Capital Structure
I will discuss the stock and capital structure of Oracle Corporation used to grow the corporation worldwide and strengthen research and development efforts. Corporations raise capital by issuing common and preferred stock, by exchanging an ownership stake and sharing profits with investors. The corporation experienced significant growth since the inception growing to over a $30B in recent years. Publicly traded corporations have risk associated with the stock price in relation to the market and investors use the beta in the capital asset pricing model to understand the risk of corporations.
Stock Structure
Public corporations organize shares under the stock structure that consists of common shares, preferred stocks, and restricted stocks. Stocks have different voting privileges, affect earnings per share, financing options, dilution of ownership, valuation, and short-term interest. From a technical analysis perspective, the stock structure can affect the stock behavior, the rigidity of price movements, spreads, volumes, liquidity, and momentum. Additionally, the structure includes the number of authorized shares and types of shares that mandates ownership rights.
Oracle issued shares by offering a stake in ownership to raise capital, …show more content…
Companies use debt for tax advantages while keeping ownership in the company and the ease of access to capital in times of low-interest rates (Reinartz & Schmid, 2016). Equity is more expensive than issuing debt because the corporation shares the future earnings with the part owners. Debt payments are required regardless if earnings decline, corporations do not have to pay part owners if earnings decline. Oracle currently uses short and long-term debt and common stocks to finance the overall
I will discuss the stock and capital structure of Oracle Corporation used to grow the corporation worldwide and strengthen research and development efforts. Corporations raise capital by issuing common and preferred stock, by exchanging an ownership stake and sharing profits with investors. The corporation experienced significant growth since the inception growing to over a $30B in recent years. Publicly traded corporations have risk associated with the stock price in relation to the market and investors use the beta in the capital asset pricing model to understand the risk of corporations.
Stock Structure
Public corporations organize shares under the stock structure that consists of common shares, preferred stocks, and restricted stocks. Stocks have different voting privileges, affect earnings per share, financing options, dilution of ownership, valuation, and short-term interest. From a technical analysis perspective, the stock structure can affect the stock behavior, the rigidity of price movements, spreads, volumes, liquidity, and momentum. Additionally, the structure includes the number of authorized shares and types of shares that mandates ownership rights.
Oracle issued shares by offering a stake in ownership to raise capital, …show more content…
Companies use debt for tax advantages while keeping ownership in the company and the ease of access to capital in times of low-interest rates (Reinartz & Schmid, 2016). Equity is more expensive than issuing debt because the corporation shares the future earnings with the part owners. Debt payments are required regardless if earnings decline, corporations do not have to pay part owners if earnings decline. Oracle currently uses short and long-term debt and common stocks to finance the overall