Why stock would generate bigger return on bonds

Payment system check clearing and fedwire wire

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Unformatted text preview: be no issue with lawsuits. This requires “due diligence” by an investment bank including a company visit. Putting together disclosure document is the most important part of this legal protection if does due diligence. Registration statement is a name for this. If a public deal, file registration statement with SEC – prepared by counsel with help from investment bank. Go through comments process with SEC, during which you can still solicit potential investors (and get indicators of interest, “red herring’ or preliminary prospectus) “circle investors”, clear SEC when investor says yes im in for 100,000 dollars when is the closing, that is hard circling. Lawyers prepare closing documents Bankers take indications of interest and convert them to orders at this point. Closing/pricing – less underwriting discount (7% for IPOs) How much demand If IPO, securities start trading Potential Green Shoe exercise Facebook IPO: they got very aggressive at last 48 hours before pricing IPO, they increased price and amount of shares that they were going to sell. great result for people selling shares in that IPO, VC’s benefited and so did facebook because of this. After a couple of days, stock dropped below IPO price (about 1/3 price of IPO) because of this aggressiveness. This means facebook would struggle to do equity raise right now. Securities start trading, the Green shoe happens (option, 30 days where Ibank can purchase up to 15% of offering size at the offering price, difference in price is profit (did IPO of 20, stocks go up to 25, then make 5$ per share, can be very lucrative)) Financial institutions: The Federal Reserve Board (“The Fed”) Origins and history: Successor to two banks of the US: brainchild of Alexander Hamilton, and second one of Andrew Jackson snuffed out Formed in 1913 Reaction to panics of late 19th century and 1907 panic: similar to 2008 panic Central bank of country, and arguably the world. Structure of the Fed: 12 reserve banks around country (Richmond, VA example) FOMC (federal open market committee) – 7 governors (14 year terms, every two years one is up for retirement and cannot serve back to back can serve more than 14 years if take over unexpired term from previous person) +4+1 (Ny fed has permanent seat, 11 other banks rotate for the other 4 seats) Policy- making division of Fed, setting monetary policy. Testimo...
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This document was uploaded on 03/27/2014 for the course FINC 150 at Georgetown.

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