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Answer :
Final answer:
Morgan Stanley is acting as an underwriter in the process of IBM selling additional stock and then reselling it to the U.S. public. The underwriter assists in the capital raising process for the company.
Explanation:
When IBM sells additional stock to Morgan Stanley, who then resells it to the U.S. public, Morgan Stanley is acting as an underwriter. In an initial public offering (IPO), a company offers its shares to the public for the first time to raise capital for various purposes such as repaying early investors or expanding operations. After the IPO, the company may issue additional shares in what is known as a secondary offering. Morgan Stanley, in this scenario, facilitates the distribution of these shares to public investors, thus playing a crucial role in the process of capital raising for the company.
A company does not promise a fixed rate of return when it sells stock, as returns are dependent on the company's performance and market conditions. In a company owned by a large number of shareholders, decisions are typically made by a board of directors elected by the shareholders.
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Rewritten by : Barada
Answer:
Asset transformer.
Explanation:
Firstly, asset transformation is explained to be the process which involves asset creation which are from liabilities which posses different attributes combining small businesses etc. Therefore asset transformers are seen to purchase one security from a customer or makes and creates a separate claim in order to raise funds. In as much as it is seen as a risky thing to do; this is because these asset been acquired will be riskier than the deposit used to raise funds because the intermediary hopes to profit on the spread between the rate earned on the asset claim and the rate paid on the liability claim. Therefore this spread form is said to be positive, generally speaking, the asset must be riskier than the liability.
