Chapter 11 - Capital Structure Flashcards Preview

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Flashcards in Chapter 11 - Capital Structure Deck (5)
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1

Pari Passu

Latin for "on equal footing"

2

Carried Interest

Profit generated by funds under management for the General Partners ("Venture Capitalist")

3

Valuation of IPO
2 Ways

- Estimating the Present Value of future cash flows
- Estimating the value of comparable companies

4

Road Show

Underwriters and Senior Management market the offering to the largest clients (mutual funds, pension funds, etc)

5

4 IPO Puzzles

1.) Average IPO seems to be priced too low
2.) New issues appear cyclical
3.) The transaction costs of an IPO are high
4.) Long-Run performance after an IPO is poor on average