Chap1_Fall2011_s - 1 Chapter 1 Introduction to Corporate...

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Unformatted text preview: 1 Chapter 1 Introduction to Corporate Finance FI 311 Gregory Sabin Chapter 1 Introduction to Corporate Finance FI 311 Elizabeth Booth Chapter 1 Introduction to Corporate Finance 2 Chapter 1 Introduction to Corporate Finance FI 311 Elizabeth Booth What is Finance? From the internet: The commercial activity of providing funds or capital The science of funds management The branch of economics that studies the management of money or other assets For the Liberal Arts Major: The study and practice of making dollar denominated decisions For the Business Major: Finance is the set of activities dealing with the management of funds. Specifically, it relates to the collection and use of funds. For the Finance Major: The field of finance refers to the concepts of time, money and risk and how they are interrelated 3 Chapter 1 Introduction to Corporate Finance FI 311 Elizabeth Booth Key Concepts and Skills; pg. 3 Know the basic types of financial management decisions and the role of the financial manager Know the financial implications of the different forms of business organization Know the goal of financial management Understand the conflicts of interest that can arise between owners and managers Understand the various types of financial markets 4 Chapter 1 Introduction to Corporate Finance FI 311 Elizabeth Booth Business Finance will help you- persuade top management to fund a product development project, marketing campaign, or new equipment for the shop floor- acquire funds to start your own business Personal Finance will help you- avoid common financial mistakes- make lease/buy decisions on your new Corvette- decide when (and how) to refinance your mortgage- help you plan for and respond to lifes contingencies - help you invest your savings wisely The domain of finance 5 Chapter 1 Introduction to Corporate Finance FI 311 Elizabeth Booth Goal Of Financial Management What should be the goal of a corporation? Maximize profit? Minimize costs? Maximize market share?...
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This note was uploaded on 11/09/2011 for the course FI 311 taught by Professor Booth during the Fall '06 term at Michigan State University.

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Chap1_Fall2011_s - 1 Chapter 1 Introduction to Corporate...

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