CHAP15Stabilization Policy

Chapter8Open ProblemsIn this chapter,we would like to give a list of open and unanswered problems in Mathematical Control Theory.The solutions of these open problems will be very important for the development of modern nonlinear control theory.Expectedly novel mathematical analysis and synthesis tools need to be developed to address these challenging problems.The interested reader should also consult the book[3]for other significant and important open problems in Mathematical Control Theory.Open Problem#1Under what conditions WIOS implies IOS?A qualitative characterization of the IOS property for abstract control systems as discussed in this book has not been available yet.For systems described by ODEs, many qualitative characterizations of the ISS and IOS properties are provided in [21–23].Moreover,Theorem4.1in Chap.4gives a complete qualitative character-ization of the WIOS property:“0-GAOS”+“RFC”+“the continuity with respect to initial conditions and external inputs”implies WIOSA similar qualitative characterization for the IOS property in a general context of abstract dynamical systems as discussed in this book will be very important for control designs and applications.Open Problem#2Development of small-gain techniques for dynamical systems described by Partial Differential Equations(PDEs).Small-gain results have been well studied forfinite-dimensional nonlinear sys-tems described by ordinary differential,or difference,equations(see,e.g.,[8–10] and references therein).However,as of today,there is little research devoted to the development of small-gain techniques for nonlinear systems described by Partial Differential Equations(PDEs).We believe that the small-gain results provided in the present book(Theorems5.1and5.2in Chap.5)will pave the road for the appli-cation of small-gain results to systems described by PDEs.I.Karafyllis,Z.-P.Jiang,Stability and Stabilization of Nonlinear Systems,381 Communications and Control Engineering,DOI10.1007/978-0-85729-513-2_8,©Springer-Verlag London Limited2011Open Problem#3Formulas for the Coron–Rosier methodology.Theorem6.1in Chap.6is an existence-type result.Although its proof is con-structive,it cannot be easily applied for feedback design purposes.The creation of formulas for the Coron–Rosier approach will be very significant for control pur-poses,since the Coron–Rosier approach can allow nonconvex control sets and does not require additional properties for the Control Lyapunov Function.The signifi-cance of the solution of this open problem is also noted in[5].Open Problem#4When is a nonlinear,time-varying,time-delay system stabiliz-able?We have recently provided a positive answer to the above question when the sys-tem only involves state-delay[13].A complete answer to the question of when the nonlinear time-varying system with both state and input delays is stabilizable re-mains open and requires deeper investigation.Nonetheless,it should be mentioned that sufficient,but not necessary,conditions for the solution of the stabilization prob-lem with input delays are proposed in the recent work of Krsti´c[14–16](also see [11]).To our knowledge,a necessary and sufficient condition for stabilizability is missing even for linear time-varying systems with input delays.Open Problem#5Application of small-gain results for distributed feedback design of large-scale nonlinear systems.Large-scale systems are abundant in variousfields of science and engineering and have gained increasing attention due to emerging engineering and biomedical applications.Examples of these applications are from smart grids with green and re-newable energy sources,modern transportation networks,and biological networks. There has been some success with the use of decentralized control strategy for both linear and nonlinear large-scale systems;see[7,19]and many references therein. Clearly more remains to be accomplished in this excitingfield.We feel that small-gain is a very appropriate tool for addressing some of these modern-day challenges. The small-gain results of the present book(Theorems5.1and5.2in Chap.5)make a preliminary step forward toward studying some complex large-scale systems be-yond the past literature of decentralized systems and control.Open Problem#6Extension of the discretization approach for autonomous sys-tems.The discretization approach for Lyapunov functionals was described in Chap.2 (Propositions2.4and2.5).However,as remarked in Chap.2,the discretization ap-proach requires good knowledge of some approximation of the solution map,and its use has been restricted to time-varying systems with special structure(see[1,17, 18]).An extension of the discretization approach for autonomous systems wouldbe an important contribution in stability theory because such a result would al-low the use of positive definite functions with non sign-definite derivative.The re-quired extension of the discretization approach must utilize appropriate differential inequalities in the same spirit as the classical Lyapunov’s approach(without requir-ing knowledge of the solution map or a system with special structure).The recent work in[12]is an attempt in this research direction(see also references therein). However,the problem is still completely“untouched.”Open Problem#7Application of feedback design methodologies to other mathe-matical problems.In this book,we have seen the applications of certain tools of modern nonlinear control theory to problems arising from mathematics and economics.Particularly, we have seen•applications of small-gain results to game theory(see Sect.5.5in Chap.5),•applications to numerical analysis(see Sect.7.3).We believe that feedback design methodologies can be applied with success to other areas of mathematical sciences.Fixed Point Theory(see[6])and Optimization Theory can be benefited by the application of certain tools of modern nonlinear con-trol theory.Corollary5.4in Chap.5already shows that small-gain results can have serious consequences in Fixed Point Theory.Further connections between Fixed Point Theory and Stability Theory are provided by the work of Burton(see[4]and references therein)but are in the opposite direction from what we propose,that is, the work of Burton applies results from Fixed Point Theory to Stability Theory.The efforts for the solution of problems in Game Theory,Numerical Analysis, Fixed Point Theory,and Optimization Theory will necessarily demand the creation of novel results in stability theory and feedback stabilization theory.Therefore,the application of modern nonlinear control theory to other areas of applied mathe-matics will result to a“knowledge feedback mechanism”between Mathematical Control Theory and other areas in mathematics!Open Problem#8Integral input-to-state stability(for short,iISS)in complex dy-namical systems.The external stability results of this book are exclusively targeted at extensions of Sontag’s ISS property and its variants to a very general context of complex dynamic systems.That is,we want to address a wide class of dynamical systems which may not satisfy the semigroup property,motivated by important examples of hybrid sys-tems,switched systems,and time-delay systems.It remains an open and important, but interesting,question to know how much we could do with the iISS property introduced in[2,20].References1.Aeyels,D.,Peuteman,J.:A new asymptotic stability criterion for nonlinear time-variant dif-ferential equations.IEEE Transactions on Automatic Control43(7),968–971(1998)2.Angeli,D.,Sontag,E.D.,Wang,Y.:A characterization of integral input-to-state stability.IEEETransactions on Automatic Control45(6),1082–1097(2000)3.Blondel,V.D.,Megretski,A.(eds.):Unsolved Problems in Mathematical Systems and ControlTheory.Princeton University Press,Princeton(2004)4.Burton,T.A.:Stability by Fixed Point Theory for Functional Differential Equations.Dover,Mineola(2006)5.Coron,J.-M.:Control and Nonlinearity.Mathematical Surveys and Monographs,vol.136.AMS,Providence(2007)6.Granas,A.,Dugundji,J.:Fixed Point Theory.Springer Monographs in Mathematics.Springer,New York(2003)7.Jiang,Z.P.:Decentralized control for large-scale nonlinear systems:A review of recent results.Dynamics of Continuous,Discrete and Impulsive Systems11,537–552(2004).Special Issue in honor of Prof.Siljak’s70th birthday8.Jiang,Z.P.:Control of interconnected nonlinear systems:a small-gain viewpoint.In:deQueiroz,M.,Malisoff,M.,Wolenski,P.(eds.)Optimal Control,Stabilization,and Nonsmooth Analysis.Lecture Notes in Control and Information Sciences,vol.301,pp.183–195.Springer, Heidelberg(2004)9.Jiang,Z.P.,Mareels,I.M.Y.:A small-gain control method for nonlinear cascaded systems withdynamic uncertainties.IEEE Transactions on Automatic Control42,292–308(1997)10.Jiang,Z.P.,Teel,A.,Praly,L.:Small-gain theorems for ISS systems and applications.Mathe-matics of Control,Signals,and Systems7,95–120(1994)11.Karafyllis,I.:Stabilization by means of approximate predictors for systems with delayed in-put.To appear in SIAM Journal on Control and Optimization12.Karafyllis,I.:Can we prove stability by using a positive definite function with non sign-definite derivative?Submitted to Nonlinear Analysis Theory,Methods and Applications 13.Karafyllis,I.,Jiang,Z.P.:Necessary and sufficient Lyapunov-like conditions for robustnonlinear stabilization.ESAIM:Control,Optimization and Calculus of Variations(2009).doi:10.1051/cocv/2009029,pp.1–42,August200914.Krsti´c,M.:Delay Compensation for Nonlinear,Adaptive,and PDE Systems.Systems&Con-trol:Foundations&Applications.Birkhäuser,Boston(2009)15.Krsti´c,M.:Input delay compensation for forward complete and feedforward nonlinear sys-tems.IEEE Transactions on Automatic Control55,287–303(2010)16.Krsti´c,M.:Lyapunov stability of linear predictor feedback for time-varying input delay.IEEETransactions on Automatic Control55,554–559(2010)17.Peuteman,J.,Aeyels,D.:Exponential stability of slowly time-varying nonlinear systems.Mathematics of Control,Signals and Systems15,42–70(2002)18.Peuteman,J.,Aeyels,D.:Exponential stability of nonlinear time-varying differential equationsand partial averaging.Mathematics of Control,Signals and Systems15,202–228(2002)19.Siljak,D.:Decentralized Control of Complex Systems.Academic Press,New York(1991)20.Sontag,E.D.:Comments on integral variants of ISS.Systems Control Letters3(1–2),93–100(1998)21.Sontag,E.D.,Wang,Y.:On characterizations of the input-to-state stability property.Systemsand Control Letters24,351–359(1995)22.Sontag,E.D.,Wang,Y.:New characterizations of the input-to-state stability.IEEE Transac-tions on Automatic Control41,1283–1294(1996)23.Sontag,E.D.,Wang,Y.:Lyapunov characterizations of input to output stability.SIAM Journalon Control and Optimization39,226–249(2001)。

Self-Stabilization: Fault Tolerance in Distributed SystemsPradip K SrimaniDepartment of Computer ScienceClemson University, USAsrimani@Part A: Distributed Systems, Self Stabilization, Basic Part B: Leader ElectionPart C: Spanning Tree, fair and unfair daemonPart D: Strong Match in a GraphPart E: Simple s-Part F: Limitations and Future WorkIn mobile networks, nodes move around Self-stabilizing protocols can handle theseTraditionally, a node knows its own state and that of An underlying localization service provides the nodes Distance 2 information can be obtained byTransient faults occur (memory corruption) Manual intervention has a high cost in a Self-stabilization does not requireSelf-stabilization provides an uniform approach towards fault tolerance.If each node has a unique hardwired id, the network For some problems, there are no deterministicId-based networks are more realistic (Ethernet and IPThis criterion has nothing to do with the underlying Randomization is used normally to break symmetry Random number generators are actually pseudoThePrecise specification of legitimate state Each node repeatedly executes a sequence ofRobust (traditionally fault tolerant) algorithms follow Stabilizing algorithms areNo need to assume a maximum number of faultsLeader Election in a Network GraphWe use a ring and a tree of processors as examplesWe use anonymous c-daemonAny system state, where an arbitrary node can be elected leader as identified by someRest of the nodes in the tree must be aware of the identification of the leader node. Consider applications like warehouse location, center location in a multicast tree in a mobileIf nodes have IDs, leader election is trivial.We show two protocols –We useEach node has a label variable in the domain Initially, the nodes have arbitrary label values;If a and b are any two labels, define a gapbaxFor example, if a = 2, b = 5 and c = 1, n = 8, then x = 5, y = 4.Only one leader exists:The leader node has the maximum x-value in the network and it points to itself.Any other node:is the distance between nodes i and j in the tree. Any non leader node j has anRule 1Node jNode jX=5Example Example (Cont.) Example (Cont.)Example (Cont.)Prove by contradiction IWDC 2006, IIT Kharagpore, December 27, 2005Prove by contradictionProve by contradiction29IWDC 2006, IIT Kharagpore, December 27, 2005Convergence and Complexity 30IWDC 2006, IIT Kharagpore, December 27, 2005Convergence and Complexity Let Am be the # of times all nodes in S m execute R1ÎA 0 = 0ÎA m ≤A m-1 + |S m |ÎΣA m ≤n + n 2/2Time Complexityis O(n 4)ÎAt most n(n+1)/2executions of R2 and R3, if no R1 is executedWe presented an anonymous self-stabilizing algorithm for leader election in a tree using centralThe time complexity of the protocol is O(nAny node in the tree can be elected as leader, including both leaf and non-leafStarting from a initial state, it is possible to electWe design a protocol that works in linear roundsWe show a technique to convert any fair daemon Sequential algorithms are well known.We need to maintain the spanning tree information inWe need to have a designated root node r (thus, it is a semi-uniformEach node knows the states of its neighbors onlyWe are interested in any spanning tree rooted at theAn ExampleThe graph has six nodes, {r, a, b, c, d, e}, The predecessor pointer at each node is shown The set PV denotes the set of the privileged Note: In any state, more than one node may beExample (contd.)In any illegitimate state there is at least one The system is in a legitimate state iffDefine a round to be an interval when all privileged At the end of the first round, the root node hasAt the end of the second round, all nodes adjacent toConsider any self-stabilizing algorithm Define, for any nodeFor each nodeLook at the new protocolWe assume a serial model where no two nodes A central daemon selects, among all privileged Each node has a unique ID; we useIn an undirected graphIfA matchingEach node i maintains only a pointer P(i); theA node is calledIfFor any node i, we define aMinimum neighbor of node i that is availableConsistent value∝∝∝In a legitimate state (no node is privileged, i.e., The matchingStarting from an arbitrary initial state theIt can be relatively easily shown that there is aIt is not possible from within the system to observe that a legitimate configuration has been reached; theSome self-stabilizing algorithms appear to be simple since they are not optimized with respect to timeOne transient fault at one node may trigger a long sequence of corrective actions spanning the entireThe model allows data to be corrupted, but not The model deals with only catastrophic faults The system service is not available during the Formal verification is complex compared toConnected dominating set Clusters and Cluster Heads SPST vs RandomizationCaching at nodesFault containmentWe normally use node ids to break symmetry in order It is possible to use randomization and an additional。

I N S T A L L A T I O N I N S T R U C T I O N SThis device complies with part 15 of the FCC rules. Operation is subject to the following 2 conditions: (1) This device may not cause harmful interference, and (2) this device must accept any interference received, including interference that may cause undesired operation.This equipment has been tested and found to comply with the limits of a Class B digital device, pursuant to Part 15 of the FCC rules. These limits are designed to provide reasonable protection against harmful interference in a residential installation. This equipment generates, uses and can radiate radio frequency energy, and if not installed and used in accordance with the instructions, may cause harmful interference to radio or televisioncommunications. However, there is no guarantee that the interference will not occur in a particular installation. If this equipment does cause harmful interference to radio or television reception, which can be determined by turning the equipment off and on, the user is encouraged to try to correct the interference by one of the following measures:•Reorient or relocate the receiving antenna •Increase the separation between the equipment and receiver •Connect the equipment to an outlet on a circuit other than that to which the receiver is connected Consult the dealer or an experienced radio/TV technician for helpSL151SMART-LIFT™ Electric Ceiling LiftSL151Installation Instructions2DISCLAIMERMilestone AV Technologies, and its affiliated corporations and subsidiaries (collectively, "Milestone"), intend to make thismanual accurate and complete. However, Milestone makes no claim that the information contained herein covers all details,conditions or variations, nor does it provide for every possible contingency in connection with the installation or use of this product. The information contained in this document is subject to change without notice or obligation of any kind. Milestone makes no representation of warranty, expressed or implied,regarding the information contained herein. Milestone assumes no responsibility for accuracy, completeness or sufficiency of the information contained in this document.Chief® is a registered trademark of Milestone AV Technologies.All rights reserved.IMPORTANT SAFETY INSTRUCTIONSWARNING alerts you to the possibility ofserious injury or death if you do not follow the instructions.CAUTIONalerts you to the possibility ofdamage or destruction of equipment if you do not follow thecorresponding instructions.WARNING :FAILURE TO READ ANDFOLLOW THE FOLLOWING INSTRUCTIONS CAN RESULT IN SERIOUS PERSONAL INJURY , DAMAGE TO EQUIPMENTOR VOIDING OF FACTORY WARRANTY . It is the installer’sresponsibility to make sure all components are properly assembled and installed using the instructions provided.IMPORTANT ! :Model SL151 is suitable for use in OtherEnvironmental Air Space in Accordance with Section 300.22(C)of the National Electrical Code.When using an electrical mounting system, basic precautionsshould always be followed, including the following:READ ALL INSTRUCTIONS BEFORE USING THISPRODUCTDANGER:TO REDUCE THE RISK OFELECTRIC SHOCK:1.Always turn off power at source before cleaning.WARNING:TO REDUCE THE RISK OFBURNS, FIRE, ELECTRIC SHOCK, OR INJURY TO PERSONS:•Always turn off power at source before putting on or taking off parts.•Use this mounting system only for its intended use as described in these instructions. Do NOT useattachments not recommended by the manufacturer.•Never operate this mounting system if it has a damaged test cord or test plug. If it is not working properly during testing, return the mounting system to a service center for examination and repair.•Keep the test power cord away from heated surfaces.•Never operate the mounting system with the airopenings blocked. Keep the air openings free of lint,hair, and the like.•Never drop or insert any object into any opening.•Do not use outdoors unless marked for outdoor use.•Route cords and cables as shown in the installation instructions.•To disconnect, turn all controls to the off position, then turn off power at source.WARNING :RISK OF ELECTRIC SHOCK!Connect this mounting system to a properly grounded outlet only. See Grounding Instructions.CAUTION:Changes or modifications to thisunit not expressly approved by the manufacturer can void the units FCC compliance rating and make the unit illegal to operate.WARNING :Failure to provide adequatestructural strength for this component can result in serious personal injury or damage to equipment! It is the installer’s responsibility to make sure the structure to which thiscomponent is attached can support five times the combined weight of all equipment. Reinforce the structure as required before installing the component.WARNING :Exceeding the weight capacitycan result in serious personal injury or damage to equipment! It is the installer’s responsibility to make sure the weight of all components attached to the SL151 does not exceed 35 lbs (15.9 kg).WARNING :RISK OF INJURY! Do not placevideo equipment such as televisions or computer monitors on the ceiling panel of the SL151.NOTE:This system has no user serviceable parts.--SAVE THESE INSTRUCTIONS--Installation Instructions SL1513TOOLS REQUIRED FOR INSTALLATIONPARTSLEGENDTighten FastenerApretar elemento de fijación Befestigungsteil festziehen Apertar fixador Serrare il fissaggio Bevestiging vastdraaien Serrez les fixations Loosen FastenerAflojar elemento de fijación Befestigungsteil lösen Desapertar fixador Allentare il fissaggio Bevestiging losdraaien Desserrez les fixationsPhillips Screwdriver Marcar con lápiz Stiftmarkierung Marcar com lápis Segno a matita Potloodmerkteken Marquage au crayon Adjust Ajustar Einstellen Ajustar Regolare Afstellen AjusterSL151Installation Instructions4DIMENSIONSTABLE OF CONTENTSDisclaimer.....................................................2Tools Required For Installation.................... 3Parts..............................................................3Legend..........................................................3Dimensions...................................................4Installation Requirements..............................5Power Requirements.....................................5Pre-test Lift Before Installation.......................5Power Requirements And Wiring...................5Grounding Instructions.................................. 6Removing Ceiling Panel................................ 6Installing in Ceiling.........................................6-Installing In A Suspended Ceiling...............6-Installing In A Wood Framework (Joists)....7Installing Projector On SL151 (7)Adjustments...................................................7Connecting Control Wiring.............................8Connecting To Power Supply.........................8Wiring Options............................................... 9Re-Attaching Ceiling Panel............................9Table 1: Wiring Table...................................10Table 2: Internal Terminal Descriptions........11Internal/External Wiring TerminalDescriptions (12)Installation Instructions SL1515Figure 25.Place the jumper wire (H) on the external wiring terminal contacts labeled 2and 5, and wire the push button assembly (D) to contacts 1 (red) and 6 (black). (See Figure 3).Figure 36.Plug in the SL151 test cord. (See Figure 2)NOTE:(See Figure 2) for location of external wiring terminal.(See Figure 4) for location of internal wiring terminal.Figure 4Power Requirements and WiringThe SL151 requires 120VAC, 60 Hz and 12 amps power to operate.IMPORTANT ! :This product must be grounded. If it shouldmalfunction or break down, grounding provides a path of least resistance for electric current to reduce the risk of electric shock.Grounding InstructionsThis product is equipped with a test cord having an equipment-grounding conductor and a grounding plug. The plug must be plugged into an appropriate outlet that is properly installed and grounded in accordance with all local codes and ordinances.Wire push button assembly (D) (1-red,6-black)[Some parts not shown for clarity]Internalwiring terminalSL151Installation Instructions6WARNING:RISK OF ELECTROCUTION! All electricalwiring required for installation should be installed by aqualified electrician.WARNING:PINCH HAZARD! FINGERS OR HANDSBETWEEN MOVING PARTS CAN LEAD TO SEVERE PERSONAL INJURY! Keep fingers and hands away from mount when operating.7.Press the push button to test the SL151 while it is still in the pre-test position.•Press when the lift is at its extended position and it willretract.•Press when the lift is at its retracted position and it willextend.•Press while the lift is moving and it will stop.•Leave SL151 in the open position.Removing Ceiling Panel1.Remove and save screws attaching guide wires to ceiling panel. (See Figure 5)Figure 52.Lift up on each corner of ceiling panel to remove pan from clips. (See Figure 6) and (See Figure 7)Figure 6Figure 7INSTALLING IN CEILINGWARNING:IMPROPER INSTALLATION CAN LEAD TOLIFT FALLING CAUSING SEVERE PERSONAL INJURY ORDAMAGE TO EQUIPMENT! It is the installers responsibility to make certain the structure to which the lift is beingmounted is capable of supporting five times the weight of the lift and all attached equipment. Reinforce the structure as required before installing the lift.NOTE:The following instructions assume a suitable mountingstructure and surface exists prior to installation and all power and signal wires and cables have been properly installed.Installing in a Suspended CeilingNOTE:The SL151 may be suspended from three 3/8 in.diameter x 8 in. length (minimum) Grade 2 or better threaded rods (not provided) which are secured to a 1-5/8" x 1-5/8" 12ga metal framing channel (spanning a maximum of 5 feet--not provided) by Grade 2 or better 3/8" channel nuts (not provided).1.Turn SL151 over and place onto threaded rods, inserting the rods into the three slots on top of the SL151 housing.(See Figure 8)2.Secure the threaded rods to the SL151 with Grade 2 or better 3/8 in. jam nuts (not provided) and washers (one of each on inside and one of each on outside-not provided).Figure 8Guide Wire(one on each side)Remove Screw (one on each side)Ceiling PanelGuide WireCeiling PanelClipCeiling Panel RemovedCAUTION:Avoid stressing or bending the lift during installation.e the provided push button (D) to operate the SL151 upand down, ensuring that all clearances are adequate. Installing Projector on SL151NOTE:bracket (a Listed accessory).1.Attach the SLB bracket to the projector following theinstructions included with the bracket.2.Attach the bracket with the projector to the SL151, adjustingleft or right by using the various attachment points in theSL151. (See Figure 10)•Adjust one or the other side of the bracket backward or forward by loosening two screws on each side. (SeeFigure 12)•Adjust bracket as required.•Tighten screws. (See Figure 12)78Unplug the SL151’s test cord (used for testing).Remove the jumper wire and supplied push button wiring (previously installed in the section) from the external terminal block. (See Figure 3)Connect control wiring following instructions included withthe controller and information in Table 1: Wiring Table NOTE:Any knockouts removed in the SL151 must bereplaced with a supplied rubber grommet (G).Feed the video and/or communications cables through theknockout in the rear or top of the lift and connect it to the projector.Ensure there is enough slack in the cables to allow forup and down movement of the lift.Secure cables as necessary using supplied mounting pads (E) and cable ties (B).CAUTION:KEEP SL151 OPEN WHILE PROJECTOR ISRUNNING OR IN COOLING MODE! Premature bulb failure or damage to electrical components may occur if lift closes.NOTE:If SL151 is cycled up and down repeatedly the motor’sthermal overload protection will stop operation.Operation will resume when the thermal overload resets (usually within 3 to 5 minutes).Connecting to Power SupplyIMPORTANT ! :This product must be connected to agrounded metal, permanent wiring system, or an equipment-grounding conductor must be run with the circuit conductors and connected to the equipment-grounding terminal or lead on the product.1.Disconnect and remove power inlet from interior junctionbox.2.Hardwire unit to a 120V 60Hz 12-amp power source.NOTE:This unit was designed to have conduit run directly intothe back of the interior junction box.WARNING:performed by a licensed electricianfollowing all local codes and ordinances.WARNING:DISCONNECT AND TERMINATE POWER LEADS PROPERLY MAY RESULT IN PERSONAL INJURY OR EQUIPMENT DAMAGE!! Licensed electrician must disconnect and terminate the leads to the power cord receptacle, and must hard wire the SL151 to a 12-amp power source.CAUTION:not lined up properly with rectangular holes.Figure 142.Carefully insert clips into rectangular holes in ceiling panel.3.Reattach guide wires (two places) to ceiling panel, usingscrews removed earlier. (See Figure 15)9SL151Installation Instructions10Table 1: WIRING TABLEFigure 16NOTE:The numbers listed in the SL151 Internal and SL151 External columns refer to the corresponding numbers located whereindicated in the wiring pictures. (See Figure 16)EXTERNAL WIRINGINTERNAL WIRINGTable 2: INTERNALTERMINAL DESCRIPTIONS1112Figure 17131415Chief Manufacturing, a products division of Milestone AV Technologies8820-000041 Rev022010 Milestone AV Technologies, a Duchossois Group Company04/10USA/International A8401 Eagle Creek Parkway, Savage, MN 55378P800.582.6480 / 952.894.6280F877.894.6918 / 952.894.6918Europe A Fellenoord 130 5611 ZB EINDHOVEN, The NetherlandsP+31 (0)40 2668620F+31 (0)40 2668615Asia Pacific A Office No. 1 on 12/F, Shatin Galleria18-24 Shan Mei StreetFotan, Shatin, Hong KongP852 2145 4099F852 2145 4477。

Chapter 2The Impact of Government Policy and Regulation on the Financial-Services IndustryFill in the Blank Questions1. The _____________________ was created as part of the Glass Steagall Act. In the beginning itinsured deposits up to $2,500.Answer: FDIC2. The________________________ is the law that states that a bank must get approved from theirregulatory body in order to combine with another bank.Answer: Bank Merger Act3. One tool that the Federal Reserve uses to control the money supply is _________________ . TheFederal Reserve will buy and sell T-bills when they are using this tool of monetary policy.Answer: open market operations4. The__________________________ was created in 1913 in response to a series of economicdepressions and failures. Its principal role is to serve as the lender of last resort and to stabilize the financial markets.Answer: Federal Reserve5. The __________________________ prevented banks from crossing state lines and made nationalbanks subject to the branching laws of their state. This act was later repealed by the Riegle Neal Interstate Banking law.Answer: McFadden-Pepper Act6. Because the FDIC levies fixed insurance premiums regardless of risk, this leads to a problem calledthe ____________________ among banks. The fixed premiums encourage all banks to accept greater risk.Answer: moral hazard7. In 1980, __________________________ was passed and lifted government ceilings on depositinterest rates in favor of free market interest rates.Answer: DIDMCA8. One tool that the Federal Reserve uses to control the money supply is _________________. TheFederal Reserve will change the interest rate they charge for short term loans when they are using this tool of monetary policy.Answer: changing the discount rate9. The first major federal banking law in the U.S. was the __________________________. This lawwas passed during the Civil War and set up a system for chartering national banks and created the OCC.Answer: National Banking Act10. The_________________________ was passed during the Great Depression. It separatedinvestment and commercial banks and created the FDIC.Answer: Glass-Steagall Act11. The__________________________ brought bank holding companies under the jurisdiction of theFederal Reserve.Answer: Bank Holding Company Act12. The__________________________ allows bank holding companies to acquire banks anywhere inthe United States. However, no one bank can control more than 30 percent of the deposits in any one state or more than 10 percent of the deposits across the country.Answer: Riegle-Neal Interstate Banking Act13. The allows banks to affiliate with insurance companies and securitiesfirms either through a holding company or as a subsidiary.Answer: Gramm-Leach-Bliley Act (Financial Services Modernization Act)14. Customers of financial-service companies may _____________________ of having their privateinformation shared with a third party such as a telemarketer. However, in order to do this they must tell the financial-services company in writing that they do not want their personal informationshared with outside parties.Answer: opt out15. The federal bank regulatory agency which examines the most banks is the ______________.Answer: FDIC16. The _________________ requires financial service companies to report suspicious activity incustomer accounts to the Treasury Department.Answer: U.S. Patriot Act17. The central bank of the new European Union is known as the _______________________.Answer: European Central Bank or ECB18. The _____________________ Act prohibits banks and other publicly owned firms frompublishing false or misleading financial performance information.Answer: Sarbanes-Oxley19.One of the main roles of the Federal Reserve today is . They have three tools thatthey use today to carry out this role; open market operations, the discount rate and legal reserverequirements.Answer: monetary policy20.The is the center of authority and decision making within the FederalReserve. It consists of seven members appointed by the president for terms not exceeding 14 years.Answer: Board of Governors21.The main regulators of insurance companies are .Answer: state insurance commissions22.Federal Credit Unions are regulated and examined by .Answer: the National Credit Union Administration.23.The makes it easier for victims of identity theft to file fraud alertsand allows the public to apply for a free credit report once a year.Answer: Fair and Accurate Credit Transactions Act (FACT Act)24.The makes it faster and less costly for banks to clear checks. Itallows for banks to electronically send check images instead of shipping paper checks across thecountry.Answer: Check 21 Act25.The was created by the National Banking Act and is part of theTreasury Department. It is the primary regulator of National Banks.Answer: Office of the Comptroller of the Currency (OCC)26.The _________________________ proposes various regulations applying to the financial markets-out” bill granted the US Treasury the means to to combat the recent credit crisis. This “bailpurchase troubled loans, allowed the FDIC to temporarily increase deposit insurance, andpermitted the government to inject additional capital into the banking system.Answer: The Emergency Economic Stabilization Act of 2008True/False QuestionsT F 27. Federal Reserve Act authorized the creation of the Federal Deposit Insurance Corporation.Answer: FalseT F 28. In the United States, fixed fees charged for deposit insurance, regardless of how risky a bank is, led to a problem known as moral hazard.Answer: TrueT F 28. Government-sponsored deposit insurance typically encourages individual depositors to monitor their banks' behavior in accepting risk.Answer: FalseT F 29. The Federal Reserve changes reserve requirements frequently because the affect of these changes is so small.Answer: FalseT F 30. The Bank Merger Act and its amendments requires that Bank Holding Companies be under the jurisdiction of the Federal Reserve.Answer: FalseT F 31. National banks cannot merge without the prior approval of the Comptroller of the Currency.Answer: TrueT F 32. The Truth in Lending (or Consumer Credit Protection) Act was passed by the U.S.Congress to outlaw discrimination in providing bank services to the public.Answer: FalseT F 33. The federal law that states individuals and families cannot be denied a loan merely because of their age, sex, race, national origin or religious affiliation is known as the CompetitiveEquality in Banking Act.Answer: FalseT F 34. Under the terms of the 1994 Riegle-Neal Interstate Banking law bank holding companies can acquire a bank anywhere inside the United States, subject to Federal Reserve Boardapproval.Answer: TrueT F 35. The 1994 federal interstate banking bill does not limit the percentage of statewide or nationwide deposits that an interstate banking firm is allowed to control.Answer: FalseT F 36. The term "regulatory dialectic" refers to the dual system of banking regulation in the United States and selected other countries where both the federal or central governmentand local governments regulate banks.Answer: FalseT F 37. The moral hazard problem of banks is caused by the fixed insurance premiums paid by banks and causes banks to accept greater risk.Answer: TrueT F 38. When the Federal Reserve buys T-bills through its open market operations, it causes the growth of bank deposits and loans to decrease.Answer: FalseT F 39. When the Federal Reserve increases the discount rate it generally causes other interest rates to decrease.Answer: FalseT F 40. The National Bank Act (1863) created the Federal Reserve which acts as the lender of last resort.Answer: FalseT F 41. FIRREA (1989) allowed bank holding companies to acquire nonblank depository institutions and, if desired, convert them into branch offices.Answer: TrueT F 42. The Sarbanes-Oxley Act allows banks, insurance companies, and securities firms to form Financial Holding Companies (FHCs).Answer: FalseT F 43. The Gramm-Leach-Bliley Act of 1999 essentially repeals the Glass-Steagall Act passed in the 1930s.Answer: TrueT F 44. Passed in 1977, the Equal Credit Opportunity Act prohibits banks from discriminating against customers merely on the basis of the neighborhood in which they live.Answer: FalseT F 45. The tool used by the Federal Reserve System to influence the economy and behavior ofbanks is known as moral hazard.Answer: FalseT F 46. One of the principal reasons for government regulation of financial firms is to protect the safety and soundness of the financial system.Answer: TrueMultiple Choice Questions47.Banks are regulated for which of the reasons listed below?A) Banks are leading repositories of the public's savings.B) Banks have the power to create money.C) Banks provide businesses and individuals with loans that support consumption and investmentspending.D) Banks assist governments in conducting economic policy, collecting taxes and dispensinggovernment payments.E) All of the above.Answer: E48.An institutional arrangement in which federal and state authorities both have significant bankregulatory powers is referred to as:A) Balance of PowerB) FederalismC) Dual Banking SystemD) Cooperative RegulationE) Coordinated ControlAnswer: C49.The law that set up the federal banking system and provided for the chartering of national bankswas the:A) National Bank ActB) McFadden-Pepper ActC) Glass-Steagall ActD) Bank Merger ActE) Federal Reserve ActAnswer: A50.The federal law that prohibited federally supervised commercial banks from offering investmentbanking services on privately issued securities is known as:A) The Glass-Steagall ActB) The Bank Merger ActC) The Depository Institutions Deregulation and Monetary Control ActD) The Federal Reserve ActE) None of the AboveAnswer: A51.The Gramm-Leach-Bliley Act (Financial Services Modernization Act) calls for linkinggovernment supervision of the financial-services firm to the types of activities that the firmundertakes. For example the insurance portion of the firm would be regulated by state insurance commissions and the banking portion of the firm would be regulated by banking regulators. This approach to government supervision of financial services is known as:A) Consolidated regulation and supervision.B) Functional regulation.C) Services oversight.D) Umbrella supervision and regulation.E) None of the above.Answer: B52.The Federal Reserve policy tool under which the Fed attempts to bring psychological pressure tobear on individuals and institutions to conform to the Fed's policies, using letters, phone calls,and speeches, is known as:A) Margin requirementsB) Moral suasionC) Discount window supervisionD) Conference and compromiseE) None of the above.Answer: B53.The 1994 law that allowed bank holding companies to acquire banks anywhere in the U.S. is:A) The Glass-Steagall ActB) The Federal Deposit Insurance Corporation Improvement ActC) The National Bank ActD) The Riegle-Neal Interstate Banking and Branching Efficiency Act.E) None of the above.Answer: D54.The federal law that allowed the Federal Reserve to set margin requirements is:A) The National Banking Act.B) The McFadden-Pepper Act.C) The Glass Steagall Act.D) The Federal Reserve Act.E) None of the above.Answer: C55.Of the principal reasons for regulating banks, what was the primary purpose of the NationalBanking Act (1863)?A) Protection of the public's savingsB) Control of the money supplyC) Providing support for government activitiesD) Maintaining confidence in the banking systemE) Preventing banks from realizing monopoly powers56.Of the principal reasons for regulating banks, what was the primary purpose of the Federal ReserveAct of 1913?A) Protection of the public's savingsB) Control of the money supplyC) Preventing banks from realizing monopoly powersD) Ensuring an adequate and fair supply of loansE) None of the above.Answer: B57.The law that allows lifted government deposit interest ceilings and allowed them to pay acompetitive interest rate is:A) The National Banking Act.B) The Glass Steagall Act.C) The Bank Merger Act.D) DIDMCAE) None of the above.Answer: D58.The law that allows banks to affiliate with insurance companies and security brokerage firms toform financial services conglomerates isA) The National Banking ActB) The Glass Steagall ActC) The Garn St. Germain ActD) The Riegle Neal Interstate Banking ActE) The Gramm-Leach-Bliley Act (Financial Services Modernization Act)Answer: E59.Of the principal reasons for regulating banks, what was the primary purpose of the Truth inLending Law?A) Protection of the public's savingsB) Control of the money supplyC) Preventing banks from realizing monopoly powersD) Ensuring an adequate and fair supply of loansE) None of the above.Answer: D60.Which of the following is an unresolved issue in the new century?A) What should be done about the regulatory safety net set up to protect small depositors?B) If financial institutions are allowed to take on more risk, how can taxpayers be protected frompaying the bill when more institutions fail?C) Does functional regulation actually work?D) Should regulators allow the mixing of banking and commerce?E) All of the above are unresolved issues61.The law that made bank and nonbank depository institutions more alike in the services they couldoffer and allowed banks and thrifts to more fully compete with other financial institutions is:A) The National Banking ActB) The Federal Reserve ActC) The Garn-St. Germain ActD) The Riegle-Neal Interstate Banking and Branching Efficiency ActE) The Gramm-Leach-Bliley Act (Financial Services Modernization Act)Answer: C62.The law that allowed bank holding companies to acquire nonbank depository institutions andconvert them to branches is:A) The National Banking ActB) The Garn-St. Germain ActC) FIRREAD) The Riegle-Neal Interstate Banking and Branching Efficiency ActE) None of the AboveAnswer: C63.The equivalent of the Federal Reserve System in Europe is known as the:A) European UnionB) Bank of LondonC) Basle GroupD) European Central BankE) Swiss Bank CorporationAnswer: D64.The new financial organization created by Gramm-Leach-Bliley is theA) Financial Holding CompanyB) Bank Holding CompanyC) European Central BankD) Financial Service CorporationE) Financial Modernization OrganizationAnswer: A65.The act which requires financial institutions to share information about customer identities withgovernment agencies is:A) The Sarbanes-Oxley ActB) The U.S. Treasury Department ActC) The 9/11 ActD) The USA Patriot ActE) The Gramm-Leach-Bliley ActAnswer: D66.The 1977 law that prevents banks from “redlining” certain neighborhoods, refusing to serve those areas is:A) The National Banking ActB) The Garn-St. Germain ActC) FIRREAD) The Riegle-Neal Interstate Banking and Branching Efficiency ActE) Community Reinvestment Act (CRA)Answer: Emon minimum capital requirements on banks in leading industrialized nations that are basedon the riskiness of their assets is imposed by:A) The National Banking ActB) FIRREAC) The International Banking ActD) The Basel AgreementE) None of the AboveAnswer: D68.The fastest growing crime in the U.S. is:A) Financial statement misrepresentationB) Bank robberiesC) Individual privacy violationsD) Credit card fraudE) Identity theftAnswer: E69.The oldest federal bank agency is the:A) OCCB) FDICC) FRSD) FHCE) BHCAnswer: A70.The federal agency that regulates the most banks is the:A) OCCB) FDICC) FRSD) FHCE) BHCAnswer: B71.Which federal banking act requires that financial service providers establish the identity of anycustomers opening new accounts?A) Sarbanes-Oxley ActB) USA Patriot ActC) Check 21 ActD) The FACT ActE) Bankruptcy Abuse Prevention and Consumer Protection ActAnswer: B72.Which federal banking act prohibits publishing false or misleading information about the financialperformance of a public company and requires top corporate officers to vouch for the accuracy of their company’s financial statements?A) Sarbanes-Oxley ActB) USA Patriot ActC) Check 21 ActD) The FACT ActE) Bankruptcy Abuse Prevention and Consumer Protection ActAnswer: A73.Which federal banking act reduces the need for banks to transport paper checks across the country?A) Sarbanes-Oxley ActB) USA Patriot ActC) Check 21 ActD) The FACT ActE) Bankruptcy Abuse Prevention and Consumer Protection ActAnswer: C74.Which federal banking act forces more individuals to repay at least part of what they owe and willpush higher-income borrowers into more costly forms of bankruptcy?A) Sarbanes-Oxley ActB) USA Patriot ActC) Check 21 ActD) The FACT ActE) Bankruptcy Abuse Prevention and Consumer Protection ActAnswer: E75.Which federal banking act requires the Federal Trade Commission to make it easier for victims ofidentity theft to make theft reports and requires credit bureaus to help victims resolve theproblem?A) Sarbanes-Oxley ActB) USA Patriot ActC) Check 21 ActD) The FACT ActE) Bankruptcy Abuse Prevention and Consumer Protection ActAnswer: D76.The _________ allows adequately capitalized bank holding companies to acquire banks in anystate.A)Riegle-Neal Interstate Banking and Branching Efficiency ActB)Competitive Equality Banking Act25C)Financial Institutions Reform, Recovery and Enforcement ActD)Federal Deposit Insurance Corporation Improvement ActE)Depository Institutions Deregulation and Monetary Control ActAnswer: A77.One of the earliest theories regarding the impact of regulation on banks was developed by GeorgeStigler. He contends that:A) Firms in regulated industries actually seek out regulations because they bring monopolisticrents.B) Regulations shelter firms from changes in demand and cost, lowering its risk.C) Regulations can increase consumer confidence which increases customer loyalty to regulatedfirms.D) Depository institutions should be regulated no differently than any other corporation with nosubsidies or special privileges.E) None of the aboveAnswer: A78.Samual Peltzman had an opposing view to George Stigler on the impact of regulation on banks. Hecontends that:A) Firms in regulated industries actually seek out regulations because they bring monopolisticrents.B) Regulations shelter firms from changes in demand and cost, lowering its risk.C) Regulations can increase consumer confidence which increases customer loyalty to regulatedfirms.D) Depository institutions should be regulated no differently than any other corporation with nosubsidies or special privileges.E) None of the aboveAnswer: B79.There is an important debate raging today regarding whether banks should be regulated at all.George Benston contends that:A) Firms in regulated industries actually seek out regulations because they bring monopolisticrents.B) Regulations shelter firms from changes in demand and cost, lowering its risk.C) Regulations can increase consumer confidence which increases customer loyalty to regulatedfirms.D) Depository institutions should be regulated no differently than any other corporation with nosubsidies or special privileges.E) None of the aboveAnswer: D80.The European Central Bank has the main goal of:A) Ensuring the economy grows at an adequate rate.B) Keeping unemployment low.C) Ensuring price stability.D) Ensuring an adequate and fair supply of loans.E) All of the aboveAnswer: C26Test Bank, Chapter 281.Which of the following has become the principal tool of central bank monetary policy today?A) Open market operationsB) Changing the discount rateC) Changing reserve requirementsD) Using moral suasionE) None of the aboveAnswer: A82.The Federal Reserve buys Treasury Bills in the open market. This will tend to:A) Cause interest rates in the market to riseB) Cause interest rates in the market to fallC) Cause reserves held at the Federal Reserve to decreaseD) Cause a decrease in the growth of deposits and loansE) All of the aboveAnswer: B83.Which federal banking act extends deposit insurance coverage on qualified retirement accountsfrom $100,000 to $250,000 and authorizes the FDIC to periodically increase deposit insurancecoverage to keep up with inflation?A) Sarbanes-Oxley ActB) The Gramm-Leach-Bliley ActC) Check 21 ActD) The FACT ActE) Federal Deposit Insurance Reform ActAnswer: E84.The Financial Services Regulatory Relief Act of 2006 does the following:A) Adds selected new service powers to depository institutionsB) Loosens regulations on depository institutionsC) Grants the Federal Reserve authority to pay interest on depository institutions’D) All of the aboveE) None of the aboveAnswer: D85.The Emergency Economic Stabilization Act passed in 2008 during the global credit crisis allowedthe following:A) An emergency sale of “bad assets”B) Temporary increase of FDIC deposit insurance to $250,000 for all depositsC) Injections of capital by the government into banks and other qualified lendersD) Closer surveillance of the mortgage market participants, such as brokers and lendersE) All of the aboveAnswer: E27。

公司理财习题答案第十九章Chapter 19: Issuing Equity Securities to the Public19.1 a. A general cash offer is a public issue of a security that is sold to all interestedinvestors. A general cash offer is not restricted to current stockholders.b. A rights offer is an issuance that gives the current stockholders the opportunity tomaintain a proportionate ownership of the company. The shares are offered to thecurrent shareholders before they are offered to the general public.c. A registration statement is the filing with the SEC, which discloses all pertinentinformation concerning the corporation that wants to make a public offering.d. A prospectus is the legal document that must be given to every investor whocontemplates purchasing registered securities in a public offering. The prospectusdescribes the details of the company and the particular issue.e. An initial public offering (IPO) is the original sale of a company’s securities to thepublic. An IPO is also called an unseasoned issue.f. A seasoned new issue is a new issue of stock after the company’s securities havepreviously been publicly traded.g. Shelf registration is an SEC procedure, which allows a firm to file a masterregistration statement summarizing the planned financing for a two year period.The firm files short forms whenever it wishes to sell any of the approved masterregistration securities during the two year period.19.2 a. The Securities Exchange Act of 1933 regulates the trading of new, unseasonedsecurities.b. The Securities Exchange Act of 1934 regulates the trading of seasoned securities.This act regulates trading in what is called the secondary market.19.3 Competitive offer and negotiated offer are two methods to select investment bankers forunderwriting. Under the competitive offers, the issuing firm can award its securities to the underwriter with the highest bid, which in turn implies the lowest cost. On the other hand, in negotiated deals, underwriter gains much information about the issuing firm throughnegotiation, which helps increase the possibility of a successful offering.19.4 a. Firm commitment underwriting is an underwriting in which an investment bankingfirm commits to buy the entire issue. It will then sell the shares to the public. Theinvestment banking firm assumes all financial responsibility for any unsold shares.b. A syndicate is a group of investment banking companies that agree to cooperate in ajoint venture to underwrite an offering of securities.c. The spread is the difference between the underwriter’s buying price and the offeringprice. The spread is a fee for the services of the underwriting syndicate.d. Best efforts underwriting is an offering in which the underwriter agrees to distributeas much of the offering as possible. Any unsold portions of the offering are returnedto the issuing firm.19.5 a. The risk in a firm commitment underwriting is borne by the underwriter(s). Thesyndicate agrees to purchase all of an offering. Then they sell as much of it aspossible. Any unsold shares remain the responsibility of the underwriter(s). Therisk that the security’s price may become unfavorable also lies with theunderwriter(s).b. The issuing firm bears the risk in a best efforts underwriting. The underwriter(s)agrees to make its best effort to sell the securities for the firm. Any unsoldsecurities are the responsibility of the firm.19.6 In general, the new price per share after the offering is:P = (market value + proceeds from offering) / total number of sharesi. At $40 P = ($400,000 + ($40 x 5,000)) / 15,000 =$40ii. At $20 P = ($400,000 + ($20 x 5,000)) / 15,000 = $33.33iii. At $10 P = ($400,000 + ($10 x 5,000)) / 15,000 = $3019.7 The poor performance result should not surprise the professor. Since he subscribed to everyinitial public offering, he was bound to get fewer superior performers and more poorperformers. Financial analysts studied the companies and separated the bad prospects from the good ones. The analysts invested in only the good prospects. These issues becameoversubscribed. Since these good prospects were oversubscribed, the professor received a limited amount of stock from them. The poor prospects were probably under-subscribed, so he received as much of their stock as he desired. The result was that his performance was below average because the weight on the poor performers in his portfolio was greater than the weight on the superio r performers. This result is called the winner’s curse. The professor “won” the shares, but his bane was that the shares he “won” were poorperformers.19.8 There are two possible reasons for stock price drops on the announcement of a new equityissue:i. M anagement may attempt to issue new shares of stock when the stock is over-valued, that is, the intrinsic value is lower than the market price. The price drop isthe result of the downward adjustment of the overvaluation.ii. W ith the increase of financial distress possibility, the firm is more likely to raise capital through equity than debt. The market price drops because it interprets theequity issue announcement as bad news.19.9 The costs of new issues include underwriter’s spread, direct and indirect expenses, negativeabnormal returns associated with the equity offer announcement, under-pricing, and green-shoe option.19.10 a. $12,000,000/$15 = 800,000b. 2,400,000/800,000 = 3c. The shareholders must remit $15 and three rights for each share of new stock theywish to purchase.19.11 a. In general, the ex-rights price isP = (Market value + Proceeds from offering) / Total number of sharesP = ($25 x 100,000 + $20 x 10,000) / (100,000 + 10,000) = $24.55b. The value of a right is the difference between the rights-on price of the stock andthe ex-rights price of the stock. The value of a right is $0.45 (=$25 - $24.55).Alternative solution:The value of a right can also be computed as:(Ex-rights price - Subscription price) / Number of rights required to buy a share ofstockValue of a right = ($24.55 - $20) / 10 = $0.45c. The market value of the firm after the issue is the number of shares times the ex-rights price.Value = 110,000 x $24.55 $2,700,000 (Note that the exact ex-rights price is$24.5454.)公司理财习题答案第十九章d. The most important reason to offer rights is to reduce issuance costs. Also, rightsofferings do not dilute ownership and they provide shareholders with moreflexibility. Shareholders can either exercise or sell their rights.19.12 The value of a right = $50 - $45 = $5The number of new shares = $5,000,000 / $25 = 200,000The number of rights / share = ($45 - $25) / $5 = 4The number of old shares = 200,000 x 4 = 800,00019.13 a. Assume you hold three shares of the company’s stock. The value of your holdingsbefore you exercise your rights is 3 x $45 = $135. When you exercise, you mustremit the three rights you receive for owning three shares, and ten dollars. You haveincreased your equity investment by $10. The value of your holdings is $135 + $10= $145. After exercise, you own four shares of stock. Thus, the price per share ofyour stock is $145 / 4 = $36.25.b. The value of a right is the difference between the rights-on price of the stock andthe ex-rights price of the stock. The value of a right is $8.75 (=$45 - $36.25).c. The price drop will occur on the ex-rights date. Although the ex-rights date isneither the expiration date nor the date on which the rights are first exercisable, it isthe day that the price will drop. If you purchase the stock before the ex-rights date,you will receive the rights. If you purchase the stock on or after the ex-rights date,you will not receive the rights. Since rights have value, the stockholder receivingthe rights must pay for them. The stock price drop on the ex-rights day is similar tothe stock price drop on an ex-dividend day.19.14 a. Stock price (ex-right) = (13+2) / (1+0.5) = $10Subscription price = 2 / 0.5 = $4Right’s price = 13-10 = $3= (10-4) / 2 = $3b. Stock price (ex-right) = (13+2) / (1+0.25) = $12Subscription price = 2 / 0.25 = $8Right’s price = 13-12 = $1= (12-8) / 4 = $1c. The stockholders’ wealth is the same between the two arrangements.19.15 If the interest of management is to increase the wealth of the current shareholders, a rightsoffering may be preferable because issuing costs as a percentage of capital raised is lower for rights offerings. Management does not have to worry about underpricing becauseshareholders get the rights, which are worth something. Rights offerings also preventexisting shareholders from losing proportionate ownership control. Finally, whether the shareholders exercise or sell their rights, they are the only beneficiaries.19.16 Reasons for shelf registration include:i. Flexibility in raising money only when necessary without incurring additional issuancecosts.ii. As Bhagat, Marr and Thompson showed, shelf registration is less costly than conventional underwritten issues.iii. Issuance of securities is greatly simplified.19.17 Suppliers of venture capital can include:i. Wealthy families / individuals.ii. Investment funds provided by a number of private partnerships and corporations.iii. Venture capital subsidiaries established by large industrial or financial corporations.iv. “Angels” in an informal venture capital market.19.18 The proceeds from IPO are used to:i. exchange inside equity ownership for outside equity ownershipii. finance the present and future operations of the IPO firms.19.19 Basic empirical regularities in IPOs include:i. underpricing of the offer price,ii. best-efforts offerings are generally used for small IPOs and firm-commitment offerings are generally used for large IPOs,iii. the underwriter price stabilization of the after market and,iv. that issuing costs are higher in negotiated deals than in competitive ones.。