F17 Flashcards
underwriting stocks and bonds
hires investment bank to help with long-term debt and equity instruments.
Includes services:
-giving advice about market, prices, timing, what to sell/buy
-filling documents that is required
-underwriting where issuer sell stock or bond to investment bank which later distributes it to the public at higher price
registration statement
prospectus
registration statement= for new securities. information about firm
prospectus=part of registration that investors/public can review
syndicate
group of investment banks who all buy part of security and all responsible to sell of their part
equity sell
help sell part of company or whole company:
determine worth
prepare confidential memorandum with financial details for buyers
letter of intent from buyer with preliminary terms
due diligence period when seller accept and info verified
definitive agreement which is legally binden contract
merges and acquisitions
when two firms combine to form new company
broker
middlemen for investors who buy/sell securities
paid for matching buyer and seller
dealer
stand ready to buy/sell at given prices
hold inventory and sell slightly higher
more risk than broker
brokerage service
securities order to buy a stock
margin credit (loans to help investors buy)
full service that provide research and investment advice
discount broker (simply executes trades on request)
difference market order or limit order
market order is to buy/sell stock att current price
limit order is to buy/sell for maximum/minimum price
venture capital firms
provide start-up funds for companies to establish
don’t trade stock in public
takes seat on board of directors to give advice etc
takes a lot of years to get return
exit when company is managing on its own
private equity buyouts
public companies goes private
buy the public shares
