Académique Documents
Professionnel Documents
Culture Documents
Stock Markets
McGraw-Hill/Irwin
9-1
McGraw-Hill/Irwin
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Financial corp
9-3
Rest of world
Secondary Markets
trading of shares among investors
McGraw-Hill/Irwin
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9-5
corporation
Preferred stock
a hybrid security that has characteristics of both bonds and common stock
McGraw-Hill/Irwin
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Common
2007, The McGraw-Hill Companies, All Rights Reserved
9-7
Characteristics of Common Stock Dividends Residual Claim Limited Liability Voting Rights
McGraw-Hill/Irwin
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McGraw-Hill/Irwin
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Issuing Corporation
Funds
Investment Bank
Funds
Investors
Investment bank conducts primary market sale of stock using firm commitment underwriting (guarantees corporation a fixed price for newly issued securities) or best efforts underwriting (no guarantee to issuer and acts more as a placing or distribution agent)
(continued)
McGraw-Hill/Irwin
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Net proceeds Gross proceeds Underwriters spread Syndicate Originating house Red herring proxy
McGraw-Hill/Irwin
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McGraw-Hill/Irwin
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Order
Order
Order
Investor
Shares Cash
Broker
Shares Cash
Shares Cash
McGraw-Hill/Irwin
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transact at the best price available when the order reaches the post
Limit order
an order to transact at a specified price (the limit
price)
McGraw-Hill/Irwin
9-14
McGraw-Hill/Irwin
9-15
1994 $3,070.9 10.6 397.7 180.6 246.1 112.1 996.3 557.4 709.6 31.9 20.1
9-16
1997 $5,689.6 79.0 919.5 331.4 558.6 186.0 1,863.9 1,431.7 2,018.7 50.2 51.9
2004 $6,132.7 87.6 1,670.3 260.1 962.4 187.5 1,536.3 1,180.3 3,431.7 70.8 107.5
% of Total 39.2 0.6 10.7 1.7 6.2 1.2 9.8 7.5 22.0 0.4 0.7
9-17
McGraw-Hill/Irwin
9-18
9-19
54.97 21.71
McGraw-Hill/Irwin
9-20