Final answer:
Sachit's work in deciding on the sale of new common stock for ABCL Inc. falls under corporate finance within the area of investment banking. This involves activities like initial public offerings and raising capital for firms. Banks act as financial intermediaries, while shareholders select a company's board of directors who choose the management.
Step-by-step explanation:
The activities that Sachit is engaged in pertain to the area of investment banking, which is a sector within the broader field of finance. Specifically, the decision-making about the sale of new common stock by ABCL Inc. falls under the umbrella of corporate finance, which involves the actions companies take to manage their financial resources to achieve their goals. This often includes activities such as raising capital through issuing stocks and bonds, investing in projects, and managing assets. Investment bankers like Sachit assist companies in these transactions, aiding in the process of underwriting new securities, conducting initial public offerings (IPOs), and facilitating mergers and acquisitions.
Banks sometimes act as financial intermediaries in the sense that they take deposits and convert them into various forms of credit like long-term loans, but investment banks specialize in dealing with securities and provide services to firms looking to raise capital. When a company undergoes an IPO or any subsequent public issuance of stock, this event provides vital funds that enable repayment to the early-stage investors and also furnish financial capital to the established company for expansion.
The decisions of a company owned by a large number of shareholders are typically made by a board of directors, chosen by the shareholders through a voting process. The board then hires the company's management, which is tasked with the day-to-day decision-making of the company. If Sachit were advising a small firm that needed to raise financial capital for expansion, he might weigh the options between issuing stock or taking on debt, considering factors such as control of the company, the cost of capital, and financial flexibility.