Volume of Financing with Different Equity Instruments

Exhibit 3.1 shows the annual amounts of common and preferred stock that firms issued

during the 1990s. As you can see, common stock dominates preferred stock by a wide

margin; more than 80 percent of equity financing is in common stock. In 2000, for

6

MIPS are sold almost exclusively to individual investors.

⁷Call options will be discussed in more detail in Chapters 7 and 8.

Grinblatt168Titman: Financial	I. Financial Markets and	3. Equity Financing	© The McGraw168Hill
Markets and Corporate	Financial Instruments		Companies, 2002
Strategy, Second Edition

72Part IFinancial Markets and Financial Instruments

EXHIBIT3.1Common Stock and Preferred Stock Issuances in the 1990s

Proceeds from	Proceeds from
Common Stock Issues	Preferred Stock Issues

Years

(mils)

# of Issues

(mils)

# of Issues

1990	19,153.3	402	4,696.4	88
1991	56,016.1	868	19,881.8	152
1992	72,517.8	1087	29,317.9	282
1993	102,394.0	1489	28,442.4	373
1994	61,436.8	1053	15,466.9	114
1995	81,977.5	1175	15,083.0	122
1996	115,455.9	1617	36,472.5	177
1997	120,162.3	1365	33,268.4	254
1998	114,960.1	971	37,760.3	229
1999	164,263.4	1028	27,483.2	173
2000	189,067.6	884	15,397.1	77

Source:Security Data Corporation.

example, U.S. corporations issued almost $200 billion in common stock and only about

$15 billion in preferred stock.