Raising capital through DRPs
Article Abstract:
Publicly-listed companies can raise capital through dividend reinvestment programs (DRPs), under which shareholders recycle their dividends into additional shares of the company's stock. Companies must have enough traded shares so that a legitimate market price can be established, the company must be financially attractive in order to entice further interest by the shareholders, and the shares should have a market price at or near a premium to the shares' book value. DRPs have fixed costs, making them attractive only to companies raising a minimum of $500,000 a year in new capital. Companies considering a DRP must comply with SEC regulations and the blue sky laws of the various states. The process for creating a DRP entails authorizing an adequate number of shares for issuance, filing registration for the shares, and creating and maintaining a prospectus.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1990
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Credit unions: a force for today
Article Abstract:
Credit unions have become one of the most widespread financial organizations in the US. At present, there are about 13,000 federally insured credit unions with 214 million potential members. The immense popularity of credit unions as opposed to banks is attributed to better rates offered to shareholders and borrowers resulting from good loss experience and low operating expenses. Credit unions have a delinquency rate of only 1.4% compared to Federal Deposit Insurance Corp-insured commercial banks. Credit unions' proximity to their members' workplace also results in low marketing costs. The favorable loss experience enjoyed by credit unions is due to the special attention provided to their customers. Personalized service and personal credit judgements are given, as credit unions still base their practices on the belief that every loan is a character loan.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1993
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At risk!
Article Abstract:
Corporate treasurers have generally not concerned themselves with analyzing banks because of the guarantees of the Federal Deposit Insurance Corporation to cover all losses (FDIC). However, corporate treasurers need to be aware of the increasingly volatile banking environment and that bank risk exists. Treasurers need to begin to analyze the way their corporations are exposed to risk in the areas of: cash management and operations; securities clearance or settlement; and direct investment of funds. Treasurers should: take an inventory of all banks with which they do businesses: list maximum dollar exposure; create systems for keeping current on bank risk profiles; and develop a policy that incorporates risk evaluation into bank relationships.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1990
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