Corporate Finance Chapter 1 Notes - Real assets assets...

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Real assets - assets used to carry on the business to make sure the business moves forward o Tangible Asset o Intangible asset Patents Trademarks Copyrights Financial Assets o Stocks, bonds, etc. Investment decisions - purchase, management, shutting down, and disposal of real assets o Whether to purchase an asset or not o Managing your asset so it's being used efficiently Financing decisions o Take into account cost, credit rating, credit availability, state of economy Corporations are a living entity o Unlimited life o Easy to transfer ownership o Limited liability o Double taxation Corporation pays tax Then shareholders also pay tax Pay attention to federal and state taxes o Complex to set up o Time consuming Financial Manager
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o Intermediary between capital markets and the company itself o Understand and manage risk o Costs Shareholders and managers o Shareholders are principals Care about return on their investment o Managers are agents
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