The different types of capital instruments that constitute an investment portfolio have also been described. Lastly, recommendations have been provided regarding the selection of assets for the construction of an effective and efficient portfolio. Investment Banking Process for an IPO Initial Public Offering (IPO) refers to the process of issuing shares by a company to the public for the first time in its history. It is mainly done to raise capital or funds in the form of share capital to be utilized by the company in its business processes. An IPO process typically consists of three key steps. They are: a) Preparation; b) Market approaching strategies; and c) Going public. Investment bankers are selected by the company for the purpose of coordinating the whole process of IPO. Hence, investment bankers form an important part of the IPO process and perform various functions during the whole process. The investment bankers give valuable advice to the company regarding how to go about the whole process of IPO. The underwriting functions related to the IPO are also performed by the investment bankers. ...
The investment bankers are mainly selected by the companies because of their expertise in the field of obtaining the best selling price of the shares to be issued by the companies (O'Rourke, 2007, p. 209). Hence, investment bankers are found to have three tasks to be performed by then in case of IPOs. They are: a) Given the existing conditions in the market, the investment bankers help the companies to design the securities of the companies to be offered by them in a way that are most attractive to the public; b) The investment bankers buy those securities from the companies; and c) They resell those securities to the investors or the public (Besley & Brigham, 2008, p. 83). Asset Class Selection for an Investment Portfolio Portfolio of an investor consists of combination of assets or asset classes. An asset class can be defined as a combination of different types of securities such as shares, bonds, mutual funds, etc. which, taken together, serve the purpose of providing specific contribution to the portfolio of the investors. Such contributions are in the form of risks associated with the securities chosen, the return generated from the assets and covariance of return that exists between other classes of assets. The diversification of assets included in a portfolio can be achieved at two levels. One is while choosing a large number of assets and the other one is while choosing different types of asset classes to form the portfolio. Various factors are needed to be considered while selecting asset classes to form an investment portfolio. They are: a) Expected return of the portfolio; b) Diversification benefits; c) Required scale of investment; and d) Liquidity. The returns that are expected from the asset
CAPITAL MARKETS AND INVESTMENT BANKING PROCESS Table of Contents Table of Contents 2 Investment Banking Process for an IPO 3 Asset Class Selection for an Investment Portfolio 4 Capital Market Instruments Used in Portfolio Construction 5 Conclusion and Recommendations 6 References 7 Investment banking plays a vital role in today’s economy…
The author states that investment banker’s services are acquired when a company needs to raise funds in the financial markets usually through the issuance of new securities. Investment banks usually perform three tasks: first, they assist the companies in designing the securities which have features that are most appropriate for a certain market.
Johnson Control Systems is a multinational diversified technology company which operates three diversified areas of business like building efficiency, automotive experience business and power solution business. The company has active business operation in more than 150 countries across the world.
Quality assurance is the main pillar of any business including profit and nonprofit organizations, government and nongovernmental organizations as it affects the level of success in the business. The assurance of quality in service sector brings the customer back to make use of the services and recommend the same to others which means increased rate of profit.
Economic development involves the improvement in the standards of living also referred to as economic wealth of a certain city, country or region to create a better habitat for its citizens. It involves the movement of the country's economy from a low-income economy to a modern day, high income economy, (Heyn, 1981).
An organization, typically a banking organization, which specializes in imparting such services, is termed as carrying on investment banking. While an entire entity may be devoted to investment banking, hallmarked by bulk banking, it is not unusual to observe investment banking arms within umbrella banking setup.
This is usually done by taking out such a debt security as a loan, popularly confirmed by a note in addition to offering security to the lender. The most common form of a corporate debt security is referred to as a bond; which
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