Managerial Finance FIN515 Homework1 Mini case (a) Corporate Finance Investors provide enough funding for corporations to make quality goods and services that are highly valued by costumers and enables growth of the corporation. So managers’ primary goal is to generate enough cash to distribute compensation to investors. Understanding corporate finance allows managers to make monetary decisions that achieve the goal of adding value for investors and thus contribute to a company’s competitiveness
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Finance can be through of as the study of the following 3 questions: 1. In what long-term assets should the firm invest? (Capital budgeting) 2. How can the firm raise cash for required capital expenditures? (Capital structure) 3. How should short-term operation cash flows be managed? (Working capital management) Forms of business organization: * Proprietorship- single owner * Partnership- more than one owner * Corporation- legal entity separate and distinct form its owners
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instruments are exchanged or traded and helps in determining the prices of the assets that are traded in and is also called the price discovery process. 1. Organizations that facilitate the trade in financial products. For e.g. Stock exchanges (NYSE, Nasdaq) facilitate the trade in stocks, bonds and warrants. 2. Coming together of buyer and sellers at a common platform to trade financial products is termed as financial markets, i.e. stocks and shares are traded between buyers and sellers in
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you have so much of it • The only source of capital is savers. If somebody can't save, they have no investment potential • Savers become investors. Investors can be retail (like you and I investing our extra earnings), institutions (like pension funds, insurance companies) or foreign investors (like other investors in other countries investing their savings in our country) Users of Capital 1) Individuals use capital when they buy a house and need mortgage because they don't have all the money
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system of internal controls. In addition, our firm researched the regulation regarding publicly traded firms in order to provide you with the most current information. Securities and Exchange Commission. “Official U.S. Agency Web Site.” Web. 24 September 24, 2011. Publicly traded corporations are required to implement the guidelines of the Sarbanes-Oxley Act of 2002. This means that publicly traded companies must include a management report on the internal controls of the company. The annual
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started informally on an over the counter basis in 1987 and Rand Merchant Bank fulfilled the clearing house role (Alexander: 1996). According to Alexander, the Johannesburg Stock Exchange (JSE) together with commercial banks combined to set up a formal futures exchange and the South African Futures Exchange (SAFEX) exchange was eventually formed and opened for business on 30 April 1990. The Johannesburg Stock Exchange’s equity derivative section began operating in 1990 facilitating the trading of financial
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promotion of savings and investment and efficient allocation of funds among competing uses. Participants in the capital markets are many. They include the commercial banks, saving and loan associations, credit unions, mutual saving banks, finance houses, finance companies, merchant bankers, discount houses, venture capital companies, leasing companies, investment banks, investment companies, investment clubs, pension funds, stock exchanges, security companies, underwriters, portfolio-managers, and insurance
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Background of the study: Mutual fund industry in India attaining maturity Even though the capital market attracts people there are several problems associated with it. While investing directly in to capital market one to be careful to judge the valuation of the stock and understand the complexities involved in the stock price fluctuations. So, a person with moderate knowledge of capital market generally prefers to invest in mutual funds. In recent times mutual fund industry in India is growing
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debit cards or credit cards, instead. Commercial banks also make loans that individuals and businesses use to buy goods or expand business operations, which in turn leads to more deposited funds that make their way to banks. If banks can lend money at a higher interest rate than they have to pay for funds and operating costs, they make money. Banks also serve often under-appreciated roles as payment agents within a country and between nations. Not only do banks issue debit cards that allow account
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USD 400,000 in excess cash. In the equity capital markets, equity securities, commonly known as shares of stock, are traded. Most equity securities are common stock, which does not oblige the issuer to pay dividends or to make any other payments. Equity securities are very long-term in nature and represent ongoing, perpetual ownership interest. Long-term debt securities are traded in the debt capital markets. A debt security, such as a bond or note, is a long-term contractual obligation whereby the
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