IPE - 5/22/10 Click to edit Master subtitle style...

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Unformatted text preview: 5/22/10 Click to edit Master subtitle style Securities Firms 5/22/10  Security firms serve as important intermediaries by helping government and firms raise funds  Security firms offer a variety of services, most of which can be classified as investment banking . 5/22/10 Functions of the Securities  Maintaining orderly markets  Raising new capital  Managing investment capital 5/22/10 Maintaining orderly Markets  As organized exchanges were established, the securities transaction process was standardized as of practices considered to be fraudulent.  For the typical security transaction on an exchange, brokerage firms represent both the buyer and the seller. 5/22/10 Raising New Capital  Investment Banking firms (IBFs) play a major role in helping corporations and governments raise capital.  They place bonds of corporations and governments and stocks of corporations with investors. 5/22/10 Managing Investment Capital:  Brokerage firms compile and assess information that can affect future securities prices, and then identify the types of investments that are suitable for a particular investor.  They may help an investor achieve higher-risk adjusted returns. 5/22/10 Investment Banking Services:  One of the main functions of investment banking firms is raising capital for corporations.  These firms originate structure and place securities in the capital markets to raise funds for corporations.  Another critical function of investment banking 5/22/10  A key component of the advisory function is the valuation of a business. Investment banking firms assess the potential value of target firms so that they can advise corporations on whether to merge and on the appropriate price to offer.  The valuation process also is used for advising on potential divestiture and on leveraged buyouts. 5/22/10 How Investment Banking firms  Origination  Underwriting Stock  Distribution of stock  Advising 5/22/10 Origination:  When a corporation decides to publicly issue...
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IPE - 5/22/10 Click to edit Master subtitle style...

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