chapter 2 - Chapter 2 Why corporations need financial...

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COPYRIGHT©ZHULI 1 Chapter 2 Why corporations need financial markets and institutions
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COPYRIGHT©ZHULI 2 Objectives 1. Understand how financial markets and institutions channel savings to corporate investment 2. Understand the basic structure of mutual funds, pension funds, banks, and insurance companies 3. Enumerate the functions of financial markets and institutions 4. Understand why the cost of capital for corporate investment is determined by investment opportunities in financial markets
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COPYRIGHT©ZHULI 3 Content Why finance matters The flow of savings to corporations Functions of financial markets and intermediaries Value maximization and the cost of capital
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COPYRIGHT©ZHULI 4 A modern financial system offers financing in many different forms, depending on the company’s age, its growth rate, and the nature of its business. Financial system: h & & &
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COPYRIGHT©ZHULI 5 Content Why finance matters The flow of savings to corporations Functions of financial markets and intermediaries Value maximization and the cost of capital
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COPYRIGHT©ZHULI 6 The money that corporations invest in real assets comes ultimately from savings by investors. But there
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chapter 2 - Chapter 2 Why corporations need financial...

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