What Is Corporate Finance? • What long-term investments...

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FIN300 Managerial Finance I Ryerson University Fall 2014 Dr. Yi Feng
Today’s Agenda Motivation A Key Concept in Finance My Message To Create a Learning Environment Course Outline Chapter 1 Chapter 2 2
Motivation What is Finance? Mathematics + $$$ = Finance Subfields of Finance: Corporate finance, investment, personal finance, financial markets, real estate finance, etc. Finance is at the core of everything we do in business and management. Finance is indispensable in everyday life. 3
4 A Key Concept in Finance An example If I want to borrow $10,000 from you today and promise to pay you back $10,000 a year from now, do you agree to lend me the money? The essence $1 today does not equal $1 tomorrow The big name: __________________ Application Valuation of stock and bond Calculation of pension and mortgage Making capital investment decisions
5 My Message Finance is useful! How to Get the Most Out of This Course Do readings ahead of time Take notes during lectures Review the lectures afterwards with your study group Work on practice questions in groups and alone Ask Ask Ask Questions If you WORK HARD , you can MAKE IT !
6 To Create A Learning Environment Come to class ON TIME You may use your laptop to take notes, but… Turn off your cell phone and other electronic devices
7 Chapter 1 What is Corporate Finance? Role of the Financial Manager Organizing a Business Goals of the Corporation Agency Problem Financial Markets
What Is Corporate Finance? What long-term investments should you take on?
Where will you get the long-term financing to pay for your investment?
How will you manage day-to-day financial activities?
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9 Role of the Financial Manager Financial Manager Firm's operations Investors (2) (3) (4a) (4b) Real assets (1)Cash raised from investors (2)Cash invested in firm (3)Cash generated by operations (4a) Cash reinvested (4b) Cash returned to investors (1)
10 Organizing a Business Types of business organizations Sole Proprietorships Partnerships Corporations (the focus of this course) Others
11 Organizing a Business Sole Proprietorship / Partnership One individual (two or more people) own ____ manage the business Bears all the costs, but keep all of the net profits.

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