Corporate Finance

Corporate Finance - screwups) Owned by shareholders elect...

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Firms and the Financial Market Wednesday, September 01, 2010 8:01 AM Finance Overview Finance: study of how ppl and busi eval investments and raise capital funding 3? What long-term investments? (capital budgeting) How to fund? (capital structure) Best manage day to day cash flow ops?(Working capital management) Busi Organization Sole proprietorships Owned by one gets all profits and debts No separation between business and owner when it comes to debt and suing Personal loan and business loan finances Adv Easy to start Personal tax rate All decisions yours Dis Debt death Partnerships General: co-owners No separation between partnership and owners with respect to sue and debt Adv Same as sole Multiple partner funds Dis Jointly share unlimited liability Limited General- unlimited and run it Limited-liable for investment Diff to transfer ownership of gen partner Corps "artificial being, invisible, intangible and existing only in the law" Sue, be sued, purchase, sell own prop, subject to criminal punishment (personnel for corp
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Unformatted text preview: screwups) Owned by shareholders elect board appoint senior management. Adv Liability of owners limited to invested funds Life of corp not tied to owner Easier to transfer ownership and raise cap Dis Regulation Double tax on dividends Hybrids LLC S-Corp 3 principal sets of players that interact with financial markers: Borrowers Savers (lenders) Financial institutions (intermediaries) Money versus capital market Money market- debt instruments with maturity of 1yr or less Capital market- long term debt and equity instruments Commercial banks Collect savings and lend the pooled savings out Charge interest exceeds rat they pay to savers In US banks cannot own industrial corps Non-Bank Financial Intermeds Financial service corps Insurance Invest banks Special Help cos and govs raise money Provide advisory services to client firms on major transactions such as mergers Invest companies ie mutual and hedge funds Pool savings of savers and invest in securities...
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Corporate Finance - screwups) Owned by shareholders elect...

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