Business Finance- Chapter 2

Business Finance- Chapter 2 - Chapter 2- Business Finance I...

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Chapter 2- Business Finance I 2.2: The Flow of Savings to Corporations The money that corporations invest in real assets comes ultimately from savings by investors. Financial (Stock) Market- A market where securities (a traded financial asset, such as a share of stock) are issued and traded. Primary Issue- A new issues of shares that increase both the amount of cash held by a company and the number of shares held by the public. o These issues are sold in a Primary Market : Market for the sale of new securities by corporations. Secondary Transactions- Purchases of sales of existing securities. o These issues are sold in a Secondary Market : Market in which previously issued securities are traded among investors. Fixed-Income Market- Market for debt securities. Capital Markets- The market for long-term debt and equity. o A firm’s “capital” is its long-run financing. Money market-
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Business Finance- Chapter 2 - Chapter 2- Business Finance I...

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