BUSI 2504 Study Guide - Kolmogorov Space, Underwriting, Net Present Value

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Lo1 the venture capital market and its role in the financing of new, high-risk ventures. Lo2 how securities are sold to the public and the role of investment banks in the process. Lo3 initial public offerings and some of the costs of going public. Lo4 how rights are issued to existing shareholders and how to value those rights. Answers to concepts review and critical thinking questions. 8. (lo2) from the previous question, economies of scale are part of the answer. Beyond this, debt issues are simply easier and less risky to sell from an investment bank"s perspective. However, such offerings are rare, and there may be hidden costs or other factors not yet identified or well understood by researchers. Note: all end of chapter problems were solved using a spreadsheet. Due to space and readability constraints, when these intermediate steps are included in this solutions manual, rounding may appear to have occurred.