Lecture Business finance - Chapter 10: Sources of long-term finance: Equity

Chapter 10 Sources of Long-Term Finance: Equity Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 10–1 Prepared by Dr Buly Cardak Learning Objectives • Outline the characteristics of ordinary shares. • Explain the advantages and disadvantages of equity as a source of finance. • Outline the main characteristics of preference shares. • Outline the main sources of private equity in the Australian market. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 10–2 Prepared by Dr Buly Cardak Learning Objectives (cont.) • Be familiar with the information that must be disclosed when issuing securities. • Outline the process of floating a public company. • Discuss alternative explanations for the underpricing of initial public offerings. • Explain how companies raise capital through rights issues, placements, share purchase plans and share options. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 10–3 Prepared by Dr Buly Cardak Learning Objectives (cont.) • Outline the different types of employee share plans. • Outline the advantages of internal equity as a source of finance. • Outline the effects of bonus issues, share splits and share consolidations. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 10–4 Prepared by Dr Buly Cardak The Characteristics of Ordinary Shares • Ordinary shares represent an ownership interest in a business. • Residual claim – The holder has a claim to the profits of the business (through dividends). In the event of failure, the holder has a claim to the residual value of the assets after claims of all other entitled parties are met. Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a Business Finance 9e by Peirson, Brown, Easton, Howard and Pinder 10–5 Prepared by Dr Buly Cardak ... - tailieumienphi.vn