Fundamentals of Financial Management, Third Edition

15

Corporate Securities

OBJECTIVES

To focus on the main features of equity shares in general and in particular on the pre-emptive rights of the equity shareholders

To discuss the features of preference shares

To discuss the features of debentures and also the economic size of their issue

To explain the process of retirement of debt

To describe warrants and their usefulness

To explain international equities and international bonds

After the discussion of the optimal mix of share capital and borrowed capital, it is worth discussing how the share capital and the borrowed capital are raised. Share capital is primarily raised through the sale of ordinary shares, also known as equity shares. Sometimes it is also raised through the sale of preference ...