Chapter_11 - Business Management: A Malaysian Perspective...

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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 11– 1
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 11– 2 11 Financial Management CHAPTER
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 11– 3 At the end of this chapter, students will be able to: ± Explain what is financial management. ± Relate corporate finance to legal forms of business organizations. ± Discuss the goal of the firm. ± Explain agency problem. ± Elaborate on the firm’s capital structure and the cost of capital. ± Discuss capital raising and elaborate capital markets. ± Elaborate capital budgeting process. ± Discuss corporate costs control. ± Explain time value of money, present and future value. LEARNING OBJECTIVES
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 11– 4 FINANCIAL MANAGEMENT Deals with the maintenance and creation of economic value or wealth. Involves the dimensions of: Investment decision Financing decision.
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 11– 5 FINANCIAL MANAGEMENT DECISIONS Investment decision – Choose the most promising investment venture that offers the highest expected return after considering the risks involved. Financing decision – Decide on how to raise funds (cheapest) to finance the company’s investment ventures.
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 11– 6 LEGAL FORMS OF BUSINESS ORGANIZATION Corporation Sole Proprietorship Partnership
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Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 11– 7 LEGAL FORMS OF BUSINESS ORGANIZATION Each legal form of business organization has its own unique characteristics in terms of: Legal identity Nature of ownership succession Business continuity Taxation implication on income generated.
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© Oxford University Press Malaysia, 2008 All Rights Reserved 11– 8 CORPORATION Is regarded as a legal entity Can enter into a contractual agreement with another party. Subject to all legal litigations and
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Chapter_11 - Business Management: A Malaysian Perspective...

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