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who are underwriters? what is their work?

Answers were Sorted based on User's Feedback



who are underwriters? what is their work?..

Answer / chaitanya

A company or other entity that administers the public
issuance and distribution of securities from a corporation
or other issuing body. An underwriter works closely with
the issuing body to determine the offering price of the
securities, buys them from the issuer and sells them to
investors via the underwriter's distribution network.
(Or)

Underwriters generally receive underwriting fees from their
issuing clients, but they also usually earn profits when
selling the underwritten shares to investors. However,
underwriters assume the responsibility of distributing a
securities issue to the public. If they can't sell all of
the securities at the specified offering price, they may be
forced to sell the securities for less than they paid for
them, or retain the securities themselves.

Is This Answer Correct ?    40 Yes 5 No

who are underwriters? what is their work?..

Answer / dpk

Underwriters are usually the issuing house or merchant bank
or large investment banking firms i.e. financial
institutions such as insurance companies and pension funds
who either issue share and take risk of buyng share. Their
key functions in an IPO are:
* Providing advice (pricing and timing)
* Buying issue from the company (risk taking)and
* Selling the issue to the public

Is This Answer Correct ?    7 Yes 0 No

who are underwriters? what is their work?..

Answer / k. pullarao

Underwriter is someone who takes financial risk in return
for fee on behalf of the issuer. And their work is rasising
capital from the investors/public to the corporates or
government institutions.

Is This Answer Correct ?    8 Yes 5 No

who are underwriters? what is their work?..

Answer / ashish

underwriter is the person who take the share of company for
sale it.they take charge 4 that.
if they could nt sale the taken shares at this condition
they hv to purchase that shares and pay price to company.
we can also say that they give gurantee of selling of shares
ashish.miba@gmail.com










2

Is This Answer Correct ?    5 Yes 3 No

who are underwriters? what is their work?..

Answer / manju

Underwriters are mainly financial institutions which
promises to purchase a particular company's shares if they
are not sold in particular time.

Is This Answer Correct ?    6 Yes 6 No

who are underwriters? what is their work?..

Answer / nitin pandey, bajaj allianz

Underwriter is the person who take risk on behalf of the
institution, simply his profile is to 'assess the quality &
serve the quantity".
Underwriter bridges the gap between customer & company.
Generally, in Insurance & Mortgage industry such pofile
holder are known as 'Underwriter" while in Finance &
banking sectors they are called as "Credit Analyst'.
They direct plays with the profit figures of company,
without underwriting a company 100% introduced with losess,
claims, default, forges & counterfeit.

Is This Answer Correct ?    5 Yes 5 No

who are underwriters? what is their work?..

Answer / mazhar

A set all institution and agencies that provides a commitment to take up issue of securities in the events of a failure of the issue to get full subscription from the public, are known as 'underwriters'.

Is This Answer Correct ?    0 Yes 1 No

who are underwriters? what is their work?..

Answer / nandita reddy

A financial institution which, in return for a fee or
commission, agrees to purchase unsold shares in a new
issue, if the issue is not fully subscribed.

Is This Answer Correct ?    11 Yes 13 No

who are underwriters? what is their work?..

Answer / gf

underwriters are mad guys

Is This Answer Correct ?    8 Yes 59 No

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Read the case given below and answer the questions given at the end. Krutika Designers Ltd is an Indian company engaged in designing shirts for an international shirt manufacturer. Its operations are currently restricted to designing shirts for the Indian market. The firm is interested in extending its operations to the European markets, but is restricted by its lack of knowledge about the latest fashions and trends prevailing there. Hence, the firm has decided to open an office in Finland for establishing a network in Europe that will give the firm access to the needed information. The firm feels that its does not have the capability of sustaining itself in the foreign markets in the long-term, and will be able to generate additional revenue from these activities only for the next 5 years. After that, the Finnish office will have to be closed down. The firm anticipates an initial investment of Rs.14 million. The project is expected to generate the following cash flows over the 5 years period. Year Cash flow (Finnish Marks) 1 2 3 4 5 10,00,000 20,00,000 50,00,000 50,00,000 30,00,000 These cash flows are expressed in terms of today’s money. The firm can claim depreciation in India according to the Straight Line Method. The salvage value from the project is expected to be nil. The Finnish Government does not provide any incentives for foreign investments. However, currently it is making an attempt to have better economic ties with India. Hence, it has decided to extend a loan of 50,000 marks to Krutika Designers. The loan will be at a concessional interest rate of 7%. The loan is to be repaid in 5 equal annual installments which will include the interest payments. The project will generate additional borrowing capacity of Rs.5 million for the firm. However, as the firm does not have any firm contract with the international shirt manufacturer, its domestic revenues are expected to be very volatile. Therefore, there is no surely that the firm will be able to absorb the tax benefits arising out of depreciation and additional borrowing capacity. The firm does not intend to indulge in any illegal money transfers. The current spot rate for the Finnish Mark is Rs.7.25/FM. The inflation rates in India and Finland for the next 5 years are expected to be 8% and 3% respectively. The exchange rate is expected to move in tandem with the inflation rates. Indian tax rate is 35% while Finnish tax rate is 40%. India and Finland have entered into a tax treaty whereby the earnings of the residents of one country are taxable in that country only. In India, the nominal risk-free interest rate is 11%. The same is 6% in Finland. The Indian nominal interest rate (including risk-premium) is 15%, while that in Finland is 9%. The nominal all-equity rate in India is 18%. 1. Comment on the financial viability of the project. 2. What are the different circumstances in which nominal all-equity discount rate and real all equity discount rate should be used for discounting the cash flows? Explain the rationale behind it. 3. Comment on the financial viability of the project if the firm is sure about being able to absorb the tax benefits arising out of depreciation and increased borrowing capacity. 4. Explain the concept of exchange risk and how it affects an international project. 5. How can the financial structure of a project be used to overcome repatriation restrictions? What are the additional benefits of such maneuvers?

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