MGTA01H3 Lecture Notes - Lecture 12: Investment Banking, French Wine, Protectionism

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5 Dec 2018
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When a business is first created, and then grows, it will need: All of this must be paid for . A business must spend money before it can make money. In canada, there is a large industry with many types of business (banks, investment dealers, pensions funds, insurance, leasing businesses, factors, venture capitalists, etc. ) They collect capital from some people, organize/package the capital, then distribute the capital to others. Called intermediaries -> go between/in the middle of the two respective parties. Money that is lent, must be repaid, lender gets no ownership, lender gets interest. Money that is given, never repaid, lender gets ownership, owner gets profit. Banks collect from people with money but no immediate plans ( depositors ) Make loans to people with plans and ideas but no money ( borrowers ) Banks are one (best known) source of capital. Banks provide debt capital (they lend money) Founders can ask family, friends, other investors to buy shares.

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