Week 1 Discussion

Week 1 Discussion - Chapter 1 Q1-1. Why must a financial...

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Chapter 1 Q1-1. Why must a financial manager have an integrated understanding of the five basic finance functions? Why is the corporate governance function considered a finance function? Has the risk- management function become more important in recent years? Since corporate finance managers manage all cash that flows through the business, the manager needs to have at least a basic understanding of all that that encompasses. Raising capital (external financing) is important because it involves the cash that the company has to work with for day-to-day operations. Budgeting is important to track and evaluate where the monies is allocated. If new products are desired then the budget for that investment must be brought from somewhere within the budget. Financial management is important because it is the job of managing the operating cash flow of the company, this must be done efficiently to ensure that the company is making a profit. The capital structure decision must be considered to ensure that the company’s debt and equity securities is maximized to ensure that the firms overall market value is favorable (Megginson, and Smart, 16). Corporate governance systems ensure that all finances are kept on the up-and-up and that there are
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This note was uploaded on 01/26/2011 for the course FI 360 taught by Professor Tavbin during the Spring '08 term at Park.

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Week 1 Discussion - Chapter 1 Q1-1. Why must a financial...

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