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Discuss the Intense Competitive Battle Between Commercial and Investment Banks

question 30

Essay

Discuss the intense competitive battle between commercial and investment banks for corporate client business. Why have investment banks and commercial banks sought to step into each other's business?


Definitions:

Dividend

A portion of a company's earnings distributed to shareholders, usually in the form of cash or additional stock.

Constant Growth

A model assuming that dividends or any other type of cash flow grow at a constant rate indefinitely.

Debt/Equity Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity.

Weighted Average Cost Of Capital

The average rate that a company is expected to pay to finance its assets, weighted according to the proportion of equity and debt in its capital structure.

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