Introduction to corporate finance - Financial Markets and the Cooperation

5 important questions on Introduction to corporate finance - Financial Markets and the Cooperation

What is a financial market?

is just a way of bringing buyers and sellers together. In financial markets, it is debt and equity securities that are bought and sold. Furthermore, financial markets function as both primary and secondary markets

From a fiancial market what is a primary market?

Transaction the corporation is the seller, and the transaction raises money for the corporation.

2 types of primary market transactions:
1. public offerings and private placements. A public offering, as the name suggests, involves selling securities to the general public.
2. private placement is a negotiated sale involving a specific buyer.

From financial market what is Secondaty markets?

A secondary market transaction involves one owner or creditor selling to another. Therefore the secondary markets provide the means for transferring ownership of corporate securities.
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What are the two kind of secondary markets?

1. Auction markets:  to match those who wish to sell with
those who wish to buy. Dealers play a limited role.

differs from dealer market in 2 ways: 1st has a physical location + 2nd most of the buying and selling is done by the dealer.

2. Dealer markets:
buy and sell for themselves, at their own risk (buys and sells automobiles). Long-term is called over-the-counter (OTC) markets

What is the trading in Corporate Securities?

The equity shares of most large firms trade in organized auction markets.

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