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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Investment bankers
Second, conflicts of interest may lead to a biased evaluation process. Deal advisers such as investment banks earn a large proportion of their fees from mergers and acquisitions. Their advice on whether an acquisition makes sense is potentially biased if they do not look after their clients’ interests.
sir with regards to the above statement, i wanted to know if the investment bankers get their fees even if their client does not end up acquiring the target? or is that they get double the fees, if the target is successfully acquired?
essentially what exactly makes the investment bankers biased towards a target company?
What fees they get depends on what has been agreed with their clients.
If they are advising an acquiring company they are likely to have agreed higher fees if the acquisition is successful.