Term
| 2 Most important factors effecting business/investment decisions? |
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Definition
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Term
| Indication of Growth phase |
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Definition
| receiving > 4 to 5% on investments |
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Term
| 2 Markets used to raise capital: |
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Definition
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Term
| Funds flow through what two systems? |
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Definition
| financial markets and intermediaries |
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Term
| Functions of Financial Institutions |
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Definition
1.Transport cash over time
2.Consumption smoothing
3.diversity or Risk
4.Act as a payment mechanism
5.Provide information
6.Liquidity |
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Term
| Types of information provided by Financial Institutions: |
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Definition
commodity prices
interest rates
company values |
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Term
| Synonym for Financing decisions |
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Definition
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Term
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Definition
| decision to invest in tangible or intangible assets |
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Term
| Chief task of the Financial Manager? |
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Definition
| make good investment and financing decisions |
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Term
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Definition
| how should we raise the money needed for investments |
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Term
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Definition
-How we finance, equity vs. debt
-the mix of long-term debt and equity financing |
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Term
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Definition
| assets used to produce goods and services |
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Term
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Definition
| financial claims to the income generated by the firm's real assets. |
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Term
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Definition
| shares of stock and other financial assets that can be purchased and traded by investors |
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Term
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Definition
a business organized as a separate legal entity owned by stockholders
-distinct, permanent legal entity |
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Term
| Articles of incorporation |
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Definition
-set out the purpose of the business and how it is to be financed, managed, and governed.
must conform the local state laws |
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Term
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Definition
partners are classified as either general or limited
-General:Manage and have unlimited personal liability
-Limited:Do not manage and only responsible for what they invest |
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Term
| LLC, LLP, and PC (Professional Corporation |
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Definition
| all partners have limited liability |
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Term
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Definition
anyone responsible for significant corporate investment or financing decision.
-No single person is responsible of all decisions (except small firms) |
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Term
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Definition
| responsible for financing, cash management, and relationships with banks and other financial institutions. |
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Term
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Definition
| responsible for budgeting, accounting, and taxes |
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Term
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Definition
| oversees the treasurer and controller and sets overall financial strategy |
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Term
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Definition
| managers, acting as agents for stockholders, may act in their own interests rather than maximizing value |
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Term
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Definition
| anyone with a financial interest in the firm |
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Term
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Definition
| market where securities are issued and traded |
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Term
| Synonym for Secondary Market |
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Definition
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Term
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Definition
fixed-income market
capital market
money market |
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Term
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Definition
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Term
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Definition
| market for long -term debt and equity |
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Term
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Definition
| market for short-term financing (less than 1 year) |
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Term
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Definition
| an organization that raises money for investors and provides financing for individuals, corporation, or other organizations |
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Term
| Two classes of intermediaries |
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Definition
| mutual funds and pension funds |
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Term
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Definition
| an investment company that pools the savings of many investors and invests in a portfolio of securities |
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Term
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Definition
| a private investment pool, open to wealthy or institutional investors, that is only lightly regulated and therefore can pursue more speculative policies than mutual funds. |
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Term
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Definition
| investment plan set up by an employer to provide for employees' retirement |
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Term
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Definition
| a bank, insurance company, or similar financial intermediary |
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Term
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Definition
| raise money from depositors and other investors and then make loans to businesses and individuals. |
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Term
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Definition
-do not take deposits or make loans
-Do underwrite stock offerings by purchasing new shares from the issuing company at a negotiated price and reselling the shares to investors |
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Term
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Definition
| minimum acceptable rate of return on capital investments |
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