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Corp. Finance #14 Financing – Common Stock & Preferred Stock

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Deal Score+1

Description

This course will cover corporate financing options using common stock and preferred stock.

We will include many example problems, both in the format of presentations and Excel worksheet problems. The Excel worksheet presentations will include a downloadable Excel workbook with at least two tabs, one with the answer, the second with a preformatted worksheet that can be completed in a step-by-step process along with the instructional videos.

When thinking about financing options for a corporation we can break them into the two main groups of debt financing and equity financing. This course will focus on equity financing. When considering equity financing, we can further break the financing options down into the two main categories of common stock and preferred stock, common stock being what we usually think of when considering equity financing.

Common stock represents company ownership. Preferred stock has features related to both debt and common stock. Preferred stockholders do not have the same voting rights as the common stockholders. However, preferred stock generally has a priority claim to dividend distributions and a priority clam upon liquidation of the company when compared to common stock.

We will also discuss the concepts of majority voting and cumulative voting. With regards to cumulative voting, we will consider calculations related to the number of shares required to be able to elect a certain number of board members and the calculation to determine the number of board members that can be elected given a set number of shares.

The concepts related to majority voting and cumulative voting may be applicable in other setting as well, including politics and not for profit organizations

What you’ll learn

  • Explain corporate financing options
  • Define and explain the concept of a poison pill as it relates to corporate finance
  • Define American Depository Receipts (ADRs) and how they are used
  • Describe majority voting and cumulative voting
  • Calculate the number of shares required to be able to elect a certain number of board members using cumulative voting
  • Calculate the number of board members that can be elected given a set number of shares using cumulative voting
  • Calculate stock rights value
  • Calculate preferred dividends in arrears

Requirements

Basic understanding of corporate finance concepts

Who this course is for:

  • Business students
  • Business professionals
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