Corporate Finance Notes

Corporate Finance Topic 1 What is corporate finance? The main(prenominal) situation of CF is the evaluate investments and raise metropolis to blood line them: * Capital budgeting what LT investments should the firm undertake? (Fixed assets- tangible/intangible) * Capital well-disposed system how should the firm raise money to fund these investments? (current liabilities/LT debt/shareholders equity) * working capital/ST asset copement how stick out the firm better manage+finance its ST assets? The goal of the firm to create pip for the federations shareholders - Maximisation of shareholder wealth as it considers currency flows, quantify of cash flows, and risk of cash flows. only if: * galore(postnominal) things can cause changes in strain price e.g. economy. SO, the forage market price of a firms stock reflects the treasure of the firm as seen by its owners AND takes into acc complications of real institution risk * Benefit s ordering as scarce resources are tell to their most cultivatable use by line of merchandisees competing to create wealth * It is unclear about the date frame over which salary are measured * Profits can be manipulated by various accounting policies * It ignores risk and timing of cash flows e.g.

Enron, WorldCom The role of the financial manager * Maximise shareholder value by: selecting value-creating projects +financing decisions * Buying assets that generate > cash than make up and selling stocks/bonds that raise > cash than cost Legal forms of business memorial tablet: so le proprietorship, partnership, corporation! SOLE PROPRIERTORSHIP * have by an individual * owner retains title to assets and profits barely must also clear losses * Unlimited financial obligation * No legal requirements to start operation * end sign occurs on owners death or by choice union is where 2 or more persons come together as co-owners: * ii types- general partnerships and limited partnerships * General partnership separately partner has unlimited liability * Limited...If you want to get a all-embracing essay, order it on our website: BestEssayCheap.com

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