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Managerialfinance 9 5 the process of a public

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Unformatted text preview: gerial Finance 9-5 The Process of A Public Offering Steps in Public Offering 1. Pre-underwriting conferences 2. Registration statements 3. Pricing the issue 4. Public offering and sale 5. Market stabilization Managerial Finance Time Several months 20-day waiting period Usually on the 20th day After the 20th day 30 days after offering 9-6 An Example of a Tombstone Advertisement Managerial Finance 9-7 19.2 Alternative Issue Methods There are two kinds of public issues: The general cash offer The rights offer Almost all debt is sold in general cash offerings. Managerial Finance 9-8 19.3 The Cash Offer There are two methods for issuing securities for cash: Firm Commitment Best Efforts There are two methods for selecting an underwriter Competitive Negotiated Managerial Finance 9-9 Firm Commitment Under a firm commitment underwriting, the investment bank buys the securities outright from the issuing firm. Obviously, they need to make a profit, so they buy at “wholesale” and try to resell at “retail”. To...
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