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Funding a Business - an Investment Banker

Autor:   •  November 3, 2011  •  Essay  •  815 Words (4 Pages)  •  1,604 Views

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The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise money by selling shares of the company. Exchange allows investors to quickly sell securities. This is one of the features of investing in stock. The price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. The stock market is considered to be an up-and-coming economy. The stock market is considered to be the main source of the country's economic strength and development. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on the control and behavior of the stock market.

An investment banker is a person representing a financial institution that is in the business of raising money for corporations and municipalities. The importance of an investment banker is the services they provide to the economy and government. They provide advisory services such as mergers for companies. If we didn't have investment bankers, no one would be able to sell or issue and stocks and bonds. Also investment bankers would not have the ability to help private and public companies raise money for different markets.

Financial management is very important or significant because it is related to the funds of a company. Financial management helps managers to make the most accurate decision when it comes to funds. Financial management protects businesses prevent the mismanagement of money. There are several key factors that play a major role in financial management. They

are: Estimation of capital requirements, Determination of capital composition, choice of sources of funds, investment of funds, disposal of surplus, management of cash and financial controls.

Risk Financing is one that is concerned with providing the proper funds to cover the financial effect of unexpected losses. It shows the possibility of a loss or no loss. Financial risk must be managed in order for a company to prosper. Financial risks have several aspects that help play the role, risk avoidance, risk control, risk retention and risk transfer. All of these functions allow a company to decide whether they want to take on the risk or how to control the risk.

As the owner of this business/invention, I chose to fund my business/invention by borrowing money. I chose to borrow

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