Explain Why Private Placements of Securities Are an Attractive Way

question 76

Essay

Explain why private placements of securities are an attractive way of raising funds for some firms.

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Definitions:

Dividends Payable

Dividends payable are a liability on a company's balance sheet representing the amount of dividends that the company has declared but has not yet paid out to its shareholders.

Dividends Expense

The sum distributed from a portion of a company's earnings to its shareholders; often associated with preference shares.

Common Stock Dividend Distributable

Stockholders’ equity account that accumulates a stock dividend that has been declared but not yet issued and distributed.

Paid-in Capital

The amount of money that a company has received from shareholders in exchange for shares of stock.