chapter 13 planning equity financing copyright © 2011 by the mcgraw-hill companies, inc. all rights...
TRANSCRIPT
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Chapter 13Chapter 13
Planning Equity Financing
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
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Business is organized to achieve certain objectivesBusiness is organized to achieve certain objectives
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Business StrategyBusiness Strategy
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Companies acquire funds from three sourcesCompanies acquire funds from three sources
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Two financing categoriesTwo financing categories
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13-6
What is the Risk of Debt Financing?What is the Risk of Debt Financing?
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Debt-to-Equity RatioDebt-to-Equity Ratio
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Times Interest Earned Ratio-earnings before interest and taxes divided by interest expenseTimes Interest Earned Ratio-earnings before interest and taxes divided by interest expense
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13-9
What is the Reward of Debt Financing?What is the Reward of Debt Financing?
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Return on Owner’s Equity RatioReturn on Owner’s Equity Ratio
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Reward of Equity FinancingReward of Equity Financing
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Risk of Equity FinancingRisk of Equity Financing
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Equity FinancingEquity Financing
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13-14
What are the Advantages of Sole Proprietorships and Partnerships?What are the Advantages of Sole Proprietorships and Partnerships?
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13-15
What are the Disadvantages of Sole Proprietorships and Partnerships?What are the Disadvantages of Sole Proprietorships and Partnerships?
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13-16
What are the Advantages and Disadvantages of Corporations?What are the Advantages and Disadvantages of Corporations?
AdvantagesAdvantages DisadvantagesDisadvantages
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Pro forma Statement of Owners” (Partners) equityPro forma Statement of Owners” (Partners) equity
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13-18
How do Partnerships Determine how Profits /Losses will be Allocated to the Partners?
How do Partnerships Determine how Profits /Losses will be Allocated to the Partners?
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ExercisesExercises
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ExercisesExercises
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13-21
What are the Types of Stock Issued by Corporations?What are the Types of Stock Issued by Corporations?
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13-22
What are the Most Common Preferences given to Preferred Stock?What are the Most Common Preferences given to Preferred Stock?
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13-23
What are the Different “Numbers of Shares” Concerning Stock?What are the Different “Numbers of Shares” Concerning Stock?
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13-24
What is Treasury Stock?What is Treasury Stock?
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13-25
What are the “Values” Associated with Stock?What are the “Values” Associated with Stock?
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13-26
What Types of Dividends are Distributed?What Types of Dividends are Distributed?
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13-27
What are the 3 Dates Associated with Dividends?What are the 3 Dates Associated with Dividends?
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13-28
What is the Difference Between a Stock Dividend and a Stock Split?What is the Difference Between a Stock Dividend and a Stock Split?
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Exercise 13-10Exercise 13-10
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Exercise 13-13Exercise 13-13
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Exercise 13-14Exercise 13-14