FinanceExam1Review

FinanceExam1Review - Exam 1 Review: Finance Chapter 1 The...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Exam 1 Review: Finance Chapter 1 The Four Basic Areas of Finance Corporate finance Investments Financial Institutions International finance CFO Oversees: Controller’s office o Handles cost and financial accounting, tax payments, and management information systems. Treasurer’s office o Responsible for managing the firm’s cash and credit, its financial planning, and its capital expenditures. Financial Management Decisions Capital Budgeting – The process of planning and managing a firm’s long-term investments. o Evaluating the size, timing, and risk of future cash flows is the essence of capital budgeting. Capital Structure – The mixture of debt and equity maintained by a firm. Working Capital Management – A firm’s short-term assets and liabilities. Forms of Business Organization Sole proprietorship – has unlimited liability for business debts. Partnership – a business formed by two or more individuals or entities. o General partnership – all partners share in gains or losses and have unlimited liability. o Limited partnership – one or more general partners run the business and have unlimited liability, and one or more limited partners who do not actively participate in the business. Corporation – A business created as a distinct legal entity owned by one or more individuals or entities. o LLC – limited liability Company – taxed like a partnership but retain limited liability for owners. The Agency Problem and Control of the Corporation Agency Problem – the possibility of conflict of interest between the owners and management of a firm. Primary Vs. Secondary Markets Primary Markets – Corporation is the seller, either through public offering or private placement. Secondary Markets – Transaction that involves one owner or creditor selling to another.
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/27/2008 for the course BCOR 2200 taught by Professor Tomnelson during the Spring '08 term at Colorado.

Page1 / 3

FinanceExam1Review - Exam 1 Review: Finance Chapter 1 The...

This preview shows document pages 1 - 2. Sign up to view the full document.

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