wk1_2 - EC150 Financial Economics Instructor Edward...

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Unformatted text preview: EC150: Financial Economics Instructor: Edward Kutsoati SLIDE SET #1: INTRODUCTION TO SLIDE SET #1: INTRODUCTION TO CORPORATE FINANCE CORPORATE FINANCE (BASED ON RWJ CHAPTER 1) (BASED ON RWJ CHAPTER 1) What is Corporate Finance? ■ Balance-Sheet View of the Firm Current Assets Fixed Assets Current Liabilities Long-Term Debt Stockholders’ Equity NWC Capital Budgeting Long-Term Financing Liquidity Management Corporate Financial Management ■ Capital Budgeting: What fixed assets or long-term investment projects should the firm pursue? ■ Liquidity Management: How should the firm manage its net working capital, and how can it ensure that it always has sufficient cash to meet obligations? ■ Financing/Dividends: What mix of debt vs equity and What mix of debt vs equity and internally-generated versus external capital should the firm internally-generated versus external capital should the firm use? How should the company return cash to use? How should the company return cash to shareholders? shareholders? ■ (1) Cash raised from security issues (1) Cash raised from security issues The flow of cash Company Operations Capital Markets Financial Manager (1 ) ■ (2) Invest cash in firm’s operations (2) Invest cash in firm’s operations The flow of cash Company Operations Capital Markets Financial Manager (2) (1 ) ■ (3) Cash generated by the firm’s operations (3) Cash generated by the firm’s operations The flow of cash Company Operations Capital Markets Financial Manager (2) (1 ) (3) ■...
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This note was uploaded on 03/26/2008 for the course EC 150 taught by Professor Kutsoati during the Spring '08 term at Tufts.

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wk1_2 - EC150 Financial Economics Instructor Edward...

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