PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
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Question
Chapter 33, Problem 11PS
Summary Introduction
To explain: The way a shareholder might gain control of Company Z.
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Students have asked these similar questions
3. What are the stages in organizing a corporation?
4. What are the basic rights of a shareholder?
5. "what are the considerations that may be received in exchanged for share capital? What are the
measurement bases for such exchanges?
6. Differentiate an ordinary share capital from a preference share capital.
Describe what is IPO and what is involved in the IPO process. Do you think that it is better to buy shares in an IPO or shares in companies that are already listed on the stock exchanges? Why?
Which of the following is closest to IFRS 3 Business Combinations definition of control?
A company is deemed to have control over another only when it owns a majority of the voting shares of another company.
B. A company is deemed to have control when it can elect a majority of the Board members of another company.
C. Control is the ability to direct the activities of a company that most significantly affect the investor's returns.
D. Control exists only when a company has the continuing power to determine the operating and financing policies of another company and attempts to exercise such powers.
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- Why would a corporation have multiple stock share classes? What are your thoughts??arrow_forwardHow much is the total shareholders’ equity of RED Corporation?arrow_forwardWhen an investor is deemed to have control" over an investee, GAAP requires presentation of consolidated financial statements. Which of the following would not be considered an indicator of control?\\nSelect one:\\nA. The investor owns 40% of the investee's stock and the rest is owned by the investee's founder.\\nB. The investor has majority interest in the investee.\\nC. Instead of owning stock, a company licenses technology to another company in an agreement allowing the licensor to appoint a majority of the licensee's board of directors.\\nD. The investor owns 40% of the Investee's stock and the rest is owned by a large number of small investors.arrow_forward
- A share of common stock in a firm represents an ownership interest in that firm and allows stockholders to i) vote. ii) receive dividends. iii) receive interest payments.arrow_forwardWhich of the following represents one of the basic rights of stockholders? a. Stockholders may sell their stock back to the company if they wish. b. Stockholders may authorize a business contract on behalf of the corporation. c. Stockholders may determine at what price the company issues stock. d. Stockholders may participate in management by voting on corporate matters.arrow_forwardREQUIRED: How much is the total shareholders’ equity of RED Corporation?arrow_forward
- This topic is about Corporation. Please answer the ff questions (check the pic for the problem) QUESTIONS: How much is the total paid up capital or contributed capital? How much is the premium per share on share capital issued and subscribed? How much is the total share premium on issued share capital?arrow_forwardThe excess of issue price over par of common stock is termed a(n) a. income O b. premium C. discount O d. deficitarrow_forwardThe cost of equity is the rate associated with what the shareholders expect the corporation to earn in order for that shareholder to maintain ownership in the company. True / Falsearrow_forward
- What other techniques can be applied to compute the intrinsic value of shares of the company?arrow_forwardIdentify three reasons and benefits why a firm might buy back its own common stock shares.arrow_forwardWhat are the advantages of bringing IPO into company? What are the advantages and disadvantages of IPO? Why Companies bring IPO, share valid reasons?arrow_forward
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