Profile of a Corporation
Profile of a CorporationThe industry for securities is undoubtedly an exciting and
fast paced industry. This means that brokerage firms such as A.G.
Edwards and Sons must always be watching the stock prices on every
stock in the market so that they can give their clients maximum
profit. When A.G. Edwards and Sons� clients do well then in turn so
does the brokerage firm. A.G. Edwards Inc. is not the biggest
corporations in America, but yet it is still a very large corporation
and has great importance in the industry for which it participates.
This paper will give an in depth explanation about how A.G. Edwards
functions as a corporation.
Along with competition from the government, banks and other
brokerage firms there is also probably the biggest factor involved of
interest rates. Interest rates are indi-rectly proportional to the
activity in the stock market. This means that when the interest rates
fall the market for securities becomes active. This is due to the fact
that people want the highest yield on there money and when interest
rates are low, investing money into a bank would yield less money then
it would have before at a higher interest rate. So people tend to want
to put there money into something that will give them a higher yield
and stocks are just that.
An example of this inversely proportional relationship is
always being demon-strated and was demonstrated in the past few years.
At the end of 1992 to the beginning of 1993 the volume in most
businesses was at record levels obtaining a pre-tax net income for the
whole industry of 9.1 billion dollars setting a new record for the
second year in a row (Hoover�s Company & Industry Database, 1993, p. 1
(Hoover, 1993,p.1)). This trend continued when in the beginning half
of 1993 offerings (new business for the com-pany) exceeded those of
1992 (Hoover,1993, p. 2). Examples of this are as follows; more than
700 billion dollars of debt was issued in 1992 and then in the first
half of 1993 an-other 440 billion dollars of debt was issued (Hoover,
1993, p. 2). More than half of this debt was due to asset-backed debt
such as credit cards and other charges made to credit (Hoover, 1993,
p. 2). These debts were included because the debts were more or less
sold to banks and other money lending institutions who were more
willing to take the risk for the high interest rate.
This drop in interest rates did wonders for the brokerage
firms involved and also corporations that had acquired debt over the
years. The fall of interest rates was great for the brokerage firms
because of the increase in business with the public�s desire to
invest. So the corporations used it to issue off more stock to the
public...
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