Please do your best to help me solve this. QUESTION 1 Case Study (Preamble) Adusa Company has been in business for man

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answerhappygod
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Please do your best to help me solve this. QUESTION 1 Case Study (Preamble) Adusa Company has been in business for man

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Please do your best to help me solve this.
QUESTION 1

Case Study (Preamble)

Adusa Company has been in business for many years. The company is hoping to obtain financing

for its upcoming project and wishes to hold on to this money for as long as the business exists, not

as a loan though. In considering the options available and as first-timers on the financial markets,

they were advised by Urata Investment Bank Ltd, who took charge of the processing for the

attainment of the finance. With a consistent dividend payment and a good share price on the

market, Adusa finds itself among the top-ranked on the local stock market.

After 6 years of experiencing the organized market as a public company, Adusa Company is back

on the market to raise additional financing to boost operations on the Olumba road construction, a

contract they won due to links with the government and the fact that they could pre-finance

projects, but this time, it is looking for an institutional investor (since there is none in their existing

shareholder(s) profile) to subscribe to the equity capital they intend to raise.

Kwame and Jojo are co-workers with Adusa company and have been saving part of their salaries

in their bank accounts. It is becoming difficult to prevent themselves from spending these savings,

so they are thinking of trading on financial markets. Jojo is risk-averse and not too comfortable

with the price volatility of the stock market(s). Kwame loves risk and is looking forward to

challenging himself for higher yield. The stock market is open with diverse options and these

friends are game to trade.
Use the above case study to answer the questions below;

a) What unit of money supply is Adusa Company representing?

b) As the head of the investment banking unit of Urata Bank, explain in detail to Adusa

Company the equity offering available to augment their financing.

c) Which market would be appropriate for Adusa Company in this offer?

d) Outline any three(3) functions performed by institutions in the category of Urata

Investment Bank in the financial market

e) What is the appropriate means for Adusa Company in their second attempt at raising

equity financing considering the fact that they wanted an institutional buyer?

f) Explain this mode or means of raising equity capital

g) Which type of financial instrument would be appropriate for Jojo?

h) Which type of financial instrument would be appropriate for Kwame?
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