FIN461825 - FIN 461 8/25/11 5 Functions: Corporate finance...

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Unformatted text preview: FIN 461 8/25/11 5 Functions: Corporate finance (advisory & underwriting) Sales: retail brokers and institutional Trading: equity, securities, etc. Research: equity and security research, FI anaylsts Syndicate: placements Why IB: repeated game Equity underwriting : IPOs, etc. US Bond: FI Firm commitment offering: Firm IB Market Bests efforts offering: Issuer/IB Market Best effort: IB does not buy securities, get a rate for helping sell securities to market Most speculative offerings tend to be firm commitment . . .I assume because locks in $$ raised by issuer Material transaction (M & A) 8k Security Issuance: prospectus …424B4 (IPO) always 424** Tender Offers: 13d; 14d individuals or institutions that breach certain thresholds…taking a 5%+ stake in a firm. Prevents people from slowly building large stake instead of surprising other shareholders Graham-Leach-Bliley of 1999 over turned Glass-Steagal. De-regulated in-order for domestic IB’s to compete with global …allowed global Ibs to be created Sab-Ox tries to put wall between IB activities and research IB get a 7% cut on IPO deals GM IPO’s were bellowed 7% fee rate….near 2% When very large, like Visa and Mastercard, closer to 4% Money does not come form the IPO, almost like a loss leader, get their business forever is the idea ...
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This document was uploaded on 11/02/2011 for the course FIN 461 at Miami University.

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