Wk 5 Equity Finance Flashcards
1
Q
What are the internal sources of finance for a firm?
A
- Retained Profit
- Surplus current assets
- Underutilized fixed assets
2
Q
What are the external sources of finance for a firm?
A
With financial liability:
- Equity
- Debt
Without financial liability:
- Grants
3
Q
Equity Definition?
A
The ordinary shares within a company
4
Q
What is an Initial Public Offering (IPO)?
A
When a company gets its shares listed on an exchange and general public trade in these shares for the first time.
5
Q
Features of a Rights Issue?
A
- Only for existing shareholders
- They can buy it at lower than the market price
6
Q
Features of a Bonus Issue?
A
- Only for existing shareholders
- Shares given for free
- No additional capital for company
- More of a reward to existing shareholders
7
Q
How can equity be valued?
A
- Book Value
- Market Value
- DCF
8
Q
A
