Business March 10

Business March 10 - Business Personal Finance The value of...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Business March 10, 2008 1. Personal Finance 1. The value of your money is constantly changing 2. Small sacrifices in life can produce big payoffs 3. Every decision involves tradeoffs 1. Opportunity costs 2. Risk-return 2. Finance vs. Accounting 1. Accounting is bookkeeping 2. Finance is where you can get money and how you want to use it how to meet goals 3. Capital structure 1. Mix of firm’s debt and equity financing 1. Equity is safer because you owe nobody money 2. Equity is shares 4. Leverage 1. Borrowing money to increase profit and return on equity 1. Earnings/equity on the firm 2. Financial leverage cuts both ways 1. Multiplies good results into great results 2. Multiplies poor results into terrible results 3. Return vs. risk analyses drive stock prices 1. Increases in leverage increases expected returns 2. Increase in leverage increases risk 5. Debt vs. Equity Financing 1. Debt 1. Bond 1. Get paid before stockholders if company liquidates
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2. Equity 1. Common stock 2. Preferred stock
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/16/2008 for the course BCOR 1010 taught by Professor Latier,jef during the Fall '07 term at Colorado.

Page1 / 4

Business March 10 - Business Personal Finance The value of...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online