LECTURE 1 SPRING2012

LECTURE 1 SPRING2012 - TEST 1 LECTURE 1 INTRODUCTION TO...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
TEST 1/ LECTURE 1: INTRODUCTION TO FINANCE OBJECTIVES: 1. Identify three traditional areas of finance 2. Describe five guiding principles of finance 3. Compare and contrast different forms of business organizations. 4. Describe the role of the financial manager. 5. Define debt and equity. 6. Compare and contrast debt and equity. Introduction to Finance (about 300 majors a year) Traditional areas of finance fall into three main categories. 1. Money and Banking ; brings borrowers and lenders together. (Real estate, small biz loans, Macro; Fed Reserve. 2. Investmen ts; 1. Selling stocks/loans to investors. 2. Valuing stocks/bonds/companies (merger opportunities and looking for acquisitions and refinincing)…this is investment banking 3. Finance Management; it is the finances of the firm . Financial management refers to the operation of the firm. Typical issues facing a financial manager are: 1. What projects to invest in?. ..where do I put money towards a. Projects can be new products or new equipment, or should we buy or expand the business. 2. If we’re gonna invest some money, how are we going to raise the capital ($) a. Stocks/bonds. Can get loans which falls under bonds or a debt category b. We want to raise capital as cheaply as possible…want the cheapest way to raise the money 3. Daily decision of the firm a. Inventory, hiring people, or product mix, cash available. These daily things are looked at financially Guiding Principles of Finance: 1. Maximize Wealth 2. Time value of money
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
3. Risk and return 4. Leverage 5. Diversification Maximization of wealth is the creation of as much wealth as possible with the available resources. Do all firms maximize wealth?
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/24/2012 for the course FINA 3000 taught by Professor Laplante during the Spring '08 term at UGA.

Page1 / 6

LECTURE 1 SPRING2012 - TEST 1 LECTURE 1 INTRODUCTION TO...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online