Master Thesis On Finance And Investments

Abstract: The paper examines the IPO of Bharti Infratel Ltd., one of the top ten IPOs by amount of capital raised in Indian history. The IPO is also interesting to study as Bharti Infratel is one of the first telecom tower and infrastructure provider companies in India and GTL Ltd. is the only other Indian company in this sector to have gone public till date. The scope of the paper is to understand the rationale behind raising capital with respect to internal factors as well as industry specific factors. Further, a critical analysis has been conducted on the IPO activity

Loeb specified conditions for this. First, we need robust financial markets where there is liquidity, and a person who invests $10,000 to $20,000 is a potential for the IPO, and for it to

In our economic economy today, we have gotten a few high profile cases were people have tried to make money by using illegal tactics, and these are illegal tactics are based on the insider information. These high profile cases were on Martha Stewart and President George W. Bush. This is why I chose to write my paper on what exactly "Insider Trading" is. Insider trading has to do with stocks, on the stock market. The stock market is basically an organized place where stocks and bonds are traded. The members of this exchange usually buy and sell the stocks for others while charging a commission for doing this work for their clients. Although more and more people are now trading online stockbrokers are not as in demand

* The market is extremely unpredictable and an unsuccessful IPO can result in a great loss of time as well as money for the company

Insider trading is something that comes up in the media every couple of years and can be confusing to some who don’t have a knack for finance related matters. However, for those who aren’t familiar, this type of trading has been happening for as long as companies have been traded publically. Because there has to be a reason for something to be determined illegal in the United States from the past, court rulings are usually made based on cases from the past which is referred to as stare decisis2.With cases from the past like Strong v. Repide (1909) and Goodwin v. Agassiz (1933) shaping our court decisions in the present, the legality of utilizing insider information for a profit is still very unclear3. Even with monumental court decisions from the past as stated above, the definition of an insider began to gain clarity in the 1930’s. When the market fell in 1929, the Securities and Exchange Commission (SEC) was created shortly

For my book report I read an interesting book made up of 12 different stories or cases from American History called “Business Adventures: Twelve Classic Tales From the World of Wall Street”, by John Brooks. Each chapter is different from the next having no connection between them besides them all being about investing and business. This book offers many different insightful ideas on how the stock market works and I’ll take you through each chapter separately.

Baker, M. & Wurgler, J. 2002, ‘Market Timing and Capital Structure,’ Journal of Finance, vol. 57, pp 1-32

The valuation and technique used to compute Facebook 's Initial Public Offering comprised of various target and subjective components to decide the best gauge or the reasonable estimation of their Class B basic stock. A few elements considered were late private stock deal exchanges; verifiable money related results, assessed patterns, and prospects for Facebook 's future budgetary execution. Extra elements were the execution and business sector position about contenders and comparative traded on an open market organizations. Likewise the monetary and focused environment, incorporating the business in which Facebook works; and free outsider valuations.

The discovery period is another important factor that affects prices of the stock. Normally the discovery period should not be more than 30 minutes as any increase to more than 1 hour tends to make prices drop since that will signify lack of rush for the IPO.

This organizational pricing tactic gets the share prices opposite from the great demands of the community investors. The political incentive also plays a role in determining the underpricing of the IPO shares as underpricing allows for strong government-oriented framework in China. Through the high returns, these Politian’s entice more potential new issuers and political media attentions. Getting a wide reporting in the top political news televisions and other media outlets are vital for these politicians as such prominences may underwrite to their political position. Marcel argues that powerful partisan media in China is more likely to pull attention from the government officials that facilitate the advancement of these politicians’ career. The high demands of the IPO shares attribute to a huge quantity of national investors in China. As seen in the figures presented above, there was a growing number of individual investors involved in trading A-shares in the last decade. According to Diebold and Yilmaz, there have been over 200 million separate domestic stockholders in Chinese financial market by the end of 2012 (p.188). The great demands for emerging firms are also due to absent alternate investment choice in China, therefore the National Bureau of Statistics of China, the income per capital of the Chinese nationals increased on average by 14.5% per year on from 20020to 2012 (Diebold, Yilmaz, p.190). In the meantime, the

In practice, Dodd and Officer found evidence that no significant abnormal returns (return of a security over its average or expected return) occurred on the day take over rumour was published, although some abnormal returns typically occurred prior to the publicity of rumour. This prior abnormal return must be because of insider trading, as the unpublished information they possess allow them to predict the trend up to takeover bid, thus, at the date of take over published, market already reached equilibrium price.

It is true that IPO raises huge capital for the issuing company. But in order to launch an Initial Public Offering (IPO), it is also necessary to make certain investments. Setting up an IPO does not always lead to an improvement in the economic performance of the company. A continuing expenditure has to be incurred after the setting up of an IPO by the parent company. A lot of expenses have to be incurred in the form of legal fees, printing costs and accounting fees, which are connected to the registering of an IPO. Such expenses might cost hundreds of US dollars. Apart from such enormous costs, there are other factors as well that should be taken into consideration by the company while introducing an IPO.

The paper relates to three sets of literature: the capital structure, the location effect, and the peer effect. In the classical capital structure context, Fischer, Heinkel, and Zech-ner (1989) and Leland (1994; 1998), Hovakimian, Opler, and Titman (2001) show that firms periodically readjusts capital structures toward a target ratio. Lemmon, Roberts, Zender (2008) show that the majority of changes in leverage ratio are caused “by an unobserved time-invariant effect that generates surprisingly stable capital structures.” Lemmon et al. (2008) show that this factor is present before the IPO. They conclude, “variation in capital structures is primarily determined by factors that remain stable for long periods of time.”

However the recent trends are concerning, the number of IPOs is lower than at corresponding points in previous cycles suggesting that the overall trend in IPOs is downwards. This may be a particularly severe cyclical effect in response to the recession; on the other hand it may reflect a structural change. In the next section, possible explanations are outlined.

Based on Talmor&Vasvari (2012), in spite of the comparatively small number of vehicles, the improvement is striking since some of the largest and most prominent private equity vehicles, such as KRR and Blackstone, have preferred to go public. From an academic angle, the surfacing of listed private equity vehicles drastically increases the opportunities for scrutinizing an industry that is famous for being notoriously private.