Chap001.ppt - Goals and Governance of the Corporation This...

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1- 1-2 Goals and Governance of the Corporation This chapter introduces the corporation , its goals, and the roles of financial managers. Source: U.S. Census 2008 SUSB Annual Data
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1- 1-3 Investment and Financing Decisions The Investment Decision: Decision to invest in tangible or intangible assets Capital budgeting 资本预算 Capital expenditure Real Assets Assets used to produce goods and services The Financing Decision: The form and amount of financing of a firm’s investments. Financial Assets: Financial claims to the income generated by the firm’s real assets
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1- 1-4 Investment and Financing Decisions Are the following capital budgeting or financing decisions? Apple decides to spend $500 million to develop a new iPhone. GE borrows $400 million from bond investors. Microsoft issues 100 million shares to buy a small technology company.
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1- 1-5 Goals of The Corporation Shareholders want wealth maximization Wealth maximization vs. profit maximization: Pitfall: Profits from which period?
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