FIN 419 Week 4 Summary

FIN 419 Week 4 Summary - The term Investment Banking can be...

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The term Investment Banking can be defined as a financial mediator that dedicate himself in selling the new-fangled securities as well suggest organizations in favor of foremost financial dealings or associations” (Gitman, 2006, p. 336). The principle task in which the investment banker usually takes part is the underwriting approach. This technique incorporates doing borrowing at a cost at which both the parties have same opinion as well as keeping in mind the factor of risk whether it would be sold for the profit or loss. If we talk about the term leverage “it is the outcome by employing assets that are of fixed-costs to amplify the profitability to the company’s shareholders” (Gitman, 2006, p. 553). In case of any reduction in the leverage outcomes it definitely cause shrinkage in the return along with the occurrence of risk factor, on the other hand an amplification in the leverage might helps in boosting up the profits as well as the factor of risk. When we talk about the operating or working leverage that actually resulted from the occurrence
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This note was uploaded on 02/26/2012 for the course FIN 419 taught by Professor Abdul during the Fall '11 term at University of Phoenix.

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FIN 419 Week 4 Summary - The term Investment Banking can be...

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