Definitions Flashcards
(31 cards)
investing decision
capital budgeting decision
identification of investment opportunities
capital investment projects
what kind of asset is brand recognition and acceptance?
intangible
financing decision
the decision on how to raise money for investments in real assets
capital structure decision
the choice to use debt or equity for long term financing
short term investing decisions
how to invest spare cash for brief periods
real assets
assets used to produce goods and services
financial assets (securities)
claims to the income generate by real assets
public corporation
shares traded on a exchange
private corporation
shares are privately owned
sole proprietorship
a business owned by 1 individual
treasurer
looks after a firms cash, raises capital and as a relationship with the banks
controller
budgeting, accounting and auditing
CFO
oversees treasurer and controller and sets financial strategy
agency problems
conflicts of interest between a firms owners and its managers
what are 2 major decisions made by financial managers
this investment decision and the financing decision
how do coorporations insure that managers and stockholders have the same goals
Compensation plans that give incentive for managers to increase value, threat of takeover, board of directors.
financial market
a market in which securities are issued and traded.
fixed-income market
market for debt securities
capital market
long term financing
money market
short term financing
financial intermediary
raises money from investors to provide financing to individuals or corporations
5 classes of financial intermediary
mutual funds, exchange traded funds, hede funds, private equity finds, pension funds
mutual
managed fund pooling savings from many investors
