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Corporate Finance Essay

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Below is an essay on "Corporate Finance" from Anti Essays, your source for research papers, essays, and term paper examples.

Supplementary Notes: Hybrid Securities
by Kyung Hwan Shim University of New South Wales Australian School of Business School of Banking & Finance for FINS 3625 S1 2011 May 24, 2011 ∗

These notes are preliminary and under development. They are made available for FINS 3625 S1 2011 students only and may not be distributed or used without the author’s written consent.



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Contents
1 Introduction 2 Preferred Stocks 2.1 2.2 Advantages of Issuing Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . Weak Points of Issuing Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . 3 5 6 7 7 8 10 10 11 11 11 13 16 16 17 18 20 20 21 22 28 32

3 Warrants 3.1 3.2 3.3 3.4 3.5 3.6 Warrant’s Payoff Structure and its Value . . . . . . . . . . . . . . . . . . . . . . . . Advantages of Issuing Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weak Points of Issuing Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dilution from the Exercise of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . Value of Warrants at Time of Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . Yield on Bonds with Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 Convertible Securities 4.1 4.2 4.3 4.4 Advantages of Issuing Convertible Securities . . . . . . . . . . . . . . . . . . . . . . Weak Points of Issuing Convertible Securities . . . . . . . . . . . . . . . . . . . . . Value of Convertible Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yield on Convertible Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 Agency Costs and Hybrid Securities 5.1 Hybrids and the Conflict of Interest between Stockholders and Bondholders . . . . 5.1.1 5.1.2 5.2 Debt and Equity Payoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equityholders’ Preference to Increase Risk . . . . . . . . . . . . . . . . . . .

Hybrids and the Asymmetric Information Problem . ....

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MLA Citation

"Corporate Finance". Anti Essays. 19 Nov. 2017

<http://www.antiessays.com/free-essays/Corporate-Finance-603423.html>

APA Citation

Corporate Finance. Anti Essays. Retrieved November 19, 2017, from the World Wide Web: http://www.antiessays.com/free-essays/Corporate-Finance-603423.html