The manner in which a decision of a privately held company to go public affect company.

Question

Which is false about long-term sources of a firm’s capital? a. Preferred shares are securities whose intrinsic value is based on prospective earnings b. Some types of bank loans may require collateral from potential debtors c. Retained earnings are internal sources of funding that can be utilized for expansion d. All types of corporations may issue equity securities to the public

Answer 1

Question

Chapter 18, Problem 4Q

a)

Summary Introduction

To determine: The manner in which a decision of a privately held company to go public affect company.

b)

Summary Introduction

To determine: The manner in which the increasing institutionalization of the “buy side” of the stock and bond markets affect company.

c)

Summary Introduction

To determine: The manner in which the trend toward financial conglomerates as opposed to stand-alone investment banking houses affect company.

d)

Summary Introduction

To determine: The manner in which Elimination of the pre-emptive right affect company.

e)

Summary Introduction

To determine: The manner in which the introduction in 1981 of shelf registration of securities affect company.

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Which is false about long-term sources of a firm’s capital? a. Preferred shares are securities whose intrinsic value is based on prospective earnings b. Some types of bank loans may require collateral from potential debtors c. Retained earnings are internal sources of funding that can be utilized for expansion d. All types of corporations may issue equity securities to the public

How do you think each of the following items would affect a company’sability to attract new capital and the flotation costs involved in doing so?a. A decision of a privately held company to go publicb. The increasing institutionalization of the “buy side” of the stock andbond marketsc. The trend toward financial conglomerates as opposed to stand-aloneinvestment banking housesd. Elimination of the preemptive righte. The introduction in 1981 of shelf registration of securities

Discuss whether the director's view (Miss Kay) that issuing traded bonds will decrease the weighted average cost of capital ATC Bhd and thereby increase the value of the company. Discussion should consider from the viewpoint of: i. Traditional ii. Modigliani & Miller ii. Market imperfections iv. Pecking order theory

Answer 2

Question

Chapter 18, Problem 4Q

a)

Summary Introduction

To determine: The manner in which a decision of a privately held company to go public affect company.

b)

Summary Introduction

To determine: The manner in which the increasing institutionalization of the “buy side” of the stock and bond markets affect company.

c)

Summary Introduction

To determine: The manner in which the trend toward financial conglomerates as opposed to stand-alone investment banking houses affect company.

d)

Summary Introduction

To determine: The manner in which Elimination of the pre-emptive right affect company.

e)

Summary Introduction

To determine: The manner in which the introduction in 1981 of shelf registration of securities affect company.

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Answer 3

Question

Chapter 18, Problem 4Q

a)

Summary Introduction

To determine: The manner in which a decision of a privately held company to go public affect company.

b)

Summary Introduction

To determine: The manner in which the increasing institutionalization of the “buy side” of the stock and bond markets affect company.

c)

Summary Introduction

To determine: The manner in which the trend toward financial conglomerates as opposed to stand-alone investment banking houses affect company.

d)

Summary Introduction

To determine: The manner in which Elimination of the pre-emptive right affect company.

e)

Summary Introduction

To determine: The manner in which the introduction in 1981 of shelf registration of securities affect company.

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Answer 4

Question

Chapter 18, Problem 4Q

a)

Summary Introduction

To determine: The manner in which a decision of a privately held company to go public affect company.

b)

Summary Introduction

To determine: The manner in which the increasing institutionalization of the “buy side” of the stock and bond markets affect company.

c)

Summary Introduction

To determine: The manner in which the trend toward financial conglomerates as opposed to stand-alone investment banking houses affect company.

d)

Summary Introduction

To determine: The manner in which Elimination of the pre-emptive right affect company.

e)

Summary Introduction

To determine: The manner in which the introduction in 1981 of shelf registration of securities affect company.

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Answer 5

Chapter 18, Problem 4Q

a)

Summary Introduction

To determine: The manner in which a decision of a privately held company to go public affect company.

b)

Summary Introduction

To determine: The manner in which the increasing institutionalization of the “buy side” of the stock and bond markets affect company.

c)

Summary Introduction

To determine: The manner in which the trend toward financial conglomerates as opposed to stand-alone investment banking houses affect company.

d)

Summary Introduction

To determine: The manner in which Elimination of the pre-emptive right affect company.

e)

Summary Introduction

To determine: The manner in which the introduction in 1981 of shelf registration of securities affect company.

Answer 6

Chapter 18, Problem 4Q

a)

Summary Introduction

To determine: The manner in which a decision of a privately held company to go public affect company.

Answer 7

Chapter 18, Problem 4Q

a)

Summary Introduction

To determine: The manner in which a decision of a privately held company to go public affect company.

Answer 8

b)

Summary Introduction

To determine: The manner in which the increasing institutionalization of the “buy side” of the stock and bond markets affect company.

Answer 9

b)

Summary Introduction

To determine: The manner in which the increasing institutionalization of the “buy side” of the stock and bond markets affect company.

Answer 10

c)

Summary Introduction

To determine: The manner in which the trend toward financial conglomerates as opposed to stand-alone investment banking houses affect company.

Answer 11

c)

Summary Introduction

To determine: The manner in which the trend toward financial conglomerates as opposed to stand-alone investment banking houses affect company.

Answer 12

d)

Summary Introduction

To determine: The manner in which Elimination of the pre-emptive right affect company.

Answer 13

d)

Summary Introduction

To determine: The manner in which Elimination of the pre-emptive right affect company.

Answer 14

e)

Summary Introduction

To determine: The manner in which the introduction in 1981 of shelf registration of securities affect company.

Answer 15

e)

Summary Introduction

To determine: The manner in which the introduction in 1981 of shelf registration of securities affect company.

Answer 16

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Answer 17

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Ch. 18 - Prob. 1Q Ch. 18 - Prob. 2Q Ch. 18 - Prob. 3Q Ch. 18 - Prob. 4Q Ch. 18 - Prob. 5Q Ch. 18 - Prob. 2P Ch. 18 - Benjamin Garcia’s start-up business is succeeding,...Ch. 18 - Prob. 1MC Ch. 18 - Prob. 2MC Ch. 18 - Prob. 3MC

The manner in which a decision of a privately held company to go public affect company.

Solution Summary: The author analyzes the manner in which a privately held company's decision to go public affects its ability to attract capital and reduce the cost of flotation.

To determine: The manner in which a decision of a privately held company to go public affect company.

To determine: The manner in which the increasing institutionalization of the “buy side” of the stock and bond markets affect company.

To determine: The manner in which the trend toward financial conglomerates as opposed to stand-alone investment banking houses affect company.

To determine: The manner in which Elimination of the pre-emptive right affect company.

To determine: The manner in which the introduction in 1981 of shelf registration of securities affect company.

Chapter 18 Solutions