公司金融总结 期末复习题

CHAPTER 1. Issuing Securities to the Public

✓Public and Private Sources of Capital: registered securities（registered with SEC）vs bank loans or private placements私募（cannot be traded on public markets）.

✓Management gets the approval of the Board of Directors.

The firm prepares and files a registration statement with the

SEC.

The SEC studies th e registration statement during the waiting period. The firm may distribute copies of a preliminary pr ospectus.

The firm prepares and files an amended registration statement with the SEC if needed.

If everything is copasetic with the SEC, a price is set and a full-fledged selling effort gets underway. A final prospectus must accompany the delivery of securities.

Marketi ng the issue: road shows and tombstone advertisements are used during and after the waiting period.

✓Seasoned Offering (SEO)。All IPOs are cash offers. SEOs can be made by using either cash offers or rights offers. Almost all debt is sold in general cash offerings.

✓There are three methods for issuing securities for cash: Firm Commitment(underwrite), Best Efforts, Dutch Auction (uniform price auction）

✓Green Shoe provision gives the members of the underwriting group the option to purchase additional shares at the offering price.

✓nonventure equity investment:

Distressed investment

Mezzanine capital

Leverage buyout

✓Venture Capital

Wealthy families (Rockefeller family)

A number of private partnerships and corporations (American Research and Development, ARD)

Venture capital subsidiaries of large industrial or financial corporations

Angel investors (informal venture capitalists)

✓Seed-Money Stage, Start-Up, First-Round Financing.....Fourth-Round Financing (bridge financing).

CHAPTER 2. Long-Term Debt

✓The registration statement for a public issue of bonds must include an indenture ( The basic terms of the bonds, A description of property used as security, The sinking funds arrangement, The call provisions, Covenants), a written agreement between the borrower and a trust company.

✓The ownership (name) of the owner of the a registered bond is recorded, while that of a bearer bond is not.

✓Accrued interest 应计利息collateral抵押品

✓Clean price: The quoted price, which is the dirty price net of accrued interest

✓Investment Grade Bond

✓Any bond with a rating less than and equal to an S&P “BB”or a Moody’s “Ba”is a junk bond (high-yield bond).

✓If an investor has a fix amount of liability in the future, zero coupon bond reduces the interest risk.

✓Zero coupon bonds save tax payments for the investors.

✓Life insurance companies and pension funds dominate the private placement segment of the bond market. Commercial banks are significant participants in the term loan market.

✓A syndicated loan may be a line of credit.

CHAPTER 3. Leasing

✓Operating Leases VS Financial Leases (Capital Leases)

✓Leveraged Leases: Lessor borrows from lender to partially finance purchase. The lenders typically use a nonrecourse loan. This means that the lessor is not obligated to the lender in case of a default

✓The value of guarantee is the value of a put option on the assets of the firm.

✓When the equity has a delta significantly smaller than 1, any value created will go partially to bondholders.

✓Diversification works in the sense that it reduces the volatility of the firm’s return on assets.

✓Financial merger creates value only if the combined firm bears more debt after merger to take advantage of more tax shield.

✓In an efficient market without frictions (tax and bankruptcy cost), a convertible bond is just a package of straight bond and an option to buy common stocks.

✓If there is no tax and bankruptcy cost convertible debt does not have ex ante advantage.