Financial Management. Evaluation of a company Coursework

Financial Management. Evaluation of a company - Coursework ExampleRights restitution by the companies refers to a corporate invitation to the existing shareholders of the company to buy additional new shares of the company. Cash-strapped companies generally turn to rights issue for raising finance from market for enthronements in business activates. The companies grant shareholders chance to buy new shares at a discount rate than current market of share on a pre mentioned proximo date. Investment banks do this activity for business for some percentage of banking percentage on total amount of issued fund. By issuing share, the companies give opportunity to the shareholders to growing their financial exposure by purchasing companies stocks at a discounted price. Investment banks conduct the necessary legal activities to issue new shares on behalf of the companies by taking banking fees. The cigaret trade the issued rights on market in similar way they trade ordinary shares throug h stock exchange until the new shares are bought screen by the companies. Theoretically, some traditional and efficient methods are used to evaluate big(p) letter investment in domestic as well as appear foreign markets by businesses. But, capital investment is grittyly risk associated strategic business activity and the company needs to focus beyond the traditional methods of evaluating capital investments like net present value, internal rate of return, payback period etc. Emerging financial businesses like investment banking and financial research companies offers flawless capital investment solutions to many track multinational organizations and they follow several advanced methodologies for evaluating proposed capital investment practices by the MNCs especially in emerging markets. The important objective to use beyond the traditional methods is to pare future risk i.e. these methods helps to identify the maximum extent of risk possibilities and provide alternative solu tion to reduce the possible risk in substantial extent. One of the efficient methodologies for evaluating capital investment is Salomon-Smith-Barney Model. This methodology is widespread and efficient method used by leading investment banks to evaluate capital investments especially in the emerging markets for reducing risk of investment. This is one of the most recent developed methodologies for international capital investment and it was developed in 2002 by Zenner and Akaydin for leading US investment bank Salomon Smith Barney (Anson, 2011, p.488). This model is risk adjusted and limited extension of G-CAPM approach of capital valuation. In this methodology, different global factors and are considered with a high importance and regional factors are recommended as useless due to market inefficiency. This model in the main focuses on how risk possible risk can be identified in maximum extent and how it can be minimized. As this methodology is modified extension of G-CAPM approach, therefore, it has focused on key shortcomings of the approach. Having a main objective to reduce risk of foreign investment especially in emerging miserliness perspective, this methodology has focused on a key fact that emerging markets are not totally harbor specific and integrated restraint and complications which can justify a risk premium. The developer of this methodology added an idiosyncratic risk premium into the G-CAPM approach and extended that approach in a new form with high capability of risk indication and reduction. This methodology has