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general cash offer

An issue of securities offered for sale to the general public on a cash basis.

rights offer

A public issue of securities in which securities are first offered to existing shareholders. Also called a rights offering.

3A variety of different arrangements can be made for private equity issues. Selling unregistered securities avoids the costs of complying with the Securities Exchange Act of 1934. Regulation significantly restricts the resale of unregistered equity securities. For example, the purchaser may be required to hold the securities for at least one year. Many of the restrictions were significantly eased in 1990 for very large institutional investors, however. The private placement of bonds is discussed in a later section.

initial public offering

A company's first equity issue made available to the public. Also called an unseasoned new issue or an IPO.

Ross et al.: Fundamentals I VI. Cost of Capital and I 16. Raising Capital I I © The McGraw-Hill of Corporate Finance, Sixth Long-Term Financial Companies, 2002

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