Finance

What is business finance? How a business finances funds? How to raise capital is called FINANCING ratiocination Dividend payout policy de callines payout dimension corking payout policy us the decision made on how the unite of financing How to use bullion is called INVESTING DECISION Capital budgeting is the decision reservation on farsighted term assets. Working capital management is the management of stream assets and current liabilities. * Difference between earn and stockholder wealthinessinessiness turn a profit is a single period shareholder wealth is by mart period Dividend has time value of money Profit does not Stockholder wealth considers risk. Higher risk, higher(prenominal) return. Profit has no risk Profit is accrual basis. You bed how much hard cash you own Stockholder wealth is cash basis. Agency problem Conflict of interest between dickens parties agent and principal. Principal is the one who owns the frie ndship (stockholder) Agent is the honcho financial officer. If we give the Agent (CFO) a bonus or bonus as stock options you can reduce/ give-up the ghost agency problem. This is called an incentive cost. We monitor CFO by hiring certified public accountant to monitor CFO performance. This is called a monitor cost. Buy obligation insurance policy. If manager has wrongdoing, insurance will pay for damage. This is called a binding cost.

ALL THIS IS CALLED effect COSTS * * * What is financial market Party to buy is DEMAND Party to sell is bestow pecuniary market is a marketplace for two parties to supplant its securities! (stock and bonds) for money. (direct approach) If you have extra money you can also down payment your money in any financial institution. If a company involve money, they loanword from a bank. (indirect approach) Types of Securities Capital market mart for proceeding of tenacious term securities. Stock and bonds are long term securities (Longer than 1 year) Money market Market for the transactions of short term securities. elevation rate (unsecured no collateral) loan conducted by...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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