financial engineering

financial engineering

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How do we distinguish that a firm is applying financial engineering tools?

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By Steve McQueen
03rd May 2011 15:16

Is this a college...

... or university question? It reads like one. It also reads as if you are not sure of what you are actually asking. Financial engineering is typified by consistantcy. A company which consistantly grows at 20% p.a, with all of its KPI's remaining consistant would be a red flagged potential financial engineer.

In SME's its less likely that in quoted businesses; indeed, reverse financial engineering is more likely as the owner usually wants to reduce the tax bill.

If you are doing some research for your essay a few key businesses to look at would be Slater Walker from the 1970's (the daddy of them all) Hanson from the 1980's, KKR 1980's and 1990's and the whole private equity industry in the 2000's... and I would like a mention in your essay bibliography!

Steve

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