Chapter 15 Investment Banking: Public and Private Placement.

Slides:

Advertisements

Similar presentations

CHAPTER 19 INVESTMENT BANKING.

Advertisements

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Raising Capital Chapter 15.

4-1 Business Finance (MGT 232) Lecture Business Finance Introduction Introduction (Financial Environment)

Chapter 14 - Raising Capital in the Financial Markets.

Chapter McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. Investment Banking Public and Private Placement 15.

Investment Banking Public and Private Placement

© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Project Analysis and Evaluation Chapter Eleven.

McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Securities Markets CHAPTER 3.

© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Financial Leverage and Capital Structure Policy Chapter Seventeen.

© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Raising Capital Chapter Sixteen.

An Overview of Financial Markets and Institutions

© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Options and Corporate Finance Chapter Fourteen.

© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Introduction to Valuation: The Time Value of Money Chapter Five.

Chapter 14 & 15 Capital Markets and Investment Underwriting.

© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Net Present Value and Other Investment Criteria Chapter Nine.

© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Interest Rates and Bond Valuation Chapter Seven.

How corporations issue securities

Contemporary Investments: Chapter 5 Chapter 5 ORGANIZATION OF THE FINANCIAL MARKETS What are the different types of financial markets? How do the primary.

© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Return, Risk, and the Security Market Line Chapter Thirteen.

1 Chapter 18 Issuing Capital and the Investment Banking Process McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin ©2001 The McGraw-Hill Companies All Rights Reserved 15.0 Chapter 15 Raising Capital.

Key Concepts and Skills

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 0 Chapter 15 Raising Capital.

The McGraw-Hill Companies, Inc., 2000

Ch Rising Capital in The Financial Markets  2002, Prentice Hall, Inc.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Raising Capital Chapter 15.

Slide 21–1. Chapter Twenty One Investment Banks, Brokerage Firms, and Mutual Funds.

Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Sources of Funds to U.S. Corporations Retained Earnings Debt – bank loans, bonds, etc. Stock – common, preferred. Other.

Chapter The Stock Market McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. 5.

Chapter 15 How Corporations Issue Securities

©2007, The McGraw-Hill Companies, All Rights Reserved Chapter One Introduction.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill /Irwin Chapter One Introduction.

McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Securities Markets CHAPTER 3.

McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 3 How Securities Are Traded.

Financial Markets and the Investment Banking Process Chapter 3 Requests for permission to make copies of any part of the work should be mailed to: Thomson/South-Western.

  1. Can you drive on the left side of the road with your car?  2. Can you use your clothes to tie up a student and lock him or her in a locker? 

Chapter 15 Principles PrinciplesofCorporateFinance Tenth Edition How Corporations Issue Securities Slides by Matthew Will Copyright © 2010 by The McGraw-Hill.

How Corporations Issue Securities

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 1.0 Introduction to Financial Management Chapter 1.

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 3 Financial Instruments, Financial Markets, and Financial.

©2012 McGraw-Hill Ryerson Limited 1 of 20 Learning Objectives 4.Analyze the dealer’s role in pricing corporate securities. Evaluate the influence of issued.

 An Overview of Corporate Financing Principles of Corporate Finance Brealey and Myers Sixth Edition Slides by Matthew Will Chapter 14 © The McGraw-Hill.

The Financial Markets and the Investment Banking Process

Study Unit 7 Raising Capital, Corporate Restructuring, and International Finance.

ALOMAR_212_31 Chapter 2 The Financial System. ALOMAR_212_32 Intermediaries, instruments, and regulations. Financial markets: bond and stock markets Financial.

CHAPTER 19 INVESTMENT BANKING. Investment Banking Investment Banks (IB) are the most important participant in the direct financial markets Assist firms.

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 3-1 How Securities Are Traded Chapter 3.

Chapter 3 How Securities are Traded. McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Primary vs. Secondary Security Sales.

McGraw-Hill/Irwin Corporate Finance, 7/e Eighth Edition.

15- 1 McGraw Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved Fundamentals of Corporate Finance Sixth Edition Richard.

1. 2 Learning Outcomes Chapter 3 Describe the role that financial markets play in improving the standard of living in an economy. Describe how various.

Chapter 14 Fundamentals of Corporate Finance Fifth Edition Slides by Matthew Will McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc.

Chapter McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. Investment Banking Public and Private Placement 15.

©2012 McGraw-Hill Ryerson Limited 1 of 20 Learning Objectives 4.Analyze the dealer’s role in pricing corporate securities. Evaluate the influence of issued.

Securities Markets Chapter 3 Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.

Chapter 1 Investments - Background and Issues McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Investments & Financial.

© The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw Hill Topics Covered  Venture Capital  The Initial Public Offering  The Underwriters  General.

How Corporations Issue Securities Financial Institutions Student Presentations Venture Capital Initial Public Offering Other New Issue Procedures Subsequent.

BUS 353 Part I: Understanding Capital Markets. A. Capital 1.Capital is defined as wealth, generally money or property 2.Capital Providers – people and.

Chapter 3 How Securities are Traded. McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Primary vs. Secondary Security Sales.

Investment and portfolio management MGT 531.  The course assumes little prior applied knowledge in the area of finance.  References  Kristina (2010)

©2009 McGraw-Hill Ryerson Limited 1 of Investment Underwriting Prepared by: Michel Paquet SAIT Polytechnic ©2009 McGraw-Hill Ryerson Limited.

Chapter 2 Fundamentals of Corporate Finance Fifth Edition Slides by Matthew Will McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc.

Chapter 14 Fundamentals of Corporate Finance Fifth Edition Slides by Matthew Will McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc.

Securities Markets. Two Types Primary Market: where first-hand securities are traded or a market of new issuance of securities. Secondary Market: Where.

How Corporations Issue Securities

Chapter 13 How companies raise capital

Presentation transcript:

Chapter 15 Investment Banking: Public and Private Placement

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. PPT 15-1 FIGURE 15-1 Distribution process in investment banking

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. PPT 15-2 FIGURE 15-2 Allocation of underwriting spread

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. PPT 15-4 FIGURE 15-4 Internet Capital Group common stock price (as of May 6, 2003)

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 15 - Outline LT 15-1 What is Investment Banking? Functions of the Investment Banker Underwriting Spread Public vs. Private Companies Advantages and Disadvantages of a Public Company Initial Public Offering and Leveraged Buyout

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. What is Investment Banking? LT 15-2 Investment Banking deals with primary offerings of new securities The Investment Banker serves as the intermediary or link between the corporation and the investor Brings the two parties together by channeling money from one to the other

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Functions of the Investment Banker LT 15-3 Underwriter: –buying the security and reselling it to the public – the risk-taking function Market Maker: – ensuring an available market by buying and selling the security Advisor: – providing advice on the issue Agency Functions : – negotiating the best possible deal for the corporation

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Underwriting Spread LT 15-4 Spread represents the compensation for those participating in the distribution Spread = Public Price - Issue Price It is shared by all the participants Spread on common stocks is greater than the spread on bonds

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Public vs. Private Companies LT 15-5 Public company: – when shares of a company are offered to the public – anyone can buy shares of the stock Private company: – privately owned or held by an individual or family – not available to the general public

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Advantages and Disadvantages of a Public Company LT 15-6 Advantages of being public: – greater availability of funds (easier to grow and raise money) – prestige Disadvantages of being public: – company information must be made available to the public (opening the company up to public scrutiny and criticism) – high costs of going public (expensive)

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Initial Public Offering and Leveraged Buyout LT 15-7 Initial Public Offering (IPO): – when a company sells its stock to the public for the first time – the company becomes publicly traded Leveraged Buyout (LBO): – money is borrowed to repurchase all the shares of the company resulting in a great deal of debt – when a company “goes private”