2CHAPTER 10Stock Offerings and Investor Monitoring
3CHAPTER 10 OVERVIEWThis chapter will:A.Explain how stock markets facilitate secondary market tradingB.Describe investor participation in the stock marketsC. Describe the process of initial public offerings D. Describe the process of secondary offeringsE. Explain how the stock market is used to monitor and control firmsF. Describe the globalization of stock markets
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4A. Stock Markets Facilitate Secondary Market Trading1. Ownership and Voting Rightsa. Common stock holdersonly owners permitted to vote on key matters facing the firm2. Preferred Stocka.Does not allow for voting rightsb.Less risk to firm in issuing preferredc.Preferred dividends are not a tax deductible expense to the firm