-listings globally.
- 1.6 Equity buybacks, de-listing and reversion to a ‘private’ company Resource
- Once its shares have been issued, a company has the option to buy back shares. Buybacks will occur if the company believes that it is overcapitalised and cannot generate a sufficiently high return on capital...
- 1.7 Monitoring equity performance Resource
- For those equities in issue their current market value and some indicators of their performance are provided in the daily press. Table 3 shows the closing levels and the volume of shares traded in respect...
- 1.8 Summary Resource
- In this unit we have looked at how companies raise equity finance.
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| | References and Acknowledgements | |
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