What is the difference between a principle agent problem and moral hazard?

July 7, 2024 No Comments

A: Principal-agent problems and moral hazards are related in that one gives rise to the other. Principal-agent problems occur when the principal of an entity hires on a company or individual employee to complete designated tasks that have a tendency to solely benefit the principal

What is the difference between an IPO and a seasoned issue?

July 7, 2024 No Comments

A: When a privately owned organization decides to raise capital by offering shares of stock or debt securities to the public for the first time, it conducts an initial public offering (IPO), at which point it becomes a publicly traded company. When an existing publicly

What are restricted shares?

July 7, 2024 No Comments

A: Restricted shares refer to shares of stock whose sale or acquisition is subject to specific restrictions laid out by the issuing company and agreed upon by the eventual owner of the restricted shares. This means that the restricted shares issued by a company are

What are the top trends in corporate social responsibility?

July 7, 2024 No Comments

A: As pressure is added by consumers seeking to make more responsible choices and by the constraints of ever-dwindling natural resources, more companies are incorporating sustainable strategies and adopting more socially responsible practices. The top trends in the area of corporate social responsibility include increased

What do real estate attorneys do?

July 7, 2024 No Comments

A: Real estate attorneys are professionals who specialize in, and apply their legal skills to, matters related to property, from everyday transactions to disputes. A real estate attorney is equipped to prepare and review documents relating to real estate such as purchase agreements, mortgage documents,

What does the de Minimis clause for investment advisers mean?

July 7, 2024 No Comments

A: A. An investment adviser must register with the state if it holds less than $25 million in assets. B. An investment adviser must register with the state if it holds less than $30 million in assets. C. An investment adviser must register with individual

What does the term “stock-for-stock” mean?

July 7, 2024 No Comments

A: The term “stock-for-stock” is popularly used in two different contexts, and it regularly makes business news headlines in both. “Stock-for-stock” most commonly appears in headlines in reference to the stock-for-stock merger. In this type of merger, the acquiring company trades shareholders of the target

Human capital vs. physical capital: What is the difference?

July 7, 2024 No Comments

A: Capital is the lifeblood of a corporation. It allows a business to maintain liquidity while growing operations. Generally, capital is used to refer to physical assets in business. It is also used to refer to the means in which companies obtain physical assets. What

Investment Banking vs Private Equity

July 7, 2024 No Comments

A: Private equity and investment banking both raise capital for investing purposes, but they do so in very different ways. Both private equity and investment banking aim toward the same goal, but from opposite directions. Private equity firms collect high-net-worth funds and look for investments in other

Licenses for hedge fund manager

July 7, 2024 No Comments

A: A hedge fund manager does not necessarily need any specific license to operate the hedge fund. But depending on the type of investments the fund makes, he may find it necessary or at least helpful to obtain certain licenses. The legal requirements of the

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