Shareholder Activism & the Stock Market

Companies can raise capital in two ways: by issuing debt or selling equity. Debt is a straightforward borrowing arrangement that does not change the ownership structure of the firm. Investors loan funds to the company and are repaid at a given rate of interest. The investors have no claims to the company's management or assets so long as the debt is repaid according to schedule. Equity, most often thought of as stock, is a different matter. Investors who purchase equity are buying an ownership share in the firm. Stockholders are typically not involved in the day-to-day operations of the company, but have a vested interest in the company's performance. In the rare instance when a company is dissolved, the equity is distributed to owners. Far more commonly, however, shareholders trade their shares in the secondary markets. This research considers the stock market, the rise of investor activism, and the outlook for both.

When companies first issue stock, that is, when they ceas

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Approximate Word count = 715
Approximate Pages = 3 (250 words per page)

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