Three key steps of financial planning forecasting the

Info icon This preview shows pages 3–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Three key steps of financial planning: - Forecasting the firm’s short-term and long-term financial needs. - Developing budgets to meet those needs. - Establishing financial controls to see if the company is achieving its goals. 顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶 , 顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶 : 顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶顶 , 顶顶顶顶顶顶顶顶顶顶顶 Debt Financing -- The funds raised through various forms of borrowing that must be repaid. Equity Financing -- The funds raised from within the firm from operations or through the sale of ownership in the firm (such as stock). Indenture Terms -- The terms of agreement in a bond issue. Secured Bond -- A bond issued with some form of collateral (i.e. real estate). Unsecured (Debenture) Bond -- A bond backed only by the reputation of the issuing company. Using Securities Markets for Financing & Investing Opportunities Securities markets are financial marketplaces for stocks and bonds and serve two primary functions: 1. Assist businesses in finding long-term funding to finance capital needs. 2. Provide private investors a place to buy and sell securities such as stocks and bonds. Securities markets are divided into primary and secondary markets: 1. Primary markets handle the sale of new securities. 2. Secondary markets handle the trading of securities between investors with the proceeds of the sale going to the seller. Stock Exchange -- An organization whose members can buy and sell securities on behalf of companies and individual investors. Over-the-Counter (OTC) Market -- Provides companies and investors with a means to trade stocks not listed on the national securities exchanges. NASDAQ -- A telecommunications network that links dealers across the nation so they can exchange securities. Securities and Exchange Commission (SEC) -- The federal agency responsible for regulating the various stock exchanges; created in 1934 through the Securities and Exchange Act. Prospectus -- A detailed registration statement that includes extensive economic and financial information that must be sent to prospective investors. 1. What’s the primary purpose of a stock exchange? The primary purpose of a stock exchange is to allow members of the exchange to buy or sell securities on behalf of investors.
Image of page 3

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

View Full Document Right Arrow Icon
1. Can you name the world’s largest stock exchange? NYSE Euronext is the largest stock exchange with exchanges in six different countries.
Image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern