class 7&8 (raising long term finance)
Post on 20-Jun-2015
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Raising Long Term Finance
Venture Capital
• High risk and high return profile• Active interest in guiding • Liquidate its investment after 3 to 7 years• Appears synonymous with tech and bio-tech
INITAIL PUBLIC ISSUE
• Benefits – Access to capital– Respectability– Investors recognition / visibility– Opportunity– Liquidity
• Disadvantages– Dilution– Loss of flexibility– Disclosures– Public pressure– Costs
Cost associated to public issue
• Underwriting expenses• Brokers• Fees to manager (investment banker) • Fees for registrars • Printing expenses• Postage expenses• Advertising and publicity• Listing fee
Book building
• Phases in IPO pricing
RIGHTS ISSUE
PRIVATE PLACEMENT
BOUGHT-OUT DEALS
Term loan
• Rate of interest on the basis of credit risk
Bonus shares
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