Bristow Ent Fin Ch8

Bristow Ent Fin Ch8 - Chapter 8 RAISING FUNDS EXTERNALLY:...

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Chapter 8 RAISING FUNDS EXTERNALLY: AN OVERVIEW OF INVESTMENT BANKING
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2 In order to go “public” with an offering of Stock or Bonds, you must be approved by the Securities Exchange Commission (SEC) in Washington - if you are selling securities outside of your state - and/or by the state regulatory commission of your state. e.g., The California Department of Corporations. GOING PUBLIC
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3 The directive of the SEC is “Full disclosure”. The directive of the California Department of Corporations is “Fairness”. California is the toughest regulator of all the states. An Intra-State offering : If you sell securities only in California, you only need to register in California. If this is extensive, however, it can be too much trouble - someone may sell out of state. GOING PUBLIC
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4 Advantages and disadvantages of: Private placements: Speed Confidentiality Easier to change covenants More costly in terms of interest rate or stock P/E. Public offerings: Have a “public stock” for borrowing, acquisitions. Less costly in terms of lower interest or higher P/E Slower process Loss of confidentiality Difficult and expensive to make all the “Filings” GOING PUBLIC -  Advantages & Disadvantages
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5 Two sources of external funds: 1. Private placement through a “Reg. D Exemption” 2. Going Public EXTERNAL FUNDS
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6 1) Private placement through a “Reg. D Exemption” PRIVATE PLACEMENT B. No limit on accredited; up to 35 unaccredited. Accredited must
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Bristow Ent Fin Ch8 - Chapter 8 RAISING FUNDS EXTERNALLY:...

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