韩山师范学院财务管理课件第十七章 Common and Preferred Stock Financing.ppt

Chapter 17 Common and PreferredStock Financing Review of Formulas PPT 17-5 Review of Formulas (continued) PPT 17-5 Chapter 17 - Outline LT 17-1 Common Stock The Voting Right Rights Offering “Rights-on” and “Ex-rights” Poison Pill Preferred Stock Provisions Associated with Preferred Stock Common Stock LT 17-2 Common stockholders own the corporation and have ultimate control over it They have a residual (leftover) claim to all corporate income that is not paid out to others Common stockholders have the right to vote on all major issues, including election of the board of directors The Voting Right LT 17-3 Proxy: –a right to vote given to someone else (an absent stockholder’s vote) Majority Voting: – all directors must be elected by at least 51% of the vote – doesn’t allow minority stockholders representation on the board of directors Cumulative Voting: – a stockholder’s votes can all be used to elect 1 person – allows minority stockholders representation on the board of directors Rights Offering LT 17-4 Rights Offering: – gives current stockholders the first option to purchase new shares (called a preemptive right provision) – allows existing stockholders the same amount of control they have initially – stockholder receives 1 right for each share of stock owned “Rights-on” and “Ex-rights” LT 17-5 “Rights-on” – if you buy the stock, you will also acquire a right toward a future purchase of the stock – occurs when a rights offering is initially announced “Ex-rights” – when you buy the stock you no longer get a right toward future purchase of the stock – occurs after a certain period of time Poison Pill LT 17-6 Poison Pill: – a rights offering made to existing shareholders of a company with the purpose of making it more difficult to be acquired by another company – used to avoid a takeover (anti-takeover weapon) – makes hostile takeovers very expensive and unattractive – used as a defensive