Various Authors - Financing and Raising Capital

FINANCING

AND

RAISING CAPITAL

Copyright Bloomsbury Information Ltd, 2011

First published in 2011 by
Bloomsbury Information Ltd
36 Soho Square
London
W1D 3QY
United Kingdom

All rights reserved;
no part of this publication may be reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying, or otherwise, without the prior written permission of the publisher.

The information contained in this book is for general information purposes only. It does not constitute investment, financial, legal, or other advice, and should not be relied upon as such. No representation or warranty, express or implied, is made as to the accuracy or completeness of the contents. The publisher and the authors disclaim any warranty or liability for actions taken (or not taken) on the basis of information contained herein.

The views and opinions of the publisher may not necessarily coincide with some of the views and opinions expressed in this book, which are entirely those of the authors. No endorsement of them by the publisher should be inferred.

Every reasonable effort has been made to trace copyright holders of material reproduced in this book, but if any have been inadvertently overlooked then the publisher would be glad to hear from them.

pp. 41-44, Raising Capital in the United Kingdom copyright Lauren Mills

A CIP record for this book is available from the British Library.

epub ISBN: 978-1-47292-467-4

ePDF ISBN: 978-1-47292-468-1

Standard edition ISBN-13: 978-1-84930-019-3

Middle East edition ISBN-13: 978-1-84930-020-9

This book is produced using paper that is made from wood grown in managed, sustainable forests. It is natural, renewable and recyclable. The logging and manufacturing processes conform to the environmental regulations of the country of origin.

Project Director: Conrad Gardner
Project Manager: Ben Hickling
Assistant Project Manager: Sarah Latham

Reena Aggarwal is the Robert E. McDonough professor of business and professor of finance at Georgetown Universitys McDonough School of Business in Washington, DC. She specializes in international stock markets, demutualization of stock exchanges, initial public offerings, international investments by mutual funds, and international corporate governance and market valuation. She has been named among outstanding faculty in the Business Week Guide to the Best Business Schools. She is also a faculty associate of the Capital Markets Research Center. Dr Aggarwal is a frequent guest on local and international radio and television stations. Her research and comments have been cited in the Wall Street Journal, the Washington Post, Business Week, and the Financial Times, among other media outlets.

Seth Armitage is a professor of finance and director of the MSc in finance and investment at the University of Edinburgh Business School. His research is mainly in the area of corporate finance and includes projects on rights issues and open offers, the cost of capital, the role of banks in funding companies, and mutual financial institutions. He is author of The Cost of Capital: Intermediate Theory (Cambridge University Press, 2005). He was on the faculty of the University of Edinburgh from 1989 to 2002, and before rejoining in 2007 he was head of the Department of Accounting and Finance at Heriot-Watt University.

Lena Booth is associate professor of finance at the Thunderbird School of Global Management and served as the first executive director of the Thunderbird Private Equity Center (TPEC). Dr Booth has been a member of the Thunderbird faculty since 1995 and has taught and presented research in many countries around the world. Her research interests lie mainly in capital raising and security issuance by firms, with the primary focus on initial public offerings. She has received several teaching and research awards during her tenure at Thunderbird. Born and raised in Malaysia, Dr Booth holds a BBA from the National University of Singapore, an MBA from Northern Arizona University, and a PhD (finance) from Arizona State University.

Lawrence Brotzges business background includes 11 years with Ernst & Young, 10 years as corporate controller and CFO for two major divisions of Providian Corp (a Fortune 500 financial services company), and five years as a founder of a corporate venturing project, which resulted in Providian establishing an entirely new business. Since 1994, Brotzge has been an independent consultant and an angel investor. He has an ownership position in several small/start-up businesses and consults with a number of other companies.

Janusz Brzeszczynski is a senior lecturer in the Department of Accountancy, Economics and Finance at Heriot-Watt University, Edinburgh, and specializes in international finance, financial markets, and financial econometrics. Before joining Heriot-Watt, he held a Fulbright scholarship in the United States and worked as a visiting professor in the Department of Economics, Arizona State University. He was also a visiting scholar at the Swiss Institute of Banking and Finance, University of St Gallen, Switzerland, and assistant/associate professor at the Chair of Econometric Models and Forecasts, University of Lodz, Poland. Besides the Fulbright scholarship, he was also awarded an ESKAS post-doctoral scholarship at the Swiss Institute of Banking and Finance and a DAAD doctoral scholarship at Kiel University, Germany. Dr Brzeszczynski has published in a number of finance journals.

Augusto de la Torre is the chief economist for Latin America and the Caribbean at the World Bank. Since joining the Bank in 1997, he has held the positions of senior adviser in the Financial Systems Department and senior financial sector adviser for the Latin American and Caribbean regions. From 1993 to 1997 he was the head of the Central Bank of Ecuador, and in November 1996 Euromoney nominated him as the years Best Latin American Central Banker. From 1986 to 1992 he worked at the International Monetary Fund, where, among other positions, he was the IMFs resident representative in Venezuela (1991-1992). De la Torre has published on a broad range of macroeconomic and financial development topics. He is a member of the Carnegie Economic Reform Network.

Frank J. Fabozzi is professor in the practice of finance at Yale School of Management and specializes in investment management and structured finance. He is editor of the Journal of Portfolio Management and has authored and edited many acclaimed books, three of which were coauthored with the late Franco Modigliani and one coedited with Harry Markowitz. Professor Fabozzi is a consultant to several financial institutions, is on the board of directors of the BlackRock complex of closed-end funds, and is on the advisory council for the Department of Operations Research and Financial Engineering at Princeton University. He was inducted into the Fixed Income Analysts Society Hall of Fame in November 2002 and is the 2007 recipient of the C. Stewart Sheppard Award given by the CFA Institute.

Alain Fayolle is professor and director of the entrepreneurship research center at EM Lyon Business School, France. He is also visiting professor at Solvay Brussels School of Economics and Management, Belgium, and HEC Montral, Canada. His current research work focuses on the dynamics of entrepreneurial processes, the influence of cultural factors on organizations entrepreneurial orientation, and the evaluation of entrepreneurship education. Professor Fayolles most recent books are