Term
|
Definition
| The economics of time and risk |
|
|
Term
|
Definition
| The study of the allocation of scarce resources, or, the study of how people (acting individually or through the businesses and governments they form) make decisions regarding the production and use of scarce resources |
|
|
Term
|
Definition
| an approach to the study of finance that integrates the financial decisions of business firms within a logical framework |
|
|
Term
|
Definition
| the process of placing a value on, or determining the worth of, resources such as buildings, ideas, and equipment. The central process of finance |
|
|
Term
|
Definition
| A distinct legal entity defined by the contracts between individuals such as owners, workers, creditors, suppliers, consumers, those in the surrounding communities, and those in all levels of government |
|
|
Term
|
Definition
| A type of business organization in which an individual, acting along, conducts business. Because the individual does not create a formal business organization agreement, the legal rights and responsibilities are equal to someone who owns a business. |
|
|
Term
|
Definition
| A type of business organization formed when two or more people join together to conduct business. No contract needed, but they will make a legal agreement doling out responsibilities |
|
|
Term
|
Definition
| Protection for the owners of a corporation against losing more than their original investment |
|
|
Term
|
Definition
| Everything that can produce value for the firm, including buildings, equipment, land, patients, inventories, and cash |
|
|
Term
|
Definition
| Obligations of the firm including accounts payable, bank loans, and bonds. Also called Liablities. People who hold these claims are bondholders, creditors, or debtholders |
|
|
Term
|
Definition
| The difference between the value of assets and the value of debt. The equity of the firm is its common stock, and shareholders, stockholders, and equityholders hold equity. |
|
|
Term
|
Definition
| Values that the marketplace would place on items. Market values contrast with historical values, which are the values placed on items when they were originally purchased |
|
|
Term
|
Definition
| Cash that leaves or comes into the company. Net Cash flow is the difference between the inflow and outflow |
|
|
Term
|
Definition
| Simplifies problems and is a way of interpreting observations. Not reality. |
|
|
Term
| Stakeholder view of the corporation |
|
Definition
| The view that the corporation can be influenced by--and therefore to some extent owned by-- anyone who has a stake in the corporation's actions |
|
|
Term
| Shareholder wealth maximization |
|
Definition
| The financial objective of the corporation. This objective states that shareholders, as owners of the corporation, desire the market value of their equity to be as high as possible |
|
|
Term
|
Definition
| A relationship in which one or more persons (the principal) contract with one or more persons (the agent) to preform a decision-making task for them. In the case of corporate finance, the shareholders=principals, the managers=agents |
|
|
Term
|
Definition
| Resources utilized to align managerial goals with shareholder goals |
|
|
Term
| Positive Marginal Utility |
|
Definition
| people prefer more wealth to less wealth. Wealth is the sum of the values of all things that are owned. |
|
|
Term
|
Definition
| The ability to make certain decisions separately or independently from the preferences or tastes of the beneficiary |
|
|
Term
| Diminishing Marginal Utility |
|
Definition
| More and More units of consumption create less and less happiness when compared with previous units of consumption |
|
|
Term
| diminishing marginal return |
|
Definition
| An economic principle whereby, at some point, the commitment of additional resources becomes detrimental to the firm with the result that the firm is forced to limit its investment to some optimal level |
|
|
Term
|
Definition
| the market value of a combination of commodities must be equal to the sum of the market values of all the commodities in the combination |
|
|
Term
|
Definition
| establishing right and wrong conduct for situations within a corporate or business enviroment |
|
|
Term
|
Definition
| All benefits and/or costs from an activity that are experienced by people other than those directly involved in the transaction |
|
|
Term
|
Definition
| An approach to the study of ethics whereby ethical decisions are applied based upon whether or not something is viewed as being good for society |
|
|
