Investment Banking For Dummies

Wrap your head around the complicated world of investment banking with this understandable and comprehensive resource

The celebrated authors of Investment Banking For Dummies, 2nd Edition have updated and modernized their best-selling book to bring readers an invaluable and accessible volume about the investment banking industry.

Written in the straightforward and approachable tone the For Dummies series is known for the world over, authors Matthew Krantz and Robert Johnson have created an indispensable resource for students and professionals new to investment banking.

The book covers all the crucial topics required to understand the fundamentals of the industry, including:

• Strategies for different types of risk management: market, credit, operating, reputation, legal, and funding

• The key investment banking operations: venture capital, buyouts, M&A, equity underwriting, debt, and more

• The relationship between leverages buyout funds, hedge funds, and corporate and institutional clients

Investment Banking For Dummies, 2nd Edition offers, for the first time, a brand-new chapter devoted to cryptocurrencies, and new content on "unicorn" IPOs, including Uber, Lyft, and Airbnb.

Autorentext

Matt Krantz is the personal finance and management editor at Investor's Business Daily. Matt's recent books include Online Investing For Dummies and Fundamental Analysis For Dummies.

Robert R. Johnson, PhD, CFA, CAIA, is a Professor of Finance at Creighton University, where he teaches in the Master of Security Analysis and Portfolio Management Program.

Klappentext

• Get started in investment banking
• Ace your investment bank course

• Navigate bull and bear markets
  Excel in the world of investment banking One of the most lucrative fields in business, investment banking frequently perplexes even banking professionals working within its complex laws. Investment Banking For Dummies remedies common misconceptions with a straightforward assessment of banking fundamentals. This book tracks to typical university courses on the subject and helps students and professionals understand the fundamentals of investment banking. With new and updated content, this edition addresses the major financial changes that have occurred in recent years. Inside...

• Key investment banking operations
• Strategies for risk management
• Advice on cryptocurrencies
• Updated IPO coverage
• Discounted cash flow analysis
• Mergers and acquisitions
• Structuring a leveraged buyout
• Resources for investment bankers

Inhalt
Introduction 1

About This Book 1

Foolish Assumptions 3

Icons Used in This Book 3

Beyond the Book 4

Where to Go from Here 4

Part 1: Getting Started with Investment Banking 5

Chapter 1: Introducing Investment Banking 7

What Investment Banking is 8

The role investment banking plays 8

How investment banking differs from traditional banking 10

The services investment banks provide 11

How investment banks are organized 12

The current lay of the investment banking land 14

Types of investment banking operations 15

How investment banks get paid 15

How Investment Banking is Done 17

Finding the financial statements 18

Understanding the importance of financial statements and ratios 18

Zeroing in on past transactions 18

Seeing the value of fixed income 19

Turning Into an Investment Banking Pro 19

Putting the discounted cash flow analysis to work 19

Seeing how leverage becomes a force in investment banking 20

Pinpointing buyout targets 20

Putting Investment Banking to Work 21

Staying in compliance with the rules 21

Looking beyond the published financial statements 21

Making adjustments to financial statements for comparability 22

Chapter 2: The Purpose of Investment Banking: What Investment Bankers Do 23

Putting the For-Sale Sign on Corporate America 24

Mergers and acquisitions 25

Leveraged buyouts 27

Private business sales 29

Initial public offerings 32

Helping Investors Decide Whether to Buy or Sell 36

The importance of research 36

What do the analysts do? 37

Digging Into the Role of the Trading Desk 38

Why investment banks are into trading 39

How investment banks turn pennies into billions 40

The type of analysis used in trading operations 40

Chapter 3: How Investment Bankers Sell Companies 43

Getting Companies Ready for Sale on Public Markets 44

Meeting the requirements to make an IPO happen 45

Writing the prospectus 47

Supporting the IPO: Making success last 51

Seeing What Sell-Side Analysts Do 53

The goals of the sell-side analyst 54

What investors look to sell-side analysts for 55

Spreading the word: Disseminating sell-side research 55

Examining a Sample Research Report 57

What to look for in the document 57

The main sections of a research report 58

Ways to look beyond the buy or sell 59

Chapter 4: How Investment Banking is Used in Mergers and Acquisitions 61

Come Here Often? The Basics of Mergers and Acquisitions 62

Kinds of mergers 62

Why companies merge instead of simply growing organically 63

Firms that make attractive acquisition targets 66

How companies identify firms to merge with 67

The nature of the merger: Friendly or hostile? 68

Tools Used to Analyze the M&A Deal 70

The role of the buy-side M&A advisor 70

The role of the sell-side M&A advisor 75

Why Many M&A Deals Go Wrong 76

Misplaced incentives 76

Faulty analysis 77

Overstated synergies 78

Culture wars 78

The winner's curse: Overpaying 78

Chapter 5: How Investment Banking is Used in Leveraged Buyouts 81

In This Corner: Introducing the Players 82

Investment banks 83

Big institutions 84

Management 85

Stock and bond investors 86

Aiming for the Right Targets in a Leveraged Buyout 87

Identifying companies that can work in a leveraged buyout 88

Appreciating the power of cash flow 89 Coming to ...