What considerations might be important in the selection

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You are the president and chief executive officer of a family owned manufacturing firm with assets of $45 million. The company articles of incorporation and state laws place no restrictions on the sale of stock to outsiders. An unexpected opportunity to expand arises that will require an additional investment of $14 million. A commitment must be made quickly if this opportunity is to be taken. Existing stockholders are not in a position to provide the additional investment. You wish to maintain family control of the firm regard- less of which form of financing you might undertake. As a first step, you decide to contact an investment banking firm.

a. What considerations might be important in the selection of an investment banking firm?

b. A member of your board has asked if you have considered competitive bids for the distribution of your securities compared with a negotiated contract with a particular firm. What factors are involved in this decision?

c. Assuming that you have decided upon a negotiated contract, what are the first questions that you would asked. As the investment banker, what would be your first actions before offering advice?

Reference no: EM13286914

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