Chap01introkim - Chapter 1 Introduction to Corporate Finance Chapter Outline Chapter Outline Corporate Finance and the Financial Manager Forms of

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Unformatted text preview: Chapter 1 Introduction to Corporate Finance Chapter Outline Chapter Outline Corporate Finance and the Financial Manager Forms of Business Organization The Goal of Financial Management The Agency Problem and Control of the Corporation Financial Markets and the Corporation 1-2 Why Finance is important? Why Finance is important? To the economy ◦ From a macro perspective, Finance is merely the practical application of economics. ◦ Financial system is to make sure that those with good ideas get the money necessary to implement the ideas. ◦ Market-based economy is through the stock and bond markets. ◦ In competition, firms will strive to find better investments. This leads to economic growth, more jobs, and a higher standard of living. Why Finance is important? Why Finance is important? For personally ◦ Just like a company, we all need money. ◦ Need to know how to invest and how to raise money. ◦ Retirement planning: ◦ Ironically, Finance is important because we do not want to have to worry about money. ◦ Marriages are ruined, friendships crushed, and health destroyed over money worries. Financial knowledge can help prevent these problems. Career Opportunities in Career Opportunities in Finance Finance Money and capital markets ◦ Consumer banking, Corporate banking ◦ Opportunities in investment advisory firms, mutual fund companies, pension funds, investment arms of financial departments Investments ◦ High income potential, very competitive industry ◦ Brokerage house, Merrill Lynch, Investment portfolio Financial management ◦ Budgeting, financial forecasting, cash management, credit administration, investment analysis, risk management, and strategies of firms Corporate Finance Corporate Finance Some important questions that are answered using finance: ◦ What long-term investments should the firm take on? ◦ Where will we get the long-term financing to pay for the investment?...
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This note was uploaded on 12/13/2011 for the course MANAGEMENT 103 taught by Professor Mr.singh during the Spring '11 term at Aristotle University of Thessaloniki.

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Chap01introkim - Chapter 1 Introduction to Corporate Finance Chapter Outline Chapter Outline Corporate Finance and the Financial Manager Forms of

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