The document provides an overview of Chapter 1 from a corporate finance textbook. It introduces key concepts such as the three main financial decisions facing managers regarding investments, financing, and dividends. It also discusses the corporate form of business organization and explains that the goal of financial management is to maximize shareholder wealth. The chapter objectives are outlined and several models and concepts are defined, including the investment decision process, capital structure, and agency relationships between managers and shareholders.
Corporate finance is an area of finance dealing with financial decisions business enterprises make and the tools and analysis used to make these decisions. The primary goal of corporate finance is to maximize corporate value while managing the firm's financial risks. Although it is in principle different from managerial finance which studies the financial decisions of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms.
Class assignment on an introduction to corporate finance which includes the following topics-
1. What is corporate finance?
2. Finance in the organizational structure of a firm
2.1 organization of finance function
2.2 financial manager
3. Finance functions
3.1 executive finance function
3.2 routine finance function
4. Goals of corporate finance
4.1 profit maximization
4.2 limitations of profit maximization
4.3 wealth maximization
4.4 limitations of wealth maximization
5. Corporate finance and related disciplines
5.1 relationship with economics
5.2 relationship with accounting
5.3 relationship with mathematics
6. The agency problem
6.1 agency
6.2 agency problems between shareholders and managers
6.3 resolving conflicts between shareholders and managers
6.4 agency problems between shareholders and creditors
6.5 resolving conflicts between shareholders and creditors
7. Development of corporate finance
Hope you guys find it helpful.
An Introduction to Managerial Finance prepared for the Graduate School of Business at the University of New England. Slides prepared by Dr Subba Reddy Yarram.
Fundamental of Corporate Finance, chapter 1Yin Sokheng
The objective of the course is to provide an understanding of both the theory of corporate finance fundamentals and how it applies to the “real” world. The main focus of this course is on the corporate financial manger and how he/she reaches decisions. We will cover many issues that are important to a modern financial manager including various advance topics in corporate finance fundamentals such as the essential concepts and understanding of the uses of financial statements and cash flows, ratio analysis, financial planning and growth, time value of money, bonds and stocks valuation, and project valuation.
Corporate finance is an area of finance dealing with financial decisions business enterprises make and the tools and analysis used to make these decisions. The primary goal of corporate finance is to maximize corporate value while managing the firm's financial risks. Although it is in principle different from managerial finance which studies the financial decisions of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms.
Class assignment on an introduction to corporate finance which includes the following topics-
1. What is corporate finance?
2. Finance in the organizational structure of a firm
2.1 organization of finance function
2.2 financial manager
3. Finance functions
3.1 executive finance function
3.2 routine finance function
4. Goals of corporate finance
4.1 profit maximization
4.2 limitations of profit maximization
4.3 wealth maximization
4.4 limitations of wealth maximization
5. Corporate finance and related disciplines
5.1 relationship with economics
5.2 relationship with accounting
5.3 relationship with mathematics
6. The agency problem
6.1 agency
6.2 agency problems between shareholders and managers
6.3 resolving conflicts between shareholders and managers
6.4 agency problems between shareholders and creditors
6.5 resolving conflicts between shareholders and creditors
7. Development of corporate finance
Hope you guys find it helpful.
An Introduction to Managerial Finance prepared for the Graduate School of Business at the University of New England. Slides prepared by Dr Subba Reddy Yarram.
Fundamental of Corporate Finance, chapter 1Yin Sokheng
The objective of the course is to provide an understanding of both the theory of corporate finance fundamentals and how it applies to the “real” world. The main focus of this course is on the corporate financial manger and how he/she reaches decisions. We will cover many issues that are important to a modern financial manager including various advance topics in corporate finance fundamentals such as the essential concepts and understanding of the uses of financial statements and cash flows, ratio analysis, financial planning and growth, time value of money, bonds and stocks valuation, and project valuation.
Creating an inbound marketing strategy is a crucial first step that you need to take before setting out to execute your marketing efforts. This strategy must include your marketing goals, a detailed plan of attack and measurement and analytics tactics. In today’s market, it’s key that you reach and nurture your visitors with information that they want to see, when they want to see it.
Building your inbound marketing strategy is a complex process, and should include current brand and marketing analysis, analysis of your competition, development of your buyer personas and lifecycle stages, along with specific plans for your digital experience, content marketing, demand generation and lead nurturing. With a well thought-out strategy as your foundation, your marketing success will skyrocket. Join us as we take a look at how to build a strategy that will allow your organization to experience dramatic growth.
Eddie Lampert bought Kmart out of bankruptcy. W.L. Ross made a fortune many times over buying steel and other companies out of bankruptcy. Hedge funds and other distressed debt traders buy and sell millions of dollars of distressed securities and bankruptcy claims every day. A number of private equity funds focus exclusively on buying distressed businesses, fixing, and selling them. And fortunes are made when real estate crashes by those who have the dry powder to swoop in and buy when others are forced to sell. This webinar explains how to loan to, or purchase the debt of, a company in order to acquire it (a strategy commonly called “loan to own”); how to learn about opportunities involving distressed companies; and tips and best practices for participating in bankruptcy, Article 9, and other sales of distressed businesses (including the concept of serving as the “stalking horse).
Part of the webinar series: RESTRUCTURING, INSOLVENCY & TROUBLED COMPANIES 2022
See more at https://www.financialpoise.com/webinars/
Chapter 1 Introduction to Financial ManagementSafeer Raza
Chapter 1 of Financial Management by Van horn
Introduction to Financial management
Topics
Introduction
What is Financial Management
Investment Decision
Financing decision
Asset management Decision
Goal of the firm
Value creation or profit maximization
wealth maximization
Agency problems
Corporate Social Responsibility
Corporate governance
Organization of the financial management function
Eddie Lampert bought Kmart out of bankruptcy. W.L. Ross made a fortune many times over buying steel and other companies out of bankruptcy. Hedge funds and other distressed debt traders buy and sell millions of dollars of distressed securities and bankruptcy claims every day. A number of private equity funds focus exclusively on buying distressed businesses, fixing, and selling them. And fortunes are made when real estate crashes by those who have the dry powder to swoop in and buy when others are forced to sell. This webinar explains how to loan to, or purchase the debt of, a company in order to acquire it (a strategy commonly called “loan to own”); how to learn about opportunities involving distressed companies; and tips and best practices for participating in bankruptcy, Article 9, and other sales of distressed businesses (including the concept of serving as the “stalking horse).
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/opportunity-amidst-crisis-buying-distressed-assets-claims-and-securities-for-fun-profit-2020/
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the what'sapp number of my personal pi merchant who i trade pi with.
Message: +12349014282 VIA Whatsapp.
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Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
Yes of course, you can easily start mining pi network coin today and sell to legit pi vendors in the United States.
Here the what'sapp contact of my personal vendor.
+12349014282
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how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the what'sapp number.
+12349014282
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
2. Chapter Organisation
1.1 Corporate Finance and the Financial Manager
1.2 The Statement of Financial Position and Corporate
Financial Decisions
1.3 The Corporate Form of Business Organisation
1.4 The Goal of Financial Management
1.5 The Agency Problem and Control of the Corporation
1.6 Financial Markets and the Corporation
1.7 The Two-period Perfect Certainty Model
1.8 Outline of the Text
1.9 Summary and Conclusions
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3. Chapter Objectives
• Understand the basic idea of corporate finance.
• Understand the importance of cash flows in financial decision
making.
• Discuss the three main decisions facing financial managers.
• Know the financial implications of the three forms of business
organisation.
• Explain the goal of financial management and why it is
superior to other possible goals.
• Explain the agency problem, and how it can be can be
controlled and reduced.
• Outline the various types of financial markets.
• Discuss the two-period certainty model and Fisher’s
Separation Theorem.
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4. What is Corporate Finance?
• Corporate finance attempts to find the answers to the
following questions:
– What investments should the business take on?
THE INVESTMENT DECISION
– How can finance be obtained to pay for the required
investments?
THE FINANCE DECISION
– Should dividends be paid? If so, how much?
THE DIVIDEND DECISION
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5. The Financial Manager
• Financial managers try to answer some or all of
these questions.
• The top financial manager within a firm is usually
the General Manager–Finance.
– Corporate Treasurer or Financial Manageroversees
cash management, credit management, capital
expenditures and financial planning.
– Accountantoversees taxes, cost accounting, financial
accounting and data processing.
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6. The Investment Decision
• Capital budgeting is the planning and control of
cash outflows in the expectation of deriving future
cash inflows from investments in non-current
assets.
• Involves evaluating the:
– size of future cash flows
– timing of future cash flows
– risk of future cash flows.
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7. Cash Flow Size
• Accounting income does not mean cash flow.
• For example, a sale is recorded at the time of sale
and a cost is recorded when it is incurred, not
when the cash is exchanged.
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8. Cash Flow Timing
• A dollar today is worth more than a dollar at some
future date.
• There is a trade-off between the size of an
investment’s cash flow and when the cash flow is
received.
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9. Cash Flow Timing
Which is the better project?
Future Cash Flows
Year Project A Project B
1 $0 $20 000
2 $10 000 $10 000
3 $20 000 $0
Total $30 000 $30 000
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10. Cash Flow Risk
• The role of the financial manager is to deal with the
uncertainty associated with investment decisions.
• Assessing the risk associated with the size and
timing of expected future cash flows is critical to
investment decisions.
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11. Cash Flow Risk
Which is the better project?
Future Cash Flows
Pessimistic Expected Optimistic
Project 1 $100 000 $300 000 $500 000
Project 2 $200 000 $400 000 $600 000
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12. Capital Structure
• A firm’s capital structure is the specific mix of debt
and equity used to finance the firm’s operations.
• Decisions need to be made on both the financing
mix and how and where to raise the money.
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13. Working Capital Management
• How much cash and inventory should be kept on
hand?
• Should credit terms be extended? If so, what are
the conditions?
• How is short-term financing acquired?
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14. Dividend Decision
• Involves the decision of whether to pay a dividend
to shareholders or maintain the funds within the
firm for internal growth.
• Factors important to this decision include growth
opportunities, taxation and shareholders’
preferences.
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15. Corporate Forms of Business
Organisation
The three different legal forms of business
organisation are:
• sole proprietorship
• partnership
• company.
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16. Sole Proprietorship
• The business is owned by one person.
• The least regulated form of organisation.
• Owner keeps all the profits but assumes unlimited
liability for the business’s debts.
• Life of the business is limited to the owner’s life
span.
• Amount of equity raised is limited to owner’s
personal wealth.
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17. Partnership
• The business is formed by two or more owners.
• All partners share in profits and losses of the
business and have unlimited liability for debts.
• Easy and inexpensive form of organisation.
• Partnership dissolves if one partner sells out or
dies.
• Amount of equity raised is limited to the combined
personal wealth of the partners.
• Income is taxed as personal income to partners.
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18. Company
• A business created as a distinct legal entity
composed of one of more individuals or entities.
• Most complex and expensive form of organisation.
• Shareholders and management are usually
separated.
• Ownership can be readily transferred.
• Both equity and debt finance are easier to raise.
• Life of a company is not limited.
• Owners (shareholders) have limited liability.
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19. Possible Goals of Financial
Management
• Survival
• Avoid financial distress and bankruptcy
• Beat the competition
• Maximise sales or market share
• Minimise costs
• Maximise profits
• Maintain steady earnings growth
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20. Problems with these Goals
• Each of these goals presents problems.
• These goals are either associated with increasing
profitability or reducing risk.
• They are not consistent with the long-term interests
of shareholders.
• It is necessary to find a goal that can encompass
both profitability and risk.
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21. The Firm’s Objective
• The goal of financial management is to maximise
shareholders’ wealth.
• Shareholders’ wealth can be measured as the
current value per share of existing shares.
• This goal overcomes the problems encountered
with the goals outlined above.
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22. Agency Relationships
• The agency relationship is the relationship
between the shareholders (owners) and the
management of a firm.
• The agency problem is the possibility of conflict of
interests between these two parties.
• Agency costs refer to the direct and indirect costs
arising from this conflict of interest.
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23. Do Managers Act in Shareholders’
Interests?
The answer to this will depend on two factors:
• how closely management goals are aligned with
shareholder goals
• the ease with which management can be replaced
if it does not act in shareholders’ best interests.
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24. Alignment of Goals
The conflict of interests is limited due to:
• management compensation schemes
• monitoring of management
• the threat of takeover
• other stakeholders.
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25. Cash Flows between the Firm and the
Financial Markets
Total Value of the Firm
Total Value of to Investors in
Firm’s Assets the Financial Markets
A. Firm issues securities
B. Firm Financial
invests in Markets
assets
E. Retained cash flows F. Dividends and Short-term debt
Current debt payments Long-term debt
Assets Equity shares
Fixed C. Cash flow from
Assets firm’s assets
D. Government
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26. Financial Markets
• Financial markets bring together the buyers and
sellers of debt and equity securities.
• Money markets involve the trading of short-term
debt securities.
• Capital markets involve the trading of long-term
debt securities.
• Primary markets involve the original sale of
securities.
• Secondary markets involve the continual buying
and selling of issued securities.
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27. Structure of Financial Markets
F in a n c ia l M a r k e t s
M o n e y M a rk e t C a p it a l M a r k e t
P r im a r y M a r k e t S e c o n d a ry M a rk e t P r im a r y M a r k e t S e c o n d a ry M a rk e t
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28. Two-period Perfect Certainty Model
• Explains the behaviour of firms and individuals.
• Relies on three assumptions:
– perfect certainty
– perfect capital markets
– rational investors.
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29. Two-period Perfect Certainty Model
• The certainty model uses two periods—now
(period 1) and the future (period 2).
• Individuals make consumption choices based on
their tastes and preferences and the investment
opportunities available to them.
• Utility curves represent indifference between period
1 (consume now) and period 2 (invest now,
consume later) consumption.
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30. Utility Curves
Period 2
Utility curves
q
p Period 1
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31. Representation of Opportunities
• Opportunities facing firms in a two-period world
include:
– investment/production
– payment of dividends.
• The production possibility frontier represents
attainable combinations of period 1 (pay dividend
now) and period 2 (invest now, pay dividend later)
dollars from a given endowment of resources.
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32. Production Possibility Frontier
Period 2
210
Production possibility
frontier
160
100 150 Period 1
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33. Utility Maximisation
• Firms should invest funds until they reach a point
on the production frontier that is just tangential to
the market line.
• This then places the owner on the highest possible
utility curve given the resources available.
• At this point, the owner’s utility is maximised.
• However, a problem exists if there is more than
one owner.
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34. Solution for Multiple Owners
• Introduce a capital market—resources can be
transferred between the present and the future.
• Add the market line.
• This produces an optimal investment policy where
production possibility frontier is tangential to the
market line.
• Consumption decisions can be made using the
capital market.
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36. Fisher’s Separation Theorem
In a perfect capital market, it is possible to
separate the firm’s investment decisions from the
owners’ consumption decisions.
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37. The Investment Decision
• The point of wealth and utility maximisation for all
shareholders can be reached through one of two
rules:
– Net present value rule: invest so as to maximise the net
present value of the investment.
– Internal rate of return rule: Invest up to the point at which
the marginal return on the investment is equal to the
expected rate of return on equivalent investments in the
capital market.
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38. Implications of Fisher’s Analysis
• It is only the investment decision that affects firm
value.
• Firm value is not affected by how investments are
financed or how the distribution (dividends) are
made to the owners.
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