Essay on Financial Terms and Roles
February 10, 2014
Financial Terms and Roles
Create a list of definitions for the following terms and identify their roles in finance.
Finance: Finance or financing is the study of how people/businesses evaluate investments, raising money for the investments. Finance is a broad word with many facets. When reading the chapters I recognize finance as a learned talent. Knowing when to invest, strive ahead, or taking a chance. Business finance can be divided into three divisions; capital budget, capital structures, and working capital management. It is the management of money and the management information and how information is interpreted, both personally and …show more content…
· Stock: A portion of ownership in a corporation. The holder of a stock is entitled to the company's earnings and is responsible for its risk for the portion of the company that each stock represents. There are two main classes of stock: common stock and preferred stock. Common stock holders have the right to vote on major company decisions, such as whether or not to merge with another corporation, and receive dividends determined by management. Preferred