This Case is about Finance, International
Publication Date: 06/27/2016
In June 2015, yearly shareholders’ meeting contained a suggestion regarding Toyota’s new share issue are ’sed by the Toyota Motor Corporation. Named “Model AA†shares after the business’s first passenger car, the shares would offer new hybrid securities to investors. This proposition created lots of controversy among existing investors. Although President Toyoda asserted that these shares would not disadvantage any one, it remained uncertain how many investors had self-confidence in this self-confidence. The share issue, which would possibly constitute up to 5 per cent of Toyota’s complete outstanding shares, would need the support of a two thirds majority of investors. It was time to vote on the acceptance of Toyota’s new share issue, but the subsequent questions lingered in the investors’ thoughts: What precisely was the difference between ordinary shares and Model AA shares? Eventually, if the vote was approved should Model AA shares be priced?
Learning Objective: This case was created on the subject of raising capital via share problems that were advanced for a class in corporate finance. Named “Model AA,†this share dilemma exemplifies a hybrid securities problem—a combination of a five-year convertible bond issue and an ordinary share problem (with a “lock up†interval). The instance contains the pricing of AA shares.
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