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The purpose of this article is to describe the important role of investment banking firms in the capital market and their possible role in the econmic development of Iran. Unfortunately, investment banking firms did not exist in Iran. Iranian corporations have not publicly issued securities because of easy access to subsidized bank's credits. Now that bank's credits are limited and becoming more expensive, we predict investment banking firms will begin to offer the following servies: 1- Advising Corporations on how to offer different securities publicly. 2- Designing new securities according to the needs of Iranian capital market. 3- Helping government organizations on privatization of government owned companies. 4- Giving advice on pricing of new securities. 5- Helping corporations on mergers and acquisitions.

In this paper, the author evaluates the performance of privatization in IRI's first development plan. First, he outlines some reason for nationalization of economic units and discusses the reasons for expansion of government activities in IRI. Further in the article, he examines methods by which public enterprises transferred to the private sector. Then, he compares the privatization plan with the government performance. The theoretical argument for transferring economic activities to private sector has its foundation in Classical thin ding. Classics believed in "Invisible Hand" in managing the economic affairs of societies in such a way. Following 1929 Crash, Keynes' ideas were responsible for demise of Classical thinking and therefore arguments in favor of government intervention in economic activities. In Europe, especially in United Kingdom, the second world war increased the government role in sphere of production and distribution of goods and services. In 1970's, privatization in United Kingdom have begun; and in 1980's all over the world governments have started transferring government activities to private sector. In IRI after the revolution, government took over many firms that had large debts to commercial banks or owner of them has acquired them in an illegal way. At the end of year 13 70, there were at least 1875 state or public firms with asset amounting to 400000 billion Rials. In IRI, according to a decree of council of ministers, the goals of privatization were said to be: 1. Increasing the efficiency of public firms; 2. Reducing the role of government in economic activities; 3. Bettel utilization of resources; and 4. Move toward economic equilibrium. However, the primary objective of government privatization plan that not mentioned in the law was reduction of government budget deficit. The primary method for privatization in IRI was pubic selling of stocks in Tehran Stock Exchange to the highest private bidders. According to the mentioned degree of council of ministers, by the end of first five year development plan, i.e., end of year 1372, government should have sold some 391 of the government owned companies to private sector. By the end of second month of year 1372, that is 10 month to the end of first five year development plan, only 101 government owned companies, were sold to private sector and some government organizations, notably the state-owned banks. ' In 1371, government bought more stock than that sold to private sector, and this is transfers of stocks owned by private sector to public sector. Some reasons for plan's failure are as follows: 1. Unrealistic objective; 2. Lack of comprehensive plan; 3. Privatization without restructuring; and responsibilities of government owned companies. 4. Insufficient expertise in privatization; and 5. Capital markets deficiencies. To make the privatization successful in the second development plan, the author suggests the following: 1. Consistency of government fiscal and monetary policies with privatization; 2. Revision of labor laws and making it more consistent with privatization plan; and 3. Making Tehran stock exchange more efficient by changing the rules and regulations of the TSE.

Stock dividends have been issued by many corporations all over the world. Many people believe that shareholders do not benefit from receiving stock dividends. Stock dividend do not affect shareholder's equity, but it changes it's composition, because as a result of issuing stock dividend, retained earinings is reduced and the capital is increased by the same amount. From the economic point of view, stock dividend has no real value, because the value of each stock is reduced proportionately. So this question will be raised that "Why Corportions Issue Stock Dividend?" This article will summarize many of the articles which were written about this subject. Four hypotheses are offered: 1- Signalling hypothesis, 2- Liquidity hypothesis, 3- Optinal price range hypothesis, and 4- Stock dividend as a substitute for cash dividend hypothesis

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We have opened a new section in this issue dedicated to the surveys of thesis in the MBA level. In this issue the following thesis have been presentd. 1- Budget deficit in Iran and the ways to finance it. 2- The Analysis of variability of rate of return and the risk of common stocks in Tehran Stock Exchage. 3- Analyzing cash management in Iranian auto industry.

the institutions and instruments in Iran are different from those in other countries it appears to be a difficult task to find equivalent terminology in Farsi for financial terms abused in English and French. By the same token, direct translation of the Western financial jargons to Farsi results in misunderstanding at best and confusion at worst. We have asked dr. hussain abdoh tabrizi and mr parviz sedagatto to examine the translation problems and provide our readers with a glossary of financial terms in Farsi and their equivalents in English. The fourth part of their work appears in this edition. We will continue the efforts in our subsequent issues so that a complete glossary of the Farsi financial terminology wi]] be prepared in a near future.

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