FIN 420 - Notes - Lesson M1L3.docx - FIN 420 Notes Lesson M1L3 Shelf registration This is where a company receives authorization to issue a certain

FIN 420 - Notes - Lesson M1L3.docx - FIN 420 Notes Lesson...

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FIN 420 - Notes - Lesson M1L3 Shelf registration - This is where a company receives authorization to issue a certain number of shares. Instead of issuing all of the shares at once, as in an IPO, the company can break the shares to be issue into smaller lots, groups of shares, to reduce both market impact and the costs of issuing those new shares Regulation D (Reg D) private placement - Stocks can be sold to the general public, but Reg D private placements can only be sold to select groups of investors. An accredited investor will pass the 1-2-3 test. They must either have: 1. $1,000,000 net worth, 2. $200,000 of annual AGI (taxable income) for a single taxpayer, or 3. $300,000 of annual AGI (taxable income) for a married taxpayer filing jointly (MFJ) Capital allocation process - This is the process whereby buyers and sellers are “introduced” and a sale is arranged at the most favorable price possible Direct search market - In a direct search market, buyers and sellers must find each other on their own. A good example of this type of marketplace is Craigslist.
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  • Fall '09
  • JOHNSON,KAY

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