1-1a.- Finance Fundamentals I

1-1a.- Finance Fundamentals I - Competition Its...

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Finance Ramesh Rao 1
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Chapter Organization A. The “Financial Way of Thinking” B. The Context for Modern Finance B1. Alternative Economic Systems B2. A Taxonomy of Finance B3. Three Major Questions in Corporate Finance Ramesh Rao 2
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A. The “Financial Way of Thinking” Ramesh Rao 3 So, what is the The “Financial Way of Thinking”? Accounting Economics Concept of financial success in:
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B. The Context for Modern Finance Ramesh Rao 4
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B1. Alternative Economic Systems Ramesh Rao 5 Communis m Socialism Capitalism Types: Laissez Faire Modern Capitalism The continuum of governmental involvement in economic systems Other “-isms?”
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What is Capital? Ramesh Rao 6 Anything with productive capacity is called “capital.” Capital Human Capital Real Capital Physical Financial - Debt - Equity Focus of our course
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Aspects of Capitalism Primacy of Property Rights Pursuit of Self-interest The Morality of Self-interest Self-interest vs. Opportunism Non-financial Welfare Measures? Free markets What does it really mean?
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Unformatted text preview: Competition Its significance? Ramesh Rao 7 Workings of the Invisible Hand in Capitalism Logic of Invisible Hand Pareto Efficiency Pioneers: Adam Smith or Szuma Chien? Some Inevitable Tradeoffs Equity v. Efficiency Social Philosophies Ramesh Rao 8 Role of Government in Capitalistic Societies Judicious intervention: Property Rights Infrastructure Defense Issues of Equity Regulation, welfare, Ramesh Rao 9 Alternative Political Philosophies: Extent of belief in the markets Alternative Policy Tools: Fiscal Policy Monetary Policy B2. A Taxonomy of Finance Ramesh Rao 10 Taxonomy: classification / organization B3. Three Major Questions in Corporate Finance Ramesh Rao 11 1. The Investment Decision Evaluating multiple investment opportunities 2. The Financing Decision Raising money for those investments 3. The Working Capital Decision Small-business decision-making...
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This note was uploaded on 01/15/2010 for the course FIN 357 taught by Professor Hadaway during the Fall '06 term at University of Texas at Austin.

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1-1a.- Finance Fundamentals I - Competition Its...

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