Chapter 15: Common Stock, Preferred Stock, and Financing Decisions

The following sections are included:

• Introduction

• Balance Sheet Accounts

• The Market for Common Stock

• Procedures for Issuing Common Stock

  • Rule 415 shelf registration

  • Preemptive right

  • Issuing stock with a preemptive right

• Corporate Control and Stock Repurchase

• Agency Theory

• Preferred Stock

  • Floating-rate preferred stock

• The Choice between Debt, Preferred Stock, and Equity

  • Identifying financing alternatives

  • Factors to consider about sources of financing

  • Ranking alternatives

  • Making the final decision

• Summary

• Appendix 15A — Inflation and the Value of Common Stock