FM01 - After reading this chapter, students should be able...

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Unformatted text preview: After reading this chapter, students should be able to: • Explain the career opportunities available within the three interrelated areas of finance. • Identify some of the forces that will affect financial management in the new millennium. • Describe the advantages and disadvantages of alternative forms of business organization. • Briefly explain the responsibilities of the financial staff within an organization. • State the primary goal in a publicly traded firm, and explain how social responsibility and business ethics fit in with that goal. • Define an agency relationship, give some examples of potential agency problems, and identify possible solutions. • Identify major factors that determine the price of a company’s stock, including those that managers have control over and those that they do not. • Discuss whether financial managers should concentrate strictly on cash flow and ignore the impact of their decisions on EPS. Learning Objectives: 1 - 1 Chapter 1 An Overview of Financial Management LEARNING OBJECTIVES Chapter 1 covers some important concepts, and discussing them in class can be interesting. However, students can read the chapter on their own, so it can be assigned but not covered in class. We generally spend much of the first day going over the syllabus and discussing grading and other mechanics relating to the course. To the extent that time permits, we talk about the topics that will be covered in the course and the structure of the book. We also discuss briefly the fact that it is assumed that managers try to maximize stock prices, but that they may have other goals, hence that it is useful to tie executive compensation to stockholder-oriented performance measures. If time permits, we think it’s worthwhile to spend at least a full day on the chapter. If not, we ask students to read it on their own, and to keep them honest, we ask one or two questions about the material on the first mid-term exam. One point we emphasize in the first class is that students should get a copy of Blueprints and a financial calculator immediately, and bring both to class regularly. We also put copies of the various versions of our “Brief Calculator Manual,” which in about 12 pages explains how to use the most popular calculators, in the copy center. We want students to start learning to use their calculators early, because in the past we have found that many students wait to learn to use their calculators at the same time they are trying to understand time value of money concepts. If students learn how to use the calculator early, they are less likely to get confused by time value concepts. We are often asked what calculator students should buy. If they already have a financial calculator that can find IRRs, we tell them that it will do, but if they do not have one, we recommend either the HP-10B or 17B. Please see the “Lecture Suggestions” for Chapter 7 for more on calculators....
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This note was uploaded on 05/29/2011 for the course HRM 100 taught by Professor Elijahchen during the Spring '11 term at Abraham Baldwin Agricultural College.

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FM01 - After reading this chapter, students should be able...

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