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14 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Finance |
The business function of planning, obtaining, and managing the company's funds to accomplish it's objectives as effectively and efficiently as possible Max overall worth Meeting expenses Investing in assets Increasing profits to shareholders. |
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Financial managers |
The executives who develop and carry out their firms financial plan and decide on the most appropriate sources and uses of funds. |
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Order of Financial Managers |
CEO 》CFO 》VP of Financial Planning, Treasurer, Controller |
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RISK- RETURN TRADE-OFFS |
The process if maximizing the wealth of the firms shareholders by striking the right balance between risk and return. |
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Short term assets examples |
Cash Marketable securities A/R Inventory |
Current assets |
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Debt Capital |
Consists of funds obtained through borrowing |
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Equity Capital |
Consists of funds provided by the firms owners when they reinvest their earnings, make additional contributions, liquidate assets, issue shares to the general public, or raise capital from outside investors. |
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What is the goal of leverage and capital structure decisions? |
Increasing the rate of return on funds invested any borrowing funds. |
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Short term funds |
Current liabilities, less expensive, volatile interest rates |
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Long terms funds |
Long term bell debt and equity Used for long term assets |
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Short term funding options |
Trade credit Short term loans Commercial paper |
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5 sources of long term financing |
Public sale of shares and bonds Private placements Venture capitalists Private equity funds Hedge funds. |
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Why would a firm prefer to sell its bonds through private placement rather than an initial public offering? |
It is often cheaper for the firm to sell securities privately. |
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How do financial managers evaluate mergers acquisitions and other opportunities |
Comparing costs and benefits - tender offer - leveraged buyouts (LBOS) - divestiture: selloff; spinoff
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