Stock Market Transactions
-Apple Computer decides to issue additional stock with the assistance of its investment banker. An
investor purchases some of the newly issued shares, is this a primary market transaction or a secondary
Stock Prices and Intrinsic Value
-in equilibrium a stocks price should equal its true or intrinsic value
-intrinsic value is an estimate of a stocks true value based on accurate risk and return data
-intrinsic value is a long-run concept
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1.) What is the companys total debt?
TD = STD+LTD = 150,000+750,000 = 900,000
2.) What is the amount of total liabilities and equity that appears on the sheet?
TL + E = TA = 250,000
3.) What is the balance of current assets on the firms balanc
Finance Financial management also called corporate finance, focuses on decisions related to how
much and what types of assets to acquire, how to raise the capital needed to purchase assets, and how
to run the firm so as to maximize its value.
Balance Sheet Identity
Equity the residual interest in the assets of an entity that remains after deducting its liabilities
Equity = Assets Liabilities
Or Total Assets = Liabilities + Equity
Net working capital = current assets current lia