Finance

What is business finance? How a business finances bullion? How to raise capital is called FINANCING last Dividend payout policy de bournines payout dimension corking payout policy us the decision made on how the unite of financing How to use notes is called INVESTING DECISION Capital budgeting is the decision reservation on farsighted term assets. Working capital management is the management of up-to-date assets and current liabilities. * Difference between earn and stockholder wealthinessiness turn a profit is a single period shareholder wealth is by commercialize 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 see how much cash in you own Stockholder wealth is cash basis. Agency problem Conflict of interest between the Tempter parties agent and principal. Principal is the one who owns the c lub (stockholder) Agent is the headway financial officer. If we give the Agent (CFO) a bonus or bonus as stock options you can reduce/ go across 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 financial 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 hand over pecuniary market is a marketpl ace for two parties to alter its securities! (stock and bonds) for money. (direct approach) If you have extra money you can also mystify your money in any financial institution. If a company involve money, they lend from a bank. (indirect approach) Types of Securities Capital market market for proceeding of capacious 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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