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Private Placement (private placement advantages (quicker and cheaper,…
Private Placement
private placement advantages
quicker and cheaper
greater certainty
friendly buyer
private placement disadvantages
dilute the interest of shareholders
dilution in share price and asset backing of shares
no sell of right for shareholders
Hybrid Security
Cumulative and Non-voting with fixed dividend rate
Debt like features
Dividend normally takes priority over ordinary share
Dividend rate usually set at issue
Equity like features
Residual claim paid before ordinary share
Classified as equity in balance sheet
dividends paid from after tax-income
right issue process disadvantage
expensive
risk