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Details Title: Essesntials of corporate finan Description: exam 1 CU Boulder Total Flash Cards: 10 Created: 02/11/2008 14:19:08	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term capital budgeting Definition the process  of planning and managing a firms long term assets Term capital structure Definition the mixture of debt and equity maintained by a firm Term working capital Definition a firms short term assets and liabilities such as inventory and money owed to suppliers. some questions that must be answered:how much cash inventory to keep on hand? should we sell on credit to customers? how will we obtain short term financing? Term Definition Term sole proprietorship Definition simple and least regulated type of organization owned by a single individual.The owner keeps all profits but is also subject to unlimited liability and all income is taxed as personal income. Term partnership Definition similar to a sole propreitorship but there are 2 or more owners who share liability as well as gains or losses. A limited partnership has one or more partners with unlimited liability and limited partners whos liability only extends to the contributed amount. Term corporation Definition a business created as a legal "person" seperate and distinct from its owners, and has as many right, duties, and privileges as an actual person. forming a corp requires the forming of articles of incorporation and a set of bylaws. Term what is the goal of financial management in a Corp. Definition to maximixe the current value per share of an existing stock and maximize the market value of existing owners equity. keep in mind long term vs. short term Term agency relationship Definition the relation between the stockholders and management Term agency problem Definition the possibility of conflict of interest between the owners and the management of a firm