... aspects of the firms risk in order to maintain a balance of risk and return that is consistent with share-price maximization. Businesses raise money to support investment and other activities in one of two ways, either externally from investors or creditors, or internally by retention and reinvestment ... can raise capital either by selling an ownership interest which is equity, usually in the form of common or preferred stock, or by borrowing money (debt) from one or more creditors. When corporations are small and young, they usually must raise equity capital privately, either from acqu...

• Word Count: 1383
• Approx Pages: 6
• Grade Level: Graduate

... most profitable and ultimately most efficient use. When loan demand exceeds deposit growth, a financial institution is forced to consider several options such as raising deposits, sell or syndicate assets, borrow money from another lender, or securitize assets more commonly referred to as asset securitization. Since its development in the late 1980s, asset securitization has become the most desired option for building ... are expected to place concentration limits on retained interests relative to equity capital. Unfortunately, there have been a number of failures of securitized assets,...

• Word Count: 2087
• Approx Pages: 8
• Grade Level: Undergraduate