Finance

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Outline

INTRODUCTION TO CORPORATE FINANCE
Prepared by Hoang Thi Anh Ngoc



Corporate finance and the fiscal Manager Forms of Business Organization The Goal of monetary Management The Agency Problem Financial Markets and the Corporation

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Corporate Finance
some important questions that are makeed using finance:
What long-term investments should the stiff take on? Where will we get the long-term funding to pay for the

Role of The Financial Manager
Financial maintainrs try to answer some or all of these questions

( ) (2)

( ) (1)

investment? How will we manage the everyday financial activities of the soused? th fi ?

Firm s Firms trading operations
(3)

Financial manager

(4a) (4 )

Financial markets

(4b)

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(1) C ( ) Cash raised f from investors (2) Cash invested in firm (3) Cash generated by operations (4a) Cash reinvested (4b) Cash returned to investors

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Who is The Financial Manager?
Chief Financial Officer (CEO)

Financial Management Decisions
C it l b d ti Capital budgeting What long-term investments or projects should the production line take on? Capital structure p Should we purpose debt or equity?





Treasurer
oversees cash management, credit management, expectant expenditures, and financial planning

Controller
oversees taxes, cost accounting, financial accounting and data processing

Working capital management How do we manage the day-to-day finances of the firm?

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Forms of Business Organization
Three major forms in the United States
mend Proprietorship P t Partnership hi dependable general moderate Corporation

Sole Proprietorship
Advantages Easiest to start L Least correct t l t d Single possessor keeps all the profits Taxed once as personal income Disadvantages Limited to life of owner Equity capital limited to owners personal wealth Unlimited liability hard to sell ownership interest

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