Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
18 Cards in this Set
- Front
- Back
|
capital budgeting
|
planning/managing firms long term investments. identify opportunities worth more to the firm than they cost to acquire
|
|
|
capital structure
|
mix of long term debt and equity the firm uses to finance its operation->how much should they borrow and least way to borrow.->how to pay assests with debt or equity?
|
|
|
working capital
|
firms short term assests(inventory and short term liabilaties). manage day to day finances
|
|
|
advantahges of sole propritorship(4)
|
1.easy to start
2.least regulated 3.all profits to owner 4.taxed once as personal income |
|
|
disadvan of sole propiertorship(4)
|
1.limited to life of owner
2.equity to capital to owners personal wealth 3.VERY liable 4.difficult to sell interest |
|
|
advan of partnership(3)
|
1.2 or more owners
2.more capital to start 3.taxed once as personal income |
|
|
disadvan of partnership
|
1.unlimited liabilaty
2.1 partner dies or sells=done 3.difficult to transfer |
|
|
general and limited partnership
|
g-all parties liable
lim-1 has limited liabilaty |
|
|
corp. advantages
|
1.limited liabilaty
2.unlimited life 3.seperation of owner/management 4.transfer is easy 5.easy to raise capital 6.things go bad->owners arent resonsible besides assets |
|
|
corp. disadvantages
|
1.sep of ownership/management
2.double taxation-income @corporate rate and dividends @personal rate |
|
|
taxation of c-corp/s-corp
|
c-corp: taxed as whole
s-corp: each taxed individually |
|
|
goal of corp.
|
maxamize current value of companies stock
|
|
|
agency problem
|
corp. does things in favor of stockholders not employees
|
|
|
stake holder
|
other than a stock holder or creditor who has a potential claim on the cash flow
|
|
|
financial market
|
bringing buyers/sellers together where debt and equity is bought and sold
|
|
|
primary markets
|
selling securities to general public
|
|
|
secondary markets
|
one or more owner or creditor selling to another after the orginal sale
|
|
|
sarbox act
|
management must tell truth about their financial reportings
|
