There are several restrictions such as who can buy the stock and even what types of firms can use this process. Many of these regulations vary by state. This is where the compnay sells new stock to investors who hold rights. This type of issue typically has lower floatation costs. Additionally here is an excellent site on several costs of capital issues .
Convertibles are again a hot topic.
They are often a means of a firm issuing securities when there is a great opportunity for the firm to take advantage of typical bond holders. An older version of much of this can be found in Word format here . The PowerPoint slides are available here . Some new evidence , Journal of Financial Economics, Vol.