ACC1 week 11 JUP Fall 2010.pptVIP

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Stockholders Equity:paid in capital (ch 11) Accounting 1- JUP – Shanghai Week 9 Sources of Long Term Financing: Equity Terminology: Common stock at par value Paid in capital (paid in above par value) Retained earnings sum of not paid out earnings) Rights and privileges of common stockholders: Appoint the directors Pre-emptive right; first right to buy any new shares of the firm Types of common stock Class A (for instance with voting rights) Class B (for instance without voting rights held by government) etc. Stock market transactions IPO or new issues market The company goes public Primary market The company sells additional shares Secondary market The company’s Outstanding shares Going public Advantages Founder can sell some of his holdings and the company can seek finance in a wider circle Facilitates raising new corporate cash The value of the firm is transparent Disadvantages Burden of reporting and SEC rulings Disclosures to competition Self dealings of management Bull Market IPO ouch? Air China IPO Air China IPO makes solid HK debutBy Jian Er (China Daily)Updated: 2004-12-16 15:37 HONG KONG: Shares of Air China, the countrys largest carrier, closed 8.2 per cent higher after its first trading day in Hong Kong yesterday, a solid debut in line with market expectation. Its shares finished at HK$3.225 yesterday after hitting an intraday high of HK$3.25, compared with the offering price of HK$2.98. Air China has been regarded as a good buy, given that its price/earning ratio and return on investment is better than its peers, China Eastern Airlines and China Southern Airlines. SHK Research analyst Gary Zhang, who expected the stock to hit HK$3.60 in a 12-month period, said that Air Chinas growth would be well supported by Beijing airports strong passenger growth before the Olympic Games which will be held in 2008 in the capital city. Air China sold 2.805 billion shares, or 31 per cent of its enl