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Key Data Regarding Financial Management

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1. What is investment banking?
2. How would the investment banker assist an organization in going public?
3. As a CFO, what information would you need to select an investment banker?
4. What is the difference between operating and financial leverage? What are the risks of having an excessive amount of financial leverage in an organization? What is the degree of total leverage?

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Solution Summary

This solution defines financial terms, different investment banking services, and business leverage in 810 words with four APA references and in text citations.

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Financial terms

1. Investment banking is a financial term. It relates the people have large amount on money with the people who are required the funds for the investment. It helps different companies in acquiring funds and also assists the investors in evaluating the risks and knowledge about economic conditions that provides them advanced ways to convert the funds into higher capital. The investment banking helps the business institution in yielding more funds by two ways. The first way is to draw on public funds by the way of capital market via selling stock in their company and the second way is to seeking out venture capital in the replacement for interest in their company.

2. Investment banker assist the organization in going public by acting as a contact in joining parties who have excess money in the form of saving, with those who required the funds for the investment purpose. Investment banker plays key role for the organization by selling its stock and bonds to the general public. When any company wants to raise additional funds for the expansion, then only the investment banker help the company through buying the issue (stock or bonds) at wholesale price and then approaches and sells it to the investors at retail price. Investor banker assists those organizations which are not specializing in the filed of the contacts, by purchasing securities from the organizations and selling them to the investors at a very low rate. (Van Horne, Wachowicz & ...

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  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
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