FIL 240 Lecture20Outline of Last Lecture I. Definition of a bonda. Retirement of a bondb. Sinking fund provisionc. Serial Bondd. Straight bonde. Callable Bondf. Putable Bondg. Convertible Bondh. Variable-rate Bondi. Index Bondsj. STRIP bondsk. Yankee BondsII. Mortgage Bonds vs. Debenturea. Definition of mortgage bondsb. Definition of debenture bondsIII. Senior vs. Subordinate Bondsa. Definition of senior bondsb. Definition of subordinate bondsIV. Indenture Agreementa. Restrictive covenantOutline of Current Lecture Common StockI. Investmentsa. IPOb. Regulation D exemptionsc. Regulation A exemptionsII. 1933 Registration Statementa. FormsIII. Registration statementa. Prospectusb. Underwritersc. Sindicitd. Best Effortse. Self-underwritingThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.IV. Common stocka. RulesCurrent LectureCommon StockI. Investmentsa. IPO – Initial Public Offering – 1st offeringi. Public offering after IPO is a bad signii. Selling common stock is bad:1. Have to pay the broker (floatation cost)2. Finding other people to be owners – people buying stock so you can get more money3. Price decreases, when SUP increases; when stock is sold at ticker price, the actual price the company should be at increasesiii. Securities of 1933 – governs all public offerings, all laws about issuing stockiv. Securities of 1934 – exchanging and buying stock that is already issuedb. Regulation D Exemptions – without having to go through everythingi. 504 – free to exchange: freely tradableii. 506 & 505 (rich people) – generate restricted stock: not freely tradable (subject to rule 144)c. Regulation A Exemptions – restricted stockII. 1933: Registration Statement – here we are at beginninga. 1. Form S-1Form SB-1Form SB-2Small businessForm 10 Make restricted publicly tradable2. Form 10K annually (management, discussion, & analysis), 10Q quarterly, 8K (when something important happens)III. Registration Statementa. Prospectus – stuff in the middlei. Selling doc (black): read it and then buy; handout (red)ii. Tombstone : “we are selling this doc and come look at Prospectus”b. Underwriters – firm commitmentc. Sindicit: primary market; “I” – you or us; “t” – lead investment bankd. Best Efforts: sindicit will do the best to sell the share, “we will give it our best effort if you give us 10,000 shares of stock”e. Self-underwriting – sell it yourself (stock)IV. Common Stocka. Rules:i. 1 share = 1 vote for directorsii. Freely tradediii. Restrictediv. Class A – ava only to family of founder = increased voting
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