Public and Private Financing Assignment Paper

November 26, 2022

Public and Private Financing Assignment Paper

Order Number	636738393092
Type of Project	ESSAY
Writer Level	PHD VERIFIED
Format	APA
Academic Sources	10
Page Count	3-12 PAGES

Instructions/Descriptions

Public and Private Financing Assignment Paper

[Order Now]

Public, Private, Financing, Assignment, Paper

Public and Private Financing: Initial Offerings, Seasoned Offerings, and Investment Banks Mini Case

Randy’s, a family-owned restaurant chain operating in Alabama, has grown to the point that expansion throughout the entire Southeast is feasible. The proposed expansion would require the firm to raise about $18.3 million in new capital.

Because Randy’s currently has a debt ratio of 50% and because family members already have all their personal wealth invested in the company, the family would like to sell common stock to the public to raise the $18.3 million. However, the family wants to retain voting control. You have been asked to brief family members on the issues involved by answering the following questions.

a. What agencies regulate securities markets?

b. How are start-up firms usually financed?

c. Differentiate between a private placement and a public offering.

d. Why would a company consider going public? What are some advantages and disadvantages?

e. What are the steps of an initial public offering?

f. What criteria are important in choosing an investment bank?

g. Would companies going public use a negotiated deal or a competitive bid?

h. Would the sale be on an underwritten or best-efforts basis?

i. The estimated pre-IPO value of equity in the company is about $63 million

and there are 4 million shares of existing shares of stock held by family members. The investment bank will charge a 7% spread, which is the difference between the price the new investor pays and the proceeds to the company. To net $18.3 million, what is the value of stock that must be sold? What is the total post-IPO value of equity? What percentage of this equity will the new investors require? How many shares will the new investors require? What is the estimated offer price per share?

What is a roadshow? What is book-building?
Describe the typical first-day return of an IPO and the long-term returns to IPO investors.
What are the direct and indirect costs of an IPO?
What are equity carve-outs?
Describe some ways other than an IPO that companies can use to raise funds from the capital markets.
What are some other investment banking activities? How did these increase investment banks’ risk?
What is meant by “going private”? What are some advantages and disadvantages? What role do private equity funds play?
Under what conditions would a firm exercise a bond call provision?
Explain how firms manage the risk structure of their debt with project financing.

Chapter 18: Public and Private Financing: Initial Offerings, Seasoned Offerings, and Investment Banks Mini Case

Book Title: Financial Management: Theory and Practice

Professional Plagiarism Free Paper in APA/MLA/Harvard/Turabian Format, Instant Delivery, High Quality Submissions, 100% Unique, Turnitin Report Attached

Public and Private Financing Assignment Paper

RUBRIC

Excellent Quality

95-100%

Introduction

45-41 points

The context and relevance of the issue, as well as a clear description of the study aim, are presented. The history of searches is discussed.

Literature Support

91-84 points

The context and relevance of the issue, as well as a clear description of the study aim, are presented. The history of searches is discussed.

Methodology

58-53 points

With titles for each slide as well as bulleted sections to group relevant information as required, the content is well-organized. Excellent use of typeface, color, images, effects, and so on to improve readability and presenting content. The minimum length criterion of 10 slides/pages is reached.

Average Score

50-85%

40-38 points

More depth/information is required for the context and importance, otherwise the study detail will be unclear. There is no search history information supplied.

83-76 points

There is a review of important theoretical literature, however there is limited integration of research into problem-related ideas. The review is just partly focused and arranged. There is research that both supports and opposes. A summary of the material given is provided. The conclusion may or may not include a biblical integration.

52-49 points

The content is somewhat ordered, but there is no discernible organization. The use of typeface, color, graphics, effects, and so on may sometimes distract from the presenting substance. It is possible that the length criteria will not be reached.

Poor Quality

0-45%

37-1 points

The context and/or importance are lacking. There is no search history information supplied.

75-1 points

There has been an examination of relevant theoretical literature, but still no research concerning problem-related concepts has been synthesized. The review is just somewhat focused and organized. The provided overview of content does not include any supporting or opposing research. The conclusion has no scriptural references.

48-1 points

There is no logical or apparent organizational structure. There is no discernible logical sequence. The use of typeface, color, graphics, effects, and so on often detracts from the presenting substance. It is possible that the length criteria will not be reached.