10 - [email protected] Business Marketing not...

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[email protected] Business 3/10/08 Marketing not included in final. How are finance and accounting different? Accounting is book keeping, record keeping, keeping score, about collecting and categorizing info but finance is about where we can get money and how we want to use that money. Evaluating investment opportunities and how we will generate profit form these investment. What is capital structure? It is the mixture of debt and equity that the firm uses to finance itself. Equity safe, debt unsafe Leverage- borrowing money to increase your profit. DEBT FINANCING The use of using someone else’s money (banks, debt financing) and we are more profitable. Ex. Investing 20,000 dollars versus investing 100,000 dollars in equity your ROE using the smaller amount of equity (20,000) each share of stock will be worth more. But on the flip side using more Financial leverage cuts both ways o Multiple good results into greater results o Multiples poor results into terrible results
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This note was uploaded on 09/30/2009 for the course BCOR 1010 taught by Professor Latier,jef during the Spring '07 term at Colorado.

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10 - [email protected] Business Marketing not...

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