A Thesis Presented By M.Haseeb Zafar UOL Reg. No.

MAF 05093061 Presented To The Committee on Academic Degrees In Partial Fulfillment of the Requirements For a Degree of MS (Finance)

ANALYSIS OF DIFFERENT METHODS FOR RAISE EQUITY

EQUITY Equity is the claim or residual claim or inter in according and finance. POSITIVE EQUITY when liabilities not exceeds assets than positive equity exists.

NEGATIVE EQUITY When liabilities exceed assets, negative equity exist

EQUITY IN BUSINESS PROSPECTIVE:When the business is start then owners put some funding or invest capital into it for finance operations. As the business and owners both are considered separate legal of entity according to business entity concept; so this creates the liability on the business in shape of capital.

EQUITY RISINGS There are lot of issues that companies need to be considered when this about raising the equity capital. Raising the equity capital; The first question that can arise is what do I need the capital for it might be to enable you to the growth of your business etc.. OVER VIEW OF EQUITY CAPITAL RAISING Companies consider a large number of possible options when they are going to raise the capital there are so many different methods tools of capital through which the capital or equity can be raised . The choice of the company's capital raising needs will depend on several reasons.

Our research and conference predicted the extent of earnings management in the economic development of the initial public offering, the government led to the profit forecast in the rule of law Public Offering Manager choose for a earnings issuance will sign their aptitude to consequence within a intention area while manager I choose for a shall suspension will match the act to maintain their report, with the effect that both groups are the same in the significance of the learning management(Norashikin , Ismaile, Pauline Weetman 2008)
We created a simple theory of the cost of bargaining, the founder of the empirical analysis of trade-off incentive to accept an equal split simple. It consists of three main steps. First, we consider the equal split of the deciding factor. Idea generation, initial capital of the Constitution, it is more about team heterogeneity reduce the possibility of an equal division. Second, these same characteristics of the founder effect is also significant share of the preview. The third shows that equal division is associated with lower pre-money valuation of connection. It is estimated that about 10% of the equity value of the stock.

(Hellmann F. Thomas and Wasserman Noam 2011)

Private placement of equity is one of the easiest apparatus used by the company for raise funds or equity capital. Through the previous studies of equity issuance tells that the firms that select community equity offerings with come across the negative results. The studies performed by Mikkelson and Ruback (1985), Schleifer and Vishny (1986) Agrawal and Mandelker (1990) and Brous and Wini (1994) shows that the firm who got acquire money from public offerings got negative results. The main purpose of this study is to set up the factor which influence firm to issue equity privately. The aim of this research is to test the relationship of earning performance stock price run up, cost of agency and firm size theory with the choice to raise private placement equity. According to packing order they developed by standard C Myers and Nicolas Majluf in 1984, companies got most of resources of financing from internal financing to equity which based on the law of least attempt. It means that companies raise equity as means of last resort. So internal funds are the first choice and when they be unsuccessful to get from internal resource than debt is issued. This whole theory tells that the companies got or prefer to got or raise equity capital from internal resources. (Research Journal of Finance 2010)

Small business loans Small business loans are very popular and Government of different countries gave these soft loans in order to best up small business. There loan are available in favorable terms and conditions. There are two ways to attract the investors stoke some companies pay large dividend But other charges into the company's low stock pries rises often split up the shares, which will, not to raise the company's capital or equity, but it is very easy for the stock holders of the shares sold on the open market. Floating down one of two awards in the stock to attract investors reduced by half. Companies can also obtain loans from banks, raising shortterm funds or funds of other lenders. The company also retained earnings financing. Very straight concerning retained income. Some companies, especially electric, gas and other utility bills to pay their stock holders dividend of most of the projects.

Internal Finance Options include increase retain earnings selling not necessary assets and divesting part of the business companies, purchasing assets or business may be able to finance all or part of acquisitions by issuing equity to seller directly of the assets or business. These vender completions issue do not involve market based issuance.

External finance Directors funds and existing share holders.

 Debt

finance Bank Loans and issuing bonds are involved.

Equity

capital Options include the first and subsequent issues of shares, and shares the company has held advocacy correct the problem, open offer and placing of the different forms of general public sent IPOS. These options is to choose a different enterprises and companies to raise capital may depend on the reason, the amount of increase, the company's financial position.

Family and friend From friends and family than other friends and family selffinancing of capital provides an additional means to improve the new business capital, can increase the equity capital. These loans can be made quickly, because friends, family and colleagues know the entrepreneur personally enjoy the excitement of the new venture. Loans from friends and family money, new businesses can be agents of the owner.
Business angels If you want to raise business, angle investments could be a way opportunity angel investors who are already rich individuals desire. They plan an important role in the early stages of funding capital.

FINANCING
This is a type of fund, the ownership of this money is essentially anew business in the price of the exchange. This type of financing risk capital and angle investors. There is an optimal use of capital equity financing as a major advantage of the new business owners can return at a fixed time for friends to hear.

PERSONAL FUNDING:Individual sources of funds raising interests. Purchased using personal funds, you can easily improve the company's capital. Many people can be from personal checking and savings accounts and retirement account equity credit card real estate property for sale, entertainment, and even some rare collectibles from the collection of business risks, you can choose to use them to make personal, to enhance their new business capital funds.

Pre-emptive

A privilege extended to select shareholders of a corporation that will give them the right to purchase additional shares in the company before the general public has the opportunity in the event there is a seasoned offering. A preemptive right is written in the contract between the purchaser and the company, but does not function like a put option. Also known as "preemption rights".

Non pre-emptive Vise versa of pre-emptive rights

Debt financing:New business owners also raised equity through debt financing. This means debt financing of capital is a form of new business from banks, government agencies provide loans. New means of financing business owners the desert to raise funds, he / she will owe which bank lending institutions Secured and unsecured loans:These loans to these entrepreneurs, who need it, it's necessary to improve the new business capital. These loans as secured or unsecured debt, which is specially designed to meet the new requirements of business owner money.

Government funding:Government also plays a vital role in raising capital. Government game the loans to new business owners to start up the business and by giving loans the new business owners start their business a easily and their equity would also raised which is needed to the owner and fixed variable expenses:-There are two type of expenses fixed expenses and variable expenses. The new business owner must differentiate between two types of expenses. These two are start up expenses. The latter two types can predict the total cost of assessment .

UNDER WRITING EQUITY CAPITAL RAISING: Advice Administration, companies and distribution: Guaranteeing the proceeds of the share issue Under writer /book runners: Lawyers. Corporate brokers Legal Advisors Independent advisors:-

The procedure of equity raising: OPEN OFFERS

PLACINGS
How equity under writing services are purchased.

In a vividly speaking, it is concluded that equity plays an vital and precarious role in the development of the country and the business as well. Equity can be contemplating as the spine of the company, as the finance is lifeblood for the business, so the finance is raise by the equity. The owner raise equity from different resources. You can get finance from family, friends, capital ventures, investor angels, banks creditors, and other friends. If you want to get bigger your business you need money and this wanted money can be raised from the investors those who are decided to invest their money in your firm. Everyone wants to increase the finance of his company. The raising of capital equity sometimes expensive for the firm.