lect51s10 - 1-1Course OverviewFinance: what is

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Unformatted text preview: 1-1Course OverviewFinance: what is it?CorporationsInvestorsFinancial Markets:Banks, Stock ExchangesCorporate FinanceMoney and capital marketsInvestments1-2If you are an investorIn investments we seek to value securities and maximize the value of our portfolio (Valuation of bonds and stocks).1-3If you are the CEO of an industrial companyIn corporate finance we are concerned with making decisions that enhance firm value.you can make your company more valuable by choosing better projects (capital budgeting decision)you can make your company more valuable by changing the mixture of your financing, i.e. the ratio of debt to equity (capital structure decision)1-4Financial decisionsCapital budgeting decisions (how to invest money)Real capital investmentsMergers; acquisitionsCapital structure decisions (how to raise and return money)EquityDebtDistribution (Dividend, share repurchase)1-5Balance-Sheet of the FirmWhat long-term investments should the firm engage in?...
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lect51s10 - 1-1Course OverviewFinance: what is

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