Chapter 11 - Capital Structure Flashcards Preview

SOA/CFA > Chapter 11 - Capital Structure > Flashcards

Flashcards in Chapter 11 - Capital Structure Deck (5)
Loading flashcards...

Pari Passu

Latin for "on equal footing"


Carried Interest

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


Valuation of IPO
2 Ways

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


Road Show

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


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