Question: what is backdoor equity? What is the idea behind using it? 2. why acronyms are important to Wall Street? 3. Why is it that firms

what is backdoor equity? What is the idea behind using it?

2. why acronyms are important to Wall Street?

3. Why is it that firms don't issue public equity very often? What is meant by the pecking order?

4. Why does the market consider a convertible issue a weaker signal the equity issue?

5. What is the trade-off theory? Provide one example.

6. Why are convertibles more binding on management?

7. List a few approaches to minimize agency cost. Why is it needed?

8. How does an organization keep managers from becoming complacent? Provide examples.

9. Why do equity issues appear to cluster and do not occur evenly through time?

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1 Backdoor equity refers to raising capital through indirect or unconventional means such as issuing convertible securities or warrants rather than through traditional equity offerings The idea behind ... View full answer

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