A number of the advisory services investment banks provide for their corporate clients are defined as off-balance-sheet business. One service is placing new issues with institutional investors. Outline the nature of this service and explain why it might be sought after by large corporations
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A number of the advisory services investment banks provide for their corporate clients are defined as off-balance-sheet business. One service is placing new issues with institutional investors. Outline the nature of this service and explain why it might be sought after by large corporations
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- Which one of the following statements is TRUE? a. Creditors have a claim on a firm's earning stream through the dividend payments they receive. b. One tool of corporate governance is a company's tax avoidance strategy. c. One tool of corporate governance is stock repurchases. d. One tool of corporate governance is how the company's charter affects the likelihood of a takeover. e. One tool of corporate governance is choosing a good investment banker.What is the important question of corporate finance when a finance manager advises the company’s management to accept or reject a long-term investment project? What the finance manager needs to analyse to justify her/his adviceHow a corporation is different from a partnership in terms of owner, legal status, liabilities, life, regulation, access to capital, taxation and transfer?Which of the following is true of financial institutions? A. Financial institutions are the regulators of interest rates and other returns in financial markets. B. Financial institutions are accountable and responsible in reporting financial information for publicly-traded corporations. C. Financial institutions are required by the Sarbanes-Oxley Act to disclose the environment-friendly measures taken by investment corporations.
- he Jones Bank Ltd has two departments. a) a pension fund department, which invests money on behalf of clients and customers, by investing in bonds, shares and so on. b) a merchant bank department, one of whose clients is the prestigious and dynamic Sampson and Brown Ltd, which is to offer a new tranche of shares to the investment community. Required: Identify the potential conflict of interest. DISCUSSION In times of recession, it is the banks who ultimately decide whether a particular business survives or fails. There is a widespread view that banks should support small businesses come what may, as not to do so would be socially irresponsible. Give reasons for and against this view.The Investment and Merchant bankers in managing the IPOs provide one or more of the following services: Ensure legal compliance related to public issues Design and price financial instruments Market the issue to institutional and retail investors All of the aboveGive three reasons why accountants need to be ethical in their duties in regards to preparation of financial statements. Explain the importance of these ethics to the companycompliance issues for emerging growth companies. Respond to this question: Is SOX so cumbersome that it limits economic growth of new businesses?
- Finance professionals make decisions that fall into three distinctive areas: corporate finance, capital markets, and investments. Below is a set of decisions made by finance professionals. Categorize the decisions according to the area of finance to which they belong. Decision Corporate Finance Capital Markets Investments Ethan must make a decision on how to cut costs so that his company can generate extra cash flow to acquire assets. Radford works for an investment bank and makes decisions about the sale of new common stock by ABCL Inc. Aakash works for a financial advising firm. He must create a financial plan and come up with a list of securities in which his client can invest. Aakash must make decisions regarding the investments that he should recommend to his clients to include in their portfolio.Which of the following statements is INCORRECT ? Large investment banks finance most of their activities by using retail consumer deposits as the primary source of funds. Failure to monitor the actions of firms in a timely and complete fashion after purchasing securities in the firms exposes investors to agency costs. As a delegated monitor, a financial institution's actions reduce agency costs. Financial institutions provide economies of scale in transaction costsWhat are the basic arguments for increasing capital requirements at large commercial banks? In what ways will depositors, stockholders, and society in general benefit? How might each group be disadvantaged? As commercial banks enter new lines of business such as brokerage, how much additional capital should be required? Should these new lines of business be insured by the FDIC? Why or why not? Give examples from today’s financial marketplace.
- A crucial role of financial managers is in making financial decisions and exercising control over finances in the organization. They make use of techniques like ratio analysis, financial forecasting, profit, and loss analysis, among others. Imaging you are the CFO of a multinational corporation and part of your daily tasks are the making of financial decisions, and one specific of those decisions will boost this quarter earnings but will impact stock market value. What should you do? Implement your decision or modify it to halter the potential impact of stock value?Why does financial accounting have a positive impact on our society? a. It entails a detailed transaction record necessary for filing taxes with the Internal Revenue Service (IRS).b. It allows investors and creditors to redirect their resources to successful companies and away from unsuccessful companies.c. It prevents competitors from being able to steal the company’s customers.d. It provides a system of useful internal reports for management decision making.Examine the reasons as to why investment banks achieve high levels profits and why large profits cause controversy with the public? Explain.