Multinational or Global Corporation
A firm that operates in an integrated fashion
in a number of (two or more) countries.
Decision making may be centralized in the
home country or decentralized across the
Capital Structure and Leverage
Optimal versus Target
Optimal Capital Structure
The capital structure that maximizes a firms stock
Target Capital Structure
The mix of debt, preferred stock, and common
equity the firms wants to have.
Distribution to Shareholders:
Dividends and Share Repurchases
It is a decision that a company makes on what it
wants to do with its net income whether it wants
to retain and reinvest them (as retained earnings),
or it wants to distribute
What is a hybrid security?
Hybrid Securities are tradable securities
possessing characteristics borrowed from both
debt and equity instruments.
Usually pays a predictable (fixed or float) ra
Mergers and Acquisitions
Definition of Terms:
Merger combination of two or more firms to
form a single firm. (Relatively co-equal basis).
Parent stock retired and new shares are issued.
Acquisition the purchase of one firm by
another. Can be a controlli
Financial Planning and Forecasting
Why the need
To maximize stock price
To maximize gains and minimize losses
To reduce information asymmetry
To provide useful information to
investors regarding economic and