Unit 9 Investment
Nothing ventured, nothing gained.
Most business ventures start as investments by entrepreneurs hope to make financial gains or returns on investment. Money for a new business may come from banks, venture capitalists. As business grows they invest in their own projects in order to increase profit and dividends for shareholders.
The one type of risky investment is IPO. An initial public offering referred to simply as an offering or flotation is when a company issued common stock or share to the public for the first time. For the individual investor, it is tough to predict what the stock or shares will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, and they are therefore subject to additional uncertainly regarding their future value.
Another risky investment is buying fine art as an investment. It may be a good opportunity for diversification, but it is highly unlikely that they are making more money. Art is frequently overvalued and the industry is infamous for assessing value inaccurately.
“Nothing venture, nothing have,” means that we cannot expect large profits, unless we are willing to run the risk of losing something. But, although we cannot expect great profits without the risk of loss, it does not follow that it is reasonable to risk our money in questionable investments.
Unit 10 Energy
Renewable energy world
All businesses depend directly on the energy sector, which is the largest single market in the world. Some energy companies trade in fossil fuels while others supply electricity or fuel to end users. As petroleum reserves become scarcer this drives up oil prices and encourages companies and governments to develop alternative or renewable energies.
There are two different categories of energy resources: non-renewable and renewable.
Renewable energies depend on natural forces like sunlight, which are unlimited and the same quantity of energy will always be there of the earth:
Geothermal energy uses heat that is under the surface of the earth;
Tidal energy uses gravitational effect of the earth
Solar energy
Wind energy
Nuclear energy
Wave energy
Alternative energy has a very important role to play in the future because it uses abundant sources. But it is impossible to use only renewable energies because power generation from alternative sources is still very expensive.
Unit 11 Going public
Going public: pros and cons
An Initial public offering takes place when a private company raises capital by introducing its shares on the stock market and becomes a public limited company. Before a private company go public it must comply with the requirements of the regulators of the stock exchange and file an application giving full details of its accounts.
Benefits of being public company:
Diversify equity base
Enable cheaper access to capital
Attract and retain the best management and employees
Facilitate acquisitions
Prestige
Advantages of going public:
More people will be aware of the company’s existence
The company can obtain finance without having to repay a debt
Employees can exercise stock options
Capital will be available for expansion
Disadvantages:
Management will face pressure to produce positive quarterly results
Outsiders may impose their views on management
The value of the business may suddenly fluctuate
The company will be obliged to disclose financial information