Equity Issuance - Role of Investment Banks

Role of Investment Banks

Investment banks, such as Goldman Sachs or Morgan Stanley are frequently intermediaries in the equity issue process, and for some of these firms the fees associated with IPOs are a substantial part of their income. The role of these banks is to study the characteristics and business plans of the firm which is issuing equity and then recommend a minimum purchase price to investors. On the other hand they are in charge of convincing investors that the purchase is a good opportunity and therefore the success of IPO placement partly hinges on the reputation of the investment bank that is doing it.

Often it is done by joint stock companies to raise money.

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