Not new of course – since February 2007, Bank of America Corporation has tri
ed to portray an image of ‘taking opportunities’ to its customers and budding customers. The company took the right step when credit lender Countrywide Financial Corporation was short of cash. The CEO of Bank of America, Kenneth Lewis put his hands in the situation. He injected $2 billion into the largest US mortgage lender, taking shares that tossed off a 7.25% dividend and are convertible into common stock at a 17.5% discount. The investment created an instant paper gain and amounts to a risky but potentially rewarding gamble. A bet which rests on the fact that Countrywide Financial Corporation can survive the housing slouch and flourish after it ends.
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ed to portray an image of ‘taking opportunities’ to its customers and budding customers. The company took the right step when credit lender Countrywide Financial Corporation was short of cash. The CEO of Bank of America, Kenneth Lewis put his hands in the situation. He injected $2 billion into the largest US mortgage lender, taking shares that tossed off a 7.25% dividend and are convertible into common stock at a 17.5% discount. The investment created an instant paper gain and amounts to a risky but potentially rewarding gamble. A bet which rests on the fact that Countrywide Financial Corporation can survive the housing slouch and flourish after it ends.For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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