Professional Documents
Culture Documents
Financing corporation
Good Morning
Bishnu & His Friends
Bishnu Dhamala
Amrit Thapa
Rabindra Neupane
11-1
Corporate Ownership
The major advantage of the corporate form of business
is the ease of raising capital as both large and small
investors can participate in corporate ownership.
Simple to
become an
owner
Easy to
transfer
ownership
Provides
limited
liability
Stock market began with the issue of shares by Biratnagar Jute Mills Ltd in
1937.
Security Marketing Centre (SMC) was established in April 1977 under
Industrial Policy, 1974 with the objective of facilitating the transaction of
government development bonds and corporate securities.
SMC started secondary trading of securities in November 1981 which
restricted to government bonds.
Security Exchange Act, 1983 was enacted in 1983.
The then SMC was converted into Securities Exchange Centre (SEC) in 1984.
SEC opened its floor for corporate share trading in November 1984.
The first amendment in Securities Exchange Act, 1983 in 1993 paved the way
for the restructuring of stock market in Nepal, which led to establish
Securities Board of Nepal (SEBON) in 1993 with a mandate to regulate and
develop the stock market.
The first amendment in the Act also led to convert the then SEC into NEPSE,
a full-fledged open-out-cry trading system with the induction of stock brokers
in January 13, 1994.
6
Corporate Ownership
Voting rights.
Dividends.
Stockholder
Benefits
Residual claims.
Preemptive rights.
11-7
Corporate Ownership
S to c k h o ld e r s
(O w n e r s o f v o tin g s h a r e s )
B o a r d o f D ir e c to r s
P r e s id e n t
V ic e P r e s id e n t
(P r o d u c tio n )
11-8
V ic e P r e s id e n t
(M a r k e tin g )
V ic e P r e s id e n t
(F in a n c e )
V ic e P r e s id e n t
(P e r s o n n e l)
11-9
Advantages of equity
Advantages of debt
Additional
Paid-in
Capital
Retained
Earnings
11-11
Stock Authorization
Par
Par value
value is
is an
an
arbitrary
arbitrary amount
amount
assigned
assigned to
to each
each
share
share of
of stock
stock when
when itit
is
is authorized.
authorized.
11-12
Stock Issuance
11-13
Subsequent issues
of new stock to the
public.
Dividends Dates
11-15
Stock Dividends
Small
Large
Record at current
market value
of stock.
Record at
par value
of stock.
11-18
11-19
Net Income
Average Stockholders Equity
Thank you
11-20