Treasury Department Case Study

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One of the functions of treasury department is equity management. Purpose of equity management is to attract outsider become a members of company such as issue securities to public and satisfies all existing member’s requirements. Besides that, maintain cooperative profitability and while allowing for growth, all while follow to the cooperative principles are the hardest task of equity management. Source of company’s equity is come from much different ways; the most significant source is direct investment. Company issue securities and shares to public in order to obtain fund from outsides is the type of direct investment. Company’s board of direct may create a policy on an acceptable level for equity management in order to manage entity’s equity…show more content…
However, the registration process is very complicate because it consuming a lot of time and the cost to do registration process is also expensive. Therefore, equity management may try to circumvent it through variety of exemption to trade with investors without comply a registration statement and go through Securities and Exchange Commission review process. Two common exemptions are Regulation A and Regulation D. Regulation A applies to small securities insurance but Regulation D applies to accredited investor. Regulation A status that less than amount of $5 million per year in aggregate was exempted. Regulation A provides some benefits to the exemption such as no compulsory must pass any type of qualification test and no set any limitation of number of investor. Moreover, freely trade of any securities sold under Regulation A. Equity management choose go through variety of exemption because it help saving cost in company…show more content…
Form S-1 is initial registration form for new securities to public company. Company can save a lot of deal of work because Form S-1 provides information about how many number of company require item to incorporate. Form S-1 require company to provide information about entity’s equity, equity management will provide those information such as prospectus of the planned security itself, offering price methodology and etc. One of the information content of the Form S-1 is risk factor. This discuss about how risk affect organization and the securities being offered. For instance, appendix A show that AEON companies implement security price management in order to soundness and profitability of security. Furthermore, determine of offering price is also a content of Form S-1. Form S-1have explanation of the factor that considers in determining offering price, involves in common equity and convertible bonds. For example, appendix B shows that AEON company add cash dividend per share, conversion of convertible bonds, purchase of treasury stock and minus cumulative effects of change in accounting policies, therefore, it can obtain total amount of equity of the year. Form S-1 requires great internal effort because substantial data is significant for
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