Chapter 11 - Capital Structure Flashcards Preview

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

Pari Passu

A

Latin for “on equal footing”

2
Q

Carried Interest

A

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

3
Q

Valuation of IPO

2 Ways

A
  • Estimating the Present Value of future cash flows

- Estimating the value of comparable companies

4
Q

Road Show

A

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

5
Q

4 IPO Puzzles

A
  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