Question 1. What is stock flipping? Do investment banks encourage this kind of practice among their clients? Explain.
Question 2. What are American Depositary Receipts (ADR's) and why have they proven so popular with U.S. investors?
Question 3. What is a debenture? Why do you think that this is the most common form of corporate bond in the United States? Is it is much less commonly used elsewhere?
Question 4. What are the key advantages of leasing as compared to borrowing to acquire an asset? What are the key disadvantages of leasing?
Question 5. Rights offerings are seldom used in the U.S. to raise equity capital, but they are often used in Europe. How might you explain that fact?
Question 6. If you were an investment banker, how would you determine the offering price of an IPO?
Question 7. Why are most bonds callable? Who benefits from this feature, and what is the cost of adopting a call provision in a public bond issue?
Question 8. What elements must be included in a lease in order for it to be considered a financial (capital) lease?
How do you explain the highly politicized nature of share issue privatization (SIP) pricing and share allocation policies? Are governments maximizing offering proceeds, or are they pursuing primary political and economic objectives?