Securities+and+Corporate+Finance

Securities+and+Corporate+Finance - Securities and Corporate...

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Securities and Corporate Finance Stocks, Bonds and the Financial Markets
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Securities What are securities? Claim on the business by an investor Equity instruments Shares (stocks) of a corporation Indicate a share in ownership Debt instruments bonds, debentures Indicate a right to be paid from corporate assets
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Securities Shares Part ownership in a corporate Owning a share may give the holder The right to vote at corporate meetings The right to receive dividends The right to receive a share of the remaining  assets if the corporation is wound up or  dissolved
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Securities Debt Instruments Bond evidences a debt owed to holder by the  corporation Debenture also evidences the debt, but in  addition grants a security interest in assets of  the corporation No ownership interest, but a right to be paid  before any shareholders if the corporation is  wound up or dissolved
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Securities Why Would the Corporation Sell  Securities? Corporation wishes to raise money Corporation wishes to sell off part of its  business, so it sells its shares in that  business
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Securities Why Would Someone Wish to Buy  Securities Purchaser wants to invest money, with the  hope of making more Purchaser wants to acquire a business by  purchasing its shares
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Securities Markets for Securities Primary market Corporation issues the security Purchasers pay the corporation for the security,  and the issuer keeps the money Secondary market Owner sells the security in the market to  someone else Owner, not the issuer, keeps the money
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Securities Making Money from Securities Equity shares Dividends Capital appreciation Debt instruments Interest on the loan Conversion rights, to change the debt  instrument into shares
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Securities Making Money from Securities Value of shares Expected future performance Value now Asset value on balance sheet Cash flows Business as a going concern – takeovers Greed, fear and the herd
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This note was uploaded on 05/22/2010 for the course MGT MGTA04 taught by Professor Bovaid during the Spring '10 term at University of Toronto- Toronto.

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Securities+and+Corporate+Finance - Securities and Corporate...

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