Raising_Capital_Financing_Firms.ppsx

Raising Capital
and Financing
the Firm
Capital Markets and
Corporate Strategy

Raccolta di Capitale e Finanziamento
Aziendale
Grimblatt & Titmann
• Le firme possono raccogliere fondi da molte fonti con svariati strumenti
• La politica finanziaria di una firma determina la sua struttura di capitale e pertanto
il mix di strumenti finanziari usati per finanziare l’impresa
• In primo luogo, le ditte possono raccogliere capitale trattenendo gli utili generati
dalle loro operazioni  Capitale Interno che può risultare insufficiente per
soddisfare il fabbisogno di capitale
• Una volta determinato il Capitale Esterno necessario, la firma deve avere accesso ai
Mercati di Capitale: mercati di debito e mercati azionari,  Debt vs Equity
• I diritti dei creditori hanno priorità sui diritti degli azionisti  debt claims are
senior over equity claims
• Inoltre, I pagamenti verso i creditori sono fiscalmente deducibili da cui il noto
scudo fiscale degli interessi sul debito
matteo.marcantognini@gmail.com

An Overview of Corporate Financing
Brealey & Myers
• Much of the money for new investments comes from profits that companies retain
and reinvest
• The remainder comes from selling new debt or equity securities
• These financing patterns raise several interesting questions
• Do companies rely too heavily on internal financing rather than on new issues of
debt or equity?
• Are debt ratios of corporations dangerously high?
• How do patterns of financing differ across the major industrialized countries?
• Lenders and stockholders have different cash flow rights and different control
rights
• The lenders have first claim on cash flow, the stockholder receives whatever cash is
left over after the lenders are paid

Fonti di Capitale
Grimblatt & Titman

Patterns of Corporate Financing
Brealey & Myers
• Companies invest in long-term assets (mainly property, plant, and
equipment) and net working capital
• In most years there is a gap between the cash that companies need and the
cash that they generate internally
• To make up the deficit, companies must either sell new equity or borrow
• So, companies face two basic financing decisions:
• How much profit should be plowed back into the business rather than paid out as
dividends? and
• What proportion of the deficit should be financed by borrowing rather than by an issue
of equity?
• Capital Structure and Financing Policy varies so much from industry to
industry and from firm to firm

Capital Structure, Financing
Decisions and Debt-to-Total-
Capital Ratios
Brealey & Myers Citation: Source:
R. G. Rajan and L. Zingales, “What
Do We Know about Capital
Structure? Some Evidence from
International Data,”
Journal of Finance 50 (December 1995)

Fonti Pubbliche e Private di Capitale
Grimblatt & Titman
• Il capitale raccolto da fonti pubbliche dev’essere sotto forma di titoli registrati
• I titoli pubblici sono strumenti finanziari emessi sui mercati primari dalle Investment
Banks e scambiabili sui mercati secondari (NYSE, Piazza Affari, i cosiddetti exchanges, etc.),
e per ciò devono essere registrati presso le agenzie governative che regolano i mercati (SEC
/ CONSOB)
• Il Capitale Privato proviene dai prestiti bancari, dal Private Debt e dal Private Equity
Venture Capital  PEVC
• Gli strumenti finanziari che ne derivano se non registrati presso le agenzie che regolano il
mercato come la CONSOB, non possono essere negoziati nei mercati secondari, se registrati
dal Private Equity possono essere negoziati attraverso le MTF e le OTF
• Per I titoli pubblici l’insider trading (Abuso di Mercato) è illegale, ma per i titoli privati le
decisioni degli investitori in PEVC sono basate su informazioni private non conosciute dal
pubblico
• Infatti nel collocamento privato gli investitori sono molto sofisticati e ben qualificati

Il Contesto Legale in USA e nell’UE
SEC: EDGAR https://www.sec.gov/edgar/about
ESMA: https://www.esma.europa.eu/press-news/esma-news/esma-launches-data-strategy-next-five-
years
USA  SEC  EDGAR UE  ESMA  Strategia Dati
EDGAR , l' Electronic Data Gathering, Analysis,
and Retrieval è un sistema di database interno
che esegue automaticamente la raccolta, la
convalida, l'indicizzazione, l'accettazione e
l'inoltro di comunicazioni da parte di società e
altri soggetti che sono tenuti per legge a
presentare moduli presso la US Securities and
Exchange Commission (la "SEC").
La banca dati contiene una grande quantità di
informazioni sulla Commissione e
sull'industria dei valori mobiliari che è
liberamente accessibile al pubblico tramite
Internet.
L'Autorità europea degli strumenti finanziari e
dei mercati (ESMA), l'autorità di
regolamentazione e vigilanza sui mercati
finanziari dell'UE, ha pubblicato il 15/06/2023
la sua strategia in materia di dati per il
periodo 2023-2028.
Nei prossimi cinque anni, l'ESMA si adopererà
per facilitare l'uso di nuove tecnologie relative
ai dati, ridurre i costi di conformità delle
segnalazioni da parte delle entità
regolamentate, consentire l'uso efficace dei
dati sia a livello dell'UE che a livello nazionale;
e rendere i dati più ampiamente disponibili al
pubblico.

The mission
of the
European
Securities
Market
Authority
(ESMA)

Mercati di
Capitale per i
Titoli Societari
Van Horne & Wachowicz
Dalla figura possiamo notare la
posizione prominente detenuta
da certune istituzioni finanziarie
nel movimentare fondi dal
settore risparmio al settore
investimenti attraverso tre vie
principali: sottoscrizione
pubblica (i.e. offerta pubblica di
sottoscrizione IPO),
sottoscrizione privilegiata (i.e.
offerta di azioni privilegiate) e
Collocamento Privato
(sottoscrizione di azioni di nuova
emissione da parte di investitori
istituzionali, Private Equity e
Private Debt; prestiti bancari)

Alternative Issue Methods
Ross Westerfield & Jaffe

Investment Banks
Grimblatt & Titmann
• L'investment banking è un segmento
speciale delle operazioni bancarie
incaricato di raccogliere capitali per conto
delle aziende che desiderano emettere
titoli di capitale e/o debito per finanziare
la loro struttura di capitale e quindi le
attività e operazioni
• Il loro principale business corporativo
consiste nella loro competenza nel
sottoscrivere i titoli che poi negoziano
come market makers e dealers, traendo
profitto dal bid-ask spread
• Costituiscono l’infrastruttura chiave che
connette investitori e imprese attraverso
un processo articolato di progettazione,
distribuzione e collocamento tramite
consorzi delle emissioni dei titoli
mobiliari, nell’ambito delle offerte
pubbliche di sottoscrizione di titoli
obbligazionari o azionari (IPO e SEO)
Investment Banks
Ross-Westerfield-Jaffe
• Le banche di investimento sono il motore del
collocamento pubblico delle emissioni di
titoli sia emissioni iniziali (IPO) sia delle
nuove ulteriori emissioni (SEO)
• Oltre a fornire consulenza hanno la
responsabilità di formulare il metodo di
emissione dei nuovi titoli, stabilire un prezzo
equo dei titoli emessi e quindi venderli
• Il metodo di emissione può essere:
• COLLOCAMENTO PURO  BROKERAGE
• ASSUNZIONE A FERMO = FIRM COMMITMENT  si
sottoscrive l’intera emissione assumendo il
rischio di non venderla per intero
• ASSUNZIONE CON GARANZIA = BEST EFFORTS 
la banca d’investimento o il consorzio di banche si
impegnano a sottoscrivere la parte non venduta
dell’emissione

Investment banks have the responsibility of pricing
fairly

Investment Banking in Europa
Università Bocconi https://www.equitalab.eu/wp-
content/uploads/2022/02/Paper-Equita-Bocconi-2020-Investment-
Banking-in-Europe-Where-we-are-and-where-we-are-going.pdf
• Le banche d’investimento europee hanno meno vantaggi competitivi
rispetto a quelle americane
• La direttiva Mifid 2 ha imposto regole che hanno indebolito l’industria della
ricerca focalizzata a garantire mercati di capitale efficienti per le imprese
europee  bisognerebbe semplificare la Mifid 2 per far sì che investitori e
brokers abbiano minori costi che erodono I potenziali guadagni
• L’investment banking europeo è molto più concentrato sul PEVC, e occorre
incentivare I mercati pubblici per le Small Caps
• Converrebbe inoltre favorire gli investitori attivi su quelli passivi per
contribuire alla formazione dei prezzi e a sottoscrivere nuove emissioni di
titoli

Ricavi dell’Investment Banking
content/uploads/2022/02/Paper-Equita-Bocconi-2020-Investment-Banking-in-
Europe-Where-we-are-and-where-we-are-going.pdf

Performance delle azioni delle principali banche d’Investimento
content/uploads/2022/02/Paper-Equita-Bocconi-2020-Investment-Banking-in-
Europe-Where-we-are-and-where-we-are-going.pdf

Collocamento Privato = Private Placement, Private
Debt e Private Equity Venture Finance
Van Horne et al / Bankitalia
• Il private placement è uno strumento di finanziamento intermedio tra il prestito bancario e
l’offerta pubblica di obbligazioni
• Attraverso il private placement l’impresa che non può accedere al mercato pubblico, perché non
abbastanza grande o trasparente, si rivolge a uno o più investitori istituzionali di grandi
dimensioni (principalmente compagnie di assicurazione e fondi pensione) che dispongono sia
delle risorse finanziarie sia delle competenze per valutare e gestire il rischio
• Sebbene il mercato dei private placement non rappresenti una fonte di finanziamento
sostitutiva del credito bancario o dei mercati regolamentati, avendo per sua natura dimensioni
contenute, esso può aiutare le imprese a finanziare investimenti di lungo periodo e contribuire
allo sviluppo del mercato obbligazionario pubblico
• Invece di vendere nuovi titoli al pubblico o ai bondholders esistenti, le corporazioni possono
vendere un’intera emissione ad un singolo grande acquirente che investe direttamente
• L’azienda negozia direttamente risparmiandosi tutto il processo di sottoscrizione traendo il
vantaggio di una transazione rapida, a minori costi di emissione e con obblighi di trasparenza
meno stringenti

Collocamento Privato = Private Debt
Van Horne et al / Bankitalia
• I termini del finanziamento e dell’emissione sono fatti su misura dell’impresa e
l’ammontare del debito può essere suddiviso in tranches secondo le necessità
dell’organizzazione concedendole flessibilità delle scadenze e mitigando il rischio di
credito stabilendo covenants/clausole (arrangiamenti protettivi) sotto i quali
l’organizzazione può cambiare la sua struttura di capitale (aumentando il debito)
• Investitori istituzionali qualificati possono vendere i bond del collocamento privato ad altri
investitori istituzionali qualificati senza dover attendere la scadenza dei bond e senza
sottomettere l’emittente a eventuali regolazioni
• Negli Stati Uniti il private placement è, formalmente, un qualsiasi titolo di debito non
registrato presso la SEC perché non oggetto di un’offerta pubblica di collocamento
• In Europa, sebbene le normative nazionali siano in parte diversificate, il private placement
può essere definito, in analogia con il caso statunitense, come un qualsiasi strumento di
debito diverso dal prestito bancario che è esente dall’obbligo del prospetto informativo
imposto dalla direttiva comunitaria sui collocamenti pubblici
• Comunque, si può abbinare il collocamento privato insieme ad un contratto che obbliga
all’emittente a registrare i titoli presso la SEC o la CONSOB (ESMA)

Direct Placement Compared to Public Issues
Ross Westerfiewld & Jaffe
A private placement, which also involves the sale of a bond or loan directly to a limited number of
investors, is very similar to a term loan except that the maturity is longer.
Some important differences between direct long-term financing and public issues are:
1. A direct long-term loan avoids the cost of registration with the Securities and Exchange
Commission.
2. Direct placement is likely to have more restrictive covenants.
3. It is easier to renegotiate a term loan and a private placement in the event of a default. It
is harder to renegotiate a public issue because hundreds of holders are usually involved.
4. Life insurance companies and pension funds dominate the private-placement segment of
the bond market. Commercial banks are significant participants in the term-loan market.
5. The costs of distributing bonds are lower in the private market.
The interest rates on term loans and private placements are usually higher than those on
an equivalent public issue. Hayes, Joehnk, and Melicher found that the yield to maturity on
private placements was 0.46 percent higher than on similar public issues.21 This finding reflects
the trade-off between a higher interest rate and more flexible arrangements in the event of
financial distress, as well as the lower transaction costs associated with private placements.
21P. A. Hayes, M. D. Joehnk, and R.W. Melicher, “Determinants of Risk Premiums in the Public and
Private Bond Market,” Journal of Financial Research (Fall 1979).

Confronto tra Prestito Bancario, Private Placement
e Offerta Pubblica
https://www.bancaditalia.it/pubblicazioni/qef/2015-0262/QEF_262.pdf
Rispetto all’obbligazione pubblica, il
private placement è caratterizzato
generalmente da:
i) minori costi di emissione
ii) maggiore flessibilità nella
determinazione dei covenants del
contratto
iii) volumi inferiori di debito collocato
per singola emissione
iv) minore liquidità dei titoli
v) minori asimmetrie informative tra
investitori e imprese
Rispetto al prestito bancario, invece, il
private placement ha maggiori costi di
emissione ma permette finanziamenti di
maggiori dimensioni

The Private Equity Market
Ross-Westerfield-Jaffe
• For start-up firms or firms in financial trouble, the public equity market is often not
available
• The market for venture capital is part of the private equity market
• Private placements avoid the costly procedures associated with the registration
requirements that are part of public issues
• A large amount of private equity investment is undertaken by professional private
equity managers representing large institutional investors such as mutual funds
and pension funds
• There are at least four types of suppliers of venture capital:
1. A few old-line, wealthy families have traditionally provided start-up capital to promising
businesses
2. Several private partnerships and corporations have been formed to provide investment
funds
3. Large industrial or financial corporations have established venture-capital subsidiaries
4. Participants in an informal venture-capital market have recently been identified

The Market for Private Equity
Grimblatt &Titmann
• Along with the boom in the public equity markets during the 1990s, the role for
private equity increased in importance
• By private equity we mean equity that is not registered with the SEC and cannot be
traded in the public equity markets
• Individuals and families hold the largest portion of private equity with personal
investments in relatively small private businesses
• In addition, there are large institutions that provide private equity to companies
• These institutions can be classified as those specializing in venture capital, or
providing equity capital for emerging new companies, and those specializing in
restructuring, or providing equity capital for more mature firms that are making
fundamental changes in the way that they are doing business
• In both cases, the institutions can be viewed as specialists in transforming businesses
and providing the firms they invest in with managerial support and oversight as well
as capital.

Definizione di Private Equity e Venture Capital
Università Bocconi
La definizione del Private Equity (=PE) si basa su due aspetti, ognuno legato a
due caratteristiche principali del legame con il PE:
PE è una fonte di finanziamento per la società che riceve i fondi, alternativa
alle altre due fonti esterne come il prestito bancario e l’IPO
PE è un investimento che un’istituzione finanziaria (=Private Equty
Investor) sul capitale patrimoniale di una non-listed company
Venture Capital (=VC) è un caso molto specifico di PE in cui l’investimento si
fa negli stadi molto iniziale di vita dell’azienda
Business Angel (=BA) è un individuo molto abbiente e anche filantropico
che similmente al Venture Capital aiuta le start-up come incubatore,
acceleratore e svolgendo consulenza manageriale, di scouting, operativa,
logistica, etc.

Il Rapporto di PE
Università Bocconi
ASSETS DEBT
EQUITY PRIVATE
EQUITY
INVESTOR
VENTURE
BACKET
COMPANY
CASH  FINANZIAMENTO
SHARES  INVESTIMENTO

Le Conseguenze del Rapporto fra la V-BC e il PEI
Università Bocconi
• Una società che necessita liquidità per una ragione certa e definita
• La V-BC raccoglie denaro con l’emissione di azioni sul mercato privato e non deve
pagare interessi al PEI
• Le nuove azioni emesse saranno acquistate dal PEI
• L’investitore qualificato non diviene socio ma contribuisce al management
dell’impresa
• A minore dimensione dell’azienda, maggiore il contributo manageriale del PEI
• L’investitore professionale creerà profitto solo attraverso la generazione di
guadagni di capitale quando uscendo dall’investimento venderà le azioni ad un
altro investitore sul mercato
• L’aspetto più critico nel PE è lo stretto rapporto fra l’investitore e l’imprenditore

Paragone tra Public e Private Funding
Università Bocconi
FUNDING PRICING LIQUIDITA MONITORAGGIO
PUBBLICO Quotazione di
Mercato
Elevata Continuo
sull’Exchange
PRIVATO Risultato della
Negoziazione
Bassa Accordo Formale
Private placements avoid the costly procedures associated with the registration requirements
that are part of public issues. The Securities and Exchange Commission (SEC) restricts private
placement issues to no more than a couple of dozen knowledgeable investors including
institutions such as insurance companies and pension funds. The biggest drawback of privately
placed securities is that the securities cannot be easily resold. Most private placements involve
debt securities, but equity securities can also be privately placed. RWJ

I Benefits del PE per la V-BC
Università Bocconi
• CERTIFICATION BENEFIT = se il PEI investe sulla company è ovvia la
certificazione di qualità della V-BC
• NETWORK BENEFIT = Il PEI fa aumentare gli stakeholder della V-BC, +
fornitori + clienti + banche  la rete d’affari dell’impresa si accresce
• KNOWLEDGE BENEFIT = Soft (Management) and Hard (Conoscenza Specifica
del Business) Skills  PEI = advisoring + mentoring
• FINANCIAL BENEFIT = l’apporto di denaro a cambio di azioni incrementa il
Valore dell’impresa, conferendoli un migliore rating e merito che ha un
effetto positivo sul costo del capitale  ↑ EQUITY  ↑ RATING  ↓Costo
del Capitale

Stages of Financing R-W-J
A. V. Bruno and T. T. Tyebjee identify six
stages in venture-capital financing:
1. Seed-Money Stage  A small amount of
financing needed to prove a concept or
develop a product
2. Start-Up  Financing for firms that
started within the past year  Funds are
likely to pay for marketing and product
development expenditures
3. First-Round Financing  Additional
money to begin sales and manufacturing
after a firm has spent its start-up funds
4. Second-Round Financing  funding
working capital for a firm that is currently
selling its product but still losing money
5. Third-Round Financing  Financing for a
company that is at least breaking even
and is contemplating an expansion 
mezzanine financing
6. Fourth-Round Financing  Money
provided for firms that are likely to go
public within half a year  bridge
financing

Inizio:
Ricerca
Prodotto
Lancio Prodotto
Marketing
Fonti Interne di
Capitale
Serie A: PEVC
Creazione
Portafoglio
Prodotti
Espansione
Portafoglio
Clienti
Sviluppo
Crescita a LT
Fonti Esterne di
Capitale
Serie B: PEVC
Assunzione
Nuovi Talenti
Incremento
Vendite
Marketing
Sviluppo
Assistenza
Clienti
Fonti Esterne
Capitale
Titoli Privati
Serie C: PEVC
Nuovi Prodotti
Acquisizioni
altre Società
Espansione
Mercati / Team
Leadership Alto
Livello Aumento
Fatturato / Utile
Netto e Flusso
di Cassa
Fonti Esterne
Capitale
Titoli Privati
non negoziabili
negli exchange
Serie D verso
Uscita IPO:
Un'azienda in
questa fase di
finanziamento
dovrebbe avere
una base di
clienti
consolidata,
flussi di entrate,
un track record
di crescita e un
solido piano su
come utilizzerà
il nuovo
capitale esterno
attraverso titoli
pubblici e
negoziabili
Evoluzione Corporativa dal Collocamento
Privato al Collocamento Pubblico

Il Finanziamento delle Pmi e i Minibond
https://www.crowdfundme.it
• Il minibond è uno strumento di investimento obbligazionario di finanza innovativa
• I minibond sono obbligazioni o titoli di debito a medio-lungo termine emessi da
società italiane non quotate, tipicamente Pmi, normalmente destinate a piani di
sviluppo, a operazioni di investimento straordinarie o di refinancing
• Permettono cioè alle società non quotate in Borsa di aprirsi al mercato dei capitali,
trovando nuove fonti di finanziamento e riducendo la dipendenza dalle banche
• Come tutte le obbligazioni hanno un tasso d’interesse (generalmente fisso, ma è
possibile sia anche variabile) riconosciuto sotto forma di cedola periodica e una
data di scadenza
• I minibond possono essere:
• “amortising”: con graduale restituzione del capitale a scadenze predefinite
• “bullet”: con rimborso integrale alla scadenza dello strumento
• A differenza dell’equity crowdfunding, non è un investimento ad alto rischio e non
prevede di diventare socio della società

The Process of Raising Capital

Collocamento Pubblico  La Sottoscrizione di Titoli 
Offerta Pubblica Iniziale (IPO)  Mercato Primario
Grimblatt & Titmann
PROGETTAZIONE 
ORIGINATION:
Consulenza
Finanziaria
Specializzata alla
firma emittente, sul
tipo di titoli,
tempistiche e
prezzo e quantità
DISTRIBUZIONE 
DISTRIBUTION
Commissionata a
un Consorzio
formato dal [lead-
underwriter e
arranger] = capofila
Registrazione
Effettiva
dell’Emissione 
Prospetto
Raccolta Adesioni
Investitori
ASSUNZIONE
RISCHI  RISK
BEARING
ASSUNZIONE A
FERMO = il
consorzio
sottoscrive /
acquistare
l’emissione
ASSUNZIONE CON
GARANZIA = il
consorzio
sottoscrive /
acquista la parte
non collocata
CERTIFICCAZIONE
 CERTIFICATION
Il Consorzio di
Investment Banks
certifica la qualità
dell’emissione
garantendo un fair
price, il volume
annunciato
Prezzo  dei titoli
azionari
Prezzo, Cedole,
Scadenza, Clausole
di Opzione  dei
titoli obbligazionari
Compromesso e
Reputazione degli
Investment Banks

Intesa di Sottoscrizione e Prospetto dell’IPO
Grimblatt & Titmann
• L’accordo di sottoscrizione fra la firma emittente e la investment bank è il
documento che specifica cosa sarà venduto, l’ammontare dell’emissione e il
prezzo di vendita
• Inoltre, l’accordo specifica sia lo spread di sottoscrizione, che corrisponde
alla differenza fra i proventi lordi dell’offerta e i proventi netti che spettano
all’emittente, sia l’opzione di over-allotment (=greenshoe option) concessa
dalla società al Global coordinator (collocatore capofila) nel caso in cui il
prezzo di mercato superi quello di collocamento che induce un aumento
dell’offerta da parte del collocatore, mentre che nel caso di prezzo inferiore
il collocatore provocherà una riduzione di offerta; si tratta quindi di una
clausola per stabilizzare il prezzo
• Per di più, l’accordo mostra l’ammontare dei costi fissi come i listing fees, le
tasse da pagare, i costi legali e contabili e le spese per la pubblicazione e
diffusione del prospetto e altre compensi

I Costi delle Emissioni Pubbliche
Grimblatt & Titmann
If a firm is issuing
equity to the public
for the first time, it
is making an initial
public offering
(IPO). If a firm is
already publicly
traded and is
simply selling more
common stock, it is
making a seasoned
offering (SEO). Both
IPOs and seasoned
offerings can
include both
primary and
secondary issues

Total direct costs as a percentage of gross
proceeds
Brealey & Myers
The Costs of
Debt and Equity
Issues
Grimblatt &
Titmann
Issuing public debt
and equity can be a
lengthy and expensive
process. For large
corporations,
the issuance of public
debt is relatively
routine, and the costs
are relatively low.
However,
equity is much more
costly to issue for
large as well as small
firms, and it is
especially
costly for firms
issuing equity for the
first time

I Costi delle Emissioni Pubbliche
Spread or underwriting discount The spread is the difference between the price
the issue receives and the price offered to the
Public = compensation to the underwriter
Other direct expenses Costs incurred by the issuer(filing fees, legal fees, and
taxes) that are not part of the compensation to
underwriters
Indirect expenses Costs not reported in the prospectus
and include management time on the new issue
Abnormal returns In a SEO, the price drops by 3 percent to 4 percent upon
the announcement of the issue. The drop protects new
shareholders against the firm’s selling overpriced stock
to new shareholders
Underpricing For IPOs, the stock typically rises substantially after the
issue date. This is a cost to the firm because the stock is
sold for less than its efficient price in the aftermarket
Green Shoe option Gives the underwriters the right to buy additional shares
at the offer price to cover overallotments. This is a cost to
the firm because the underwriter will only buy additional
shares when the offer price is below the price in the
aftermarket

IPO in Italia  Offerta Pubblica di Sottoscrizione
https://www.consob.it/web/area-pubblica/prospetti1
DISCIPLINA EMITTENTI  Ammissione alla Quotazione in Borsa e alla Negoziazione
/ Appello al Pubblico Risparmio affidato a tre soggetti: emittente, proponente od
offerente e collocatore che provvede alla raccolta delle adesioni
Il Prospetto è il documento pubblicato dall’emittente/offerente con le modalità
previste dall’art. 9 del Regolamento Emittenti, ed è composto da tre documenti
distinti:
1. Documento di Registrazione, redatto ai sensi del TUF e dei Regolamenti UE,
depositato e approvato presso la Consob, quindi pubblicato e diffuso presso i
risparmiatori presso la sede legale dell’emittente e il suo sito web nella sezione
Investor Relations
2. Nota Informativa sugli strumenti (Titoli di Capitale) relativa all’ammissione alle
negoziazioni sull’Exchange (MOT, MTA, etc.)
3. Nota di Sintesi con tutte le info dell’approvazione, attività dell’azienda,
finanziarie, rischi, caratteristiche dei titoli)

Esempio Prospetto Approvato e Pubblicato

Debt Financing
Grimblatt & Titmann
• Corporate managers, whose firms finance their operations by issuing debt, and the investors
who buy corporate debt need to have a thorough understanding of debt instruments and the
institutional features of debt markets
• Debt instruments, also called fixed-income investments, are contracts containing a promise to
pay a future stream of cash to the investors who hold the contracts
• The debt contract can be negotiable, a feature specified in the contract that permits its sale to
another investor, or nonnegotiable, which prohibits sale to another party
• Generally, the promised cash flows of a debt instrument are periodic payments, but the
parties involved can negotiate almost any sort of cash flow arrangement
• Thus, a debt contract may specify the size and timing of interest payments and a schedule for
repayment of principal, the amount owed on the loan.
• In addition to promises of future cash, a debt contract also establishes:
• The financial requirements and restrictions that the borrower must meet
• The rights of the holder of the debt instrument if the borrower defaults, that is, violates any of the key
terms of the contract, particularly the promise to pay

Benchmark Rates
for Floating-Rate
Loans
Grimblatt & Titmann

Debt Financing
Grimblatt & Titmann
• The sheer variety of debt contracts generates a huge nomenclature and
classification system for debt
• To participate in the debt markets, either as a corporate issuer or as an
investor, it is important to be grounded in the culture of the debt markets
• … the four most common forms of debt contracts that corporations employ to
finance their operations: bank loans, leases, commercial paper, and bonds
(sometimes called notes)
• … then analyze the relationship between the price of a debt instrument and a
commonly used measure of its promised return, the yield
• This relationship between price and yield requires an understanding of a
number of concepts that are peculiar to debt: accrued interest, settlement
conventions, yield quotation conventions, and coupon payment conventions

Types of Bank Loans
Grimblatt & Titmann

Types of Leases
Grimblatt & Titmann

Commercial Paper
Grimblatt & Titmann
• The most commonly used short-term source of financing for corporations is commercial
paper which is a contract by which a borrower promises to pay a prespecified amount to
the lender of the commercial paper at some date in the future, usually one to six months
• This prespecified amount is generally paid off by issuing new commercial paper
• On rare occasions, the borrower will not choose this rollover, perhaps because short-term
interest rates are too high
• In this case, the company pays off the commercial paper debt with a line of credit
(announced in the commercial paper agreement) from a bank
• This bank backing, along with the high quality of the issuer and the short-term nature of
the instrument, makes commercial paper virtually risk free
• While large financial firms issue their own commercial paper directly, much of it to
money-market funds, nonfinancial firms issue their commercial paper through dealers

Elementi Distintivi dei Titoli di Debito
ABI Formazione
• Durata: Breve Termine  Titoli Mercato Monetario < 12 mesi / Medio-Lungo
Termine  Titoli Mercato Capitali > 12 mesi
• Periodicità Flussi di Cassa: Zero-Coupon  unico flusso uscita = prezzo
pagato e unico flusso entrata = rimborso / Coupon-Bond  successione di
flussi distribuiti lungo arco di vita del titolo
• Tipologia Interessi: Tasso Variabile / Inflation Linked / Tasso Fisso
• Natura Emittente: Obbligazioni Societarie = Corporate Bond / Obbligazioni
Governative = Treasury Notes, Municipal Bonds, BTP, Bot, Buoni Postali, etc.
/ Obbligazioni Sovranazionali
• Mercato Negoziazione/Quotazione: Regolamentato e OTC
• Valuta Denominazione e Nazionalità/Residenza Emittente: titoli domestici e
titoli esteri

Corporate
Bonds Features
Grimblatt & Titmann
Bonds are tradable fixed-
income securities, and
the most important
features that bond issuers
can set are covenants,
option features, cash flow
pattern (via coupon and
principal schedule),
maturity, price, and
rating. Much of the
nomenclature
used in referring to bonds
derives from these
features

Bonds an Their Features
• Bond = a long-term debt instrument with a final maturity generally being 10
years or more  maturity shorter than 10 years  note
• Par Value = the amount to be paid to the lender at the bond’s maturity 
face value or principal
• Coupon Rate = the stated rate of interest on a bond
• Maturity = he time when the company is obligated to pay the bondholder the
par value of the bond
• Trustee = person or institution designated by a bond issuer as the official
representative of the bondholders, typically, a bank
• Indenture = legal agreement, also called the deed of trust, between the
corporation issuing bonds and the bondholders, establishing the terms of
the bond issue and naming the trustee

Long-Term Debt
• The general procedures followed
for a public issue of bonds are the
same as those for stocks, the
offering must be approved by the
board of directors, and sometimes
a vote of stockholders is also
required
• Debt securities can be short-term
(maturities of one year or less) or
long-term (maturities of more than
one year)
• Short-term debt is sometimes
referred to as unfunded debt and
long-term debt as funded debt
• Long-term debt securities are
promises by the issuing firm to pay
interest and principal on the
unpaid balance
• The maturity of a long-term debt
instrument refers to the length of
time the debt remains outstanding
with some unpaid balance

The Public Issue of Bonds
• The registration statement for a public issue of bonds must include an indenture, a document not
relevant for the issue of common stock
• An indenture is a written agreement between the corporation (the borrower) and a trust company
• It is sometimes referred to as the deed of trust (like loan agreement or loan contract for the
privately placed debt and term loans)
• The trust company is appointed by the corporation to represent the bondholders
• The trust company must (1) be sure the terms of the indenture are obeyed, (2) manage the sinking
fund, and (3) represent bondholders if the company defaults on its payments
• The typical bond indenture can be a document of several hundred pages, and it generally includes
the following provisions:
• The basic terms of the bonds
• A description of property used as security
• Details of the protective covenants
• The sinking-fund arrangements
• The call provision

The Basic Terms
• Bonds usually have a face value also called the principal value or the
denomination and it is stated on the bond certificate
• In addition, the par value (i.e., initial accounting value) of a bond is almost
always the same as the face value
• Transactions between bond buyers and bond sellers determine the market
value of the bond
• Actual bond-market values depend on the general level of interest rates,
among other factors, and need not equal the face value
• The bond price is quoted as a percentage of the denomination
• Though interest is paid only twice a year, interest accrues continually over
the year, and the quoted prices of a bond usually include accrued interest

Security
• Debt securities are also classified according to the collateral protecting the
bondholder
• Collateral is a general term for the assets that are pledged as a security for payment
of debt
• For example, collateral trust bonds involve a pledge of common stock held by the
corporation
• Mortgage securities are secured by a mortgage on real estate or other long-term
assets of the borrower
• The legal document that describes that mortgage is called a mortgage trust
indenture or trust deed
• The value of a mortgage depends on the market value of the underlying property
• Some bonds represent unsecured obligations of the company
• A debenture is an unsecured bond, where no specific pledge of property is made

Security
Grimblatt & Titmann

Protective Covenants
• A protective covenant is that part of the indenture or loan agreement that limits
certain actions of the borrowing company
• Protective covenants can be classified into two types: negative and positive
• A negative covenant limits or prohibits actions that the company may take:
1. Limitations are placed on the amount of dividends a company may pay
2. The firm cannot pledge any of its assets to other lenders
3. The firm cannot merge with another firm
4. The firm may not sell or lease its major assets without approval by the lender
5. The firm cannot issue additional long-term debt
• A positive covenant specifies an action that the company agrees to take or a
condition the company must abide by:
1. The company agrees to maintain its working capital at a minimum level
2. The company must furnish periodic financial statements to the lender

Protective Covenants
Grimblatt & Titmann

The Sinking Fund
• Bonds can be entirely repaid at maturity, at which time the bondholder will
receive the stated value of the bond, or they can be repaid before maturity
• For public issues, the repayment takes place through the use of a sinking
fund and a call provision
• A sinking fund is an account managed by the bond trustee for the purpose of
repaying the bonds
• Typically, the company makes yearly payments to the trustee
• Sinking funds have two opposing effects on bondholders:
1. Sinking Funds Provide Extra Protection to Bondholders
2. Sinking Funds Give the Firm an Attractive Option if bond prices fall bellow the face
value

The Call Provision
• A call provision lets the company repurchase or call the entire bond issue at
a predetermined price over a specified period
• Generally, the call price is above the bond’s face value of $1,000
• The difference between the call price and the face value is the call premium
• Call provisions are not usually operative during the first few years of a
bond’s life
• For example, a company may be prohibited from calling its bonds for the
first 10 years
• This is referred to as a deferred call
• During this period the bond is said to be call-protected

Types of Bond Options
Grimblatt & Titman
• Virtually all bonds with sinking
fund provisions have the call
feature, so that the firm has the
ability to implement the
sinking fund in the event that it
is unable to find a sufficient
number of bonds to repurchase
on the open market
• The conversion price of a
convertible bond is its face
value divided by the number of
shares into which each bond
can be converted
• The conversion premium is the
percentage difference between
the conversion price and the
stock price
• Putable bonds became popular
after the merger and
acquisition boom in the mid-
1980s
• A popular type of putable bond,
known as a poison put bond, is
designed to protect
bondholders in the event of a
corporate takeover (leveraged
buyout, and leveraged
recapitalization)

Bond Types Based on
Coupon or Cash Flow
Pattern
Grimblatt & Titmann
• The stream of small, level
periodic cash flows are
typically semiannual
coupons until the bond’s
maturity date
• At maturity, the large
balloon payment of
straight-coupon bonds
reflects the payment of all
of the principal due in
addition to the semiannual
coupon
• The coupon is usually set
so that the bond initially
trades close to par value

Amortization of Straight-Coupon Bonds and Morgages Cash Flows of Various Bond Types
Grimblatt & Titmann

Bond Type Based on Market Price
Grimblatt & Titmann
• Premium Bond  quoted price that exceeds the face value of the bond
• Par Bond  quoted price that equals the face value of the bond
• Discount Bond  face value that exceeds the quoted price of the bond
• As time elapses, a straight-coupon bond that traded at par when it was
issued can become a discount bond or a premium bond
• This occurs if either riskless bonds of the same maturity experience price
changes, which implies a change in the level of interest rates, or if the credit
risk of the bond changes
• Bonds that are issued at a discount are known as original issue discount
(OID) bonds  this occurs when the coupon rate is set lower than the
coupon rate of par bonds of the same maturity and credit risk

Bond Ratings
Grimblatt & Titmann
• A bond rating is a quality
ranking of a specific debt
issue. There are three major
bond-rating agencies:
Moody’s, Standard & Poor’s
(S&P), and Fitch
• For a fee ranging from
thousands of dollars to
• tens of thousands of dollars,
each agency will rate the
credit quality of a debt issue
and follow that issue over its
lifetime with annual or more
frequent reviews
• Bond ratings can have an
important influence on the
promised rates of return of
corporate bonds, known as
bond yields

Defaults by Original Rating of All Rated Corporate
Bonds

Primary and Secondary Markets for Debt
Grimblatt & Titmann
• One of the biggest financial markets in the world is the bond market, but corporate bonds
are not the big draw
• Instead, U.S. government bonds and the government bonds of a few other key nations such
as Japan and EU countries are the major focus of bond trading activity
• The prices of U.S. Treasury securities are set initially in Treasury auctions
• The secondary market is not an organized exchange, it is described as over the counter
(OTC)
• Dealers make markets in Treasury securities by quoting bid-ask spreads and finance many
of their purchases with repurchase agreements = repos (= «Pronti contro Termine»), loans
that use Treasury securities as collateral
• In contrast to the initial pricing of Treasury securities, the initial prices of U.S. corporate
bonds, including notes, are typically set by the syndicate desk of the investment bank,
which issues the bonds to its largely institutional clients
• The secondary market for corporate debt is largely an over-the-counter market consisting
of many of the secondary market dealers in Treasuries

Bond Prices, Yields to Maturity, and Bond Market
Conventions
Grimblatt & Titmann
• There are two languages for talking about bonds: the language of prices and
the language of yields
• The yield to maturity is the discount rate that makes the discounted value of
the promised future bond payments equal to the market price of the bond
• Since the promised cash flows of a bond are fixed, and the price of the bond
is the discounted value of the promised cash flows using the yield to
maturity as a discount rate, increasing the yield to maturity decreases the
present value (or current market price) of the bond’s cash flows
• Hence, there is an inverse relationship between bond price and yield.
• The price-yield curve also has a particular type of curvature known as
convex curvature

Bond Price/Yield Relationship
Grimblatt & Titmann

Valuing Debt: How Well Does
Fisher’s Theory Explain Interest
Rates? Brealey & Myers
Fisher’s theory states that changes in
anticipated inflation produce corresponding
changes in the rate of interest. Since the early
1950s, there appears to have been a closer
relationship between interest rates and
inflation in the United States. Thus, for today’s
financial managers Fisher’s theory provides a
useful rule of thumb. If the expected inflation
rate changes, it is a good bet that there will be a
corresponding change in the interest rate.

Settlement Date and Accrued Interest
Grimblatt & Titmann
• The critical date is the date of legal exchange of cash for bonds, known as the settlement date
• An investor who purchases a bond does not begin to accrue interest or receive coupons until the
settlement date
• Accrued interest is the amount of interest owed on the bond when the bond is purchased between
coupon payment dates
• The sum of the bond’s quoted price (=flat price) and the accrued interest is the amount of cash
required to obtain the bond (=full price), and this sum is the appropriate price to use when
computing the bond’s yield to maturity
• The ex-coupon date (ex-date) is the date on which the bondholder becomes entitled to the coupon
• If the bondholder sells the bond the day before the ex-date, the coupon goes to the new bondholder
• If the bond is sold on or after the ex-date, the coupon goes to the old bondholder
• In contrast, stocks do not follow this convention when a dividend is paid
• Therefore, stock prices drop abruptly at the ex-date of a dividend, also called the ex-dividend date

Methods for Calculating Accrued Interest
Grimblatt & Titmann

Price of a Bond: Coupon Rate
Equals Yield to Maturity over Time
Grimblatt and Titmann
Straight coupon bonds that (1) have flat prices of
par (that is, $100 per $100 of face value)
and (2) settle on a coupon date, have yields to
maturity that equal their coupon yields
The yield to maturity is a compound interest rate
while the coupon yield is a simple quotient
It appears to be a remarkable coincidence that
these two should be the same when the bond
trades for $100 per $100 of face value, or par
When a bond is trading at par on a coupon date,
discounting at the coupon yield is the same as
discounting at the yield to maturity
However, coupon yields can give only approximate
yields to maturity when a bond is trading at a
premium or a discount

How
Much
Should
a
Firm
Borrow
Brealey
&
Myers
Does The Debt Policy
Matter
Brealey & Myers

Corporate Finance: Financing Decisions 
Financial Leverage
• Leverage  the use of fixed costs to increase (or lever up) profitability
• Operating leverage  the use of fixed operating costs by the firm (short run 
break-even analysis)
• Financial leverage  the use of fixed financing costs by the firm in the long run 
• Degree of financial leverage (DFL)  the percentage change in a firm’s earnings per share
(EPS) resulting from a 1% change in operating profit (EBIT)
• Cash insolvency  Inability to pay obligations as they fall due
• Financial risk  the added variability in earnings per share (EPS) – plus the risk of possible
insolvency – that is induced using financial leverage
• Total firm risk = business risk + financial risk.
• The coefficient of variation of earnings per share, CVEPS, is a measure of relative total firm
risk
• The coefficient of variation of earnings before interest and taxes, CVEBIT, is a measure of
relative business risk
• relative financial risk = CVEPS − CVEBIT

Capital Structure Determination
The traditional approach to capital structure
and valuation assumes that there is an
optimal capital structure, and that
management can increase the total value of
the firm through the judicious use of financial
leverage
This approach suggests that the firm can
initially lower its cost of capital and raise its
total value through increasing leverage
Modigliani and Miller (M&M) in their original
position advocate that the relationship
between financial leverage and the cost of
capital is explained by the net operating
income approach, and introduce the Total-
Value Principle: in the absence of taxes and
other market imperfections, the value of the
total pie does not change as it is divided into
debt, equity, and other securities
However, If there is a possibility of
bankruptcy, and if administrative and other
costs associated with bankruptcy are
significant, the levered firm may be less
attractive to investors than the unlevered one

The Capital Structure: Basic Concepts
the capital structure that maximizes the value of the firm
is the one that financial managers should choose for the
shareholders

Financial Leverage: EPS and
EBI
Ross Westerfield &Jaffe
The Cost of Equity, the Cost of Debt,
and the Weighted Average Cost of
Capital: MM Proposition II with No
Corporate Taxes
Ross Westerfield &Jaffe

Capital Structure: Limits to the Use of Debt
Ross Westerfield and Jaffe

The Optimal Amount of Debt and the
Value of the Firm
The Pie Model with
Real-World Factors

Equity Financing
Grimblatt & Titman
• Equity is the second major source of external capital
• Although debt and equity are alike in that both provide resources for investment in
capital equipment, research and development, and training that allow firms to
prosper, they differ in several important respects
• Debt holder claims must be paid in full before the claims of equity holders can be paid
• Equity holders elect the board of directors of the corporation and thus ultimately control the
firm
• Equity holders receive cash in the form of dividends, which are not tax deductible to the
corporation, while the interest payments of debt instruments are a tax-deductible expense
• Firms obtain equity capital either internally by earning money and retaining it
within the firm or externally by issuing new equity securities
• There are three different kinds of equity that a firm can issue: (1) common stock, (2)
preferred stock, and (3) warrants

Common Stock
Grimblatt & Titman
• Common stock is a share of ownership in a corporation that usually entitles its
holders to vote on the corporation’s affairs
• The common stockholders of a firm are generally viewed as the firm’s owners
• They are entitled to the firm’s profits after other contractual claims on the firm are
satisfied and have the ultimate control over how the firm is operated
• Some firms have two classes of common stock (dual-class shares), usually called class
A and class B, which differ in terms of their votes per share
• Dual-class common stock is largely confined to firms that are majority controlled by
some person or group
• These firms were family-owned firms until they grew too large to be financed by the
family alone
• Because the families did not want to give up control, they created two classes of
common stock, with one class having more votes per share than the other class

Preferred Stock
Grimblatt & Titman
• Preferred stock is a financial instrument that gives its holders a claim on a firm’s earnings
that must be paid before dividends on its common stock can be paid
• Preferred stock also is a senior claim in the event of reorganization or liquidation, which is
the sale of the assets of the company
• However, the claims of preferred stockholders are always junior to the claims of the firm’s
debt holders
• Preferred stock is used much less than common stock as a source of capital
• Preferred stock is like debt in that its dividend is fixed at the time of sale
• In some cases, preferred stock has a maturity date much like a bond
• In other cases, preferred stock is more like common stock in that it never matures
• Convertible preferred stock is like the convertible debt, and can be converted in common stock
• In Adjustable-Rate Preferred the dividend is adjusted quarterly (sometimes monthly) by an
amount determined by the change in some short-term interest rate

Warrants
Grimblatt & Titman
• There are several other equity-related securities that firms issue to finance
their operations
• Firms sometimes issue warrants, which are long-term call options on the
issuing firm’s stock.
• Call options give their holders the right to buy shares of the firm at a
prespecified price for a given period
• These options are often included as part of a unit offering, which includes two
or more securities offered as a package
• Firms might try to sell one common share and one warrant as a unit, and this
kind of unit offering serves as a form of staged financing in which investors
have an option to either invest more in the firm if it is successful or to shut it
down by refusing to invest at the option’s prespecified price

Common Stock and Preferred Stock Issuances in the 1990s
Grimblatt & Titman

Ownership of the Corporation
Brealey & Myers
A corporation is owned by its common stockholders
Some of this common stock is held directly by individual investors, but the greater
proportion belongs to financial institutions such as banks, pension funds, and insurance
companies
The common stockholders in widely held corporations still have the residual rights over
the cash flows and have the ultimate right of control over the company’s affairs
(Engagement and Voting)
https://www.federalreserve.gov/releases/z1/20230608/html/f223.htm

Holdings of Corporate Equities (as assets), 2000
Brealey & Myers

The Decision and the Benefits of Going Public
Grimblatt & Titman
• Without access to good capital markets, many entrepreneurs and venture capitalists would find it
difficult or impossible to cash out or diversify their holdings
• There are both demand-side and supply-side explanations for the cyclical nature of the IPO market
• On the demand side, there are periods when an especially large number of new firms, which are
unlikely to obtain private funding at attractive terms, have investment projects that need to be funded
• On the supply side, there might be periods when investors and institutions that traditionally invest in
IPOs have a lot of money to invest
• IPOs are observed frequently in some years and not in other years  the hot issue periods are
characterized by a large supply of available capital  firms are better off going public during a hot
issue period
• Advantages  Better access to capital markets / Shareholders gain liquidity / Original owners can
diversify / Monitoring and information are provided by external capital markets / Enhances the firm’s
credibility with customers, employees, and suppliers
• Disadvantages  Expensive / Costs of dealing with shareholders / Information revealed to
competitors / Public pressure

The Process of Going Public
Grimblatt & Titman
• The Registration Statement  The underwriters are legally responsible for
ensuring that the registration statement discloses all material information about
the firm
• Marketing the Issue  The underwriter is also responsible for forming the
underwriting syndicate, marketing the stock, and allocating shares among
syndicate members
• Pricing the Issue  Once the SEC approves the registration statement, the process
of going public can move into its final stage of pricing the issue, determining the
number of shares to be sold, and distributing the shares to investors
• Book Building vs. Fixed-Price Method  the way in which investment bankers'
price and market a new issue is called the book-building process / investors in
fixed-price offerings are generally allocated shares in oversubscribed offerings
using some fixed formula

IPO Underpricing of Common Equity
Grimblatt & Titman
• In setting an offering price, underwriters will weigh the costs and benefits of raising or lowering the
issue’s price  Pricing an issue too low adds to the cost of going public
• Therefore, to attract clients, underwriters try to price their issues as high as possible  This
tendency, however, is offset by the possibility that the issue may not sell if it is priced too high, leaving
the underwriter saddled with unsold shares
• Because the cost of having unsold shares is borne directly (firm commitment) or indirectly, as a loss of
reputation (best efforts), by the underwriter, it may have a substantial influence on the pricing choice
and even lead the underwriter to underprice the issue
• The Case Where the Managers of the Issuing Firm Have Better Information Than Investors 
Entrepreneurs who expect their firms to do well, and who have opportunities for further investment,
will have the greatest incentive to underprice their shares
• The Case Where Some Investors Have Better Information Than Other Investors  If new issues are
not underpriced, uninformed investors will, on average, systematically lose money
• The Case Where Investors Have Information That the Underwriter Does Not Have  Because their
information affects the price, investors have an incentive to distort their true opinions of an IPO

The SEO and the Value of the Firm
• It seems reasonable to believe that new long-term financing is arranged by firms
after positive net present value projects are put together
• As a consequence, when the announcement of external financing is made, the firm’s
market value should go up
• This is precisely the opposite of what happens in the case of new equity  The
market value of existing equity drops on the announcement of a new issue of
common stock
• Plausible reasons for this strange result include:
• Managerial Information  they might attempt to issue new shares of stock when the market
value exceeds the correct value  new investors will infer overvaluation from the new issue
• Debt Capacity  When the managers of a firm have special information that the probability of
financial distress has risen, the firm is more likely to raise capital through stock than through
debt
• Falling Earnings  When managers raise capital in amounts that are unexpectedly large and
if investors have a reasonable fix on the firm’s upcoming investments and dividend payouts,
the unanticipated financings are roughly equal to unanticipated shortfalls in earnings

Rights (Diritti di Opzione)
• When new shares of common stock are offered to the general public, the
proportionate ownership of existing shareholders is likely to be reduced
• However, if a preemptive right is contained in the firm’s articles of incorporation,
the firm must first offer any new issue of common stock to existing shareholders
• This assures each owner his or her proportionate owner’s share
• In a rights offering, the subscription price is the price that existing shareholders
are allowed to pay for a share of stock
• A rational shareholder will only subscribe to the rights offering if the subscription
price is below the market price of the stock on the offer’s expiration date
• It should be clear that the subscription price, the number of new shares, and the
number of rights needed to buy a new share of stock are interrelated
• Rights clearly have value  The difference between the old share price and the new
share price must be equal to the value of one right

Raising_Capital_Financing_Firms.ppsx

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