Humphery_L01(1)

Humphery_L01(1) - Structure Managerial Decisions The Firms...

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Unformatted text preview: Structure Managerial Decisions The Firms Objective Agency Conflicts Types of Business Organization Some Accounting Background FINS 5514 Lecture 01 Mark Humphery-Jenner Mark Humphery-Jenner FINS 5514 Lecture 01 Structure Managerial Decisions The Firms Objective Agency Conflicts Types of Business Organization Some Accounting Background Structure I 1. Managerial decisions 2. The firms objectives 3. Why managers might not promote the firms objectives - agency theory 4. Types of Business organization 5. Some accounting Mark Humphery-Jenner FINS 5514 Lecture 01 Structure Managerial Decisions The Firms Objective Agency Conflicts Types of Business Organization Some Accounting Background I Managers make three key decisions I The investment decision I The financial decision I The dividend decision I These decisions are interrelated and are the subject of this course Mark Humphery-Jenner FINS 5514 Lecture 01 Structure Managerial Decisions The Firms Objective Agency Conflicts Types of Business Organization Some Accounting Background The Investment Decision I I Includes actions to (a) increase profit and revenue and (b) reduce costs and expenses I The goal is to maximize the firms objective (discussed later) I The solution is to consider in which short- and long-term projects the firm should invest I The manager obtains the optimal solution by examining the size, risk, and timing of cash flows Mark Humphery-Jenner FINS 5514 Lecture 01 Structure Managerial Decisions The Firms Objective Agency Conflicts Types of Business Organization Some Accounting Background The Financing Decision I I The financing decision determines how much funding to raise, and how to raise it I The funding could come from: I Equity decisions I Ordinary shares I Preference shares I SEO, Private Placement, Rights Offer I...
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Humphery_L01(1) - Structure Managerial Decisions The Firms...

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