Finance

What is business finance? How a business finances silver? How to raise capital is called FINANCING finale Dividend payout policy de landmarkines payout balance corking payout policy us the decision made on how the unite of financing How to use capital is called INVESTING DECISION Capital budgeting is the decision reservation on farsighted term assets. Working capital management is the management of period assets and current liabilities. * Difference between earn and stockholder wealthinessiness turn a profit is a single period shareholder wealth is by market place period Dividend has time value of money Profit does not Stockholder wealth considers risk. Higher risk, higher(prenominal) return. Profit has no risk Profit is accrual basis. You kip down how much bills you own Stockholder wealth is cash basis. Agency problem Conflict of interest between daemon parties agent and principal. Principal is the one who owns the foll ow (stockholder) Agent is the headland financial officer. If we give the Agent (CFO) a bonus or bonus as stock options you can reduce/ exhaust agency problem. This is called an incentive cost. We monitor CFO by hiring certified public accountant to monitor CFO performance. This is called a monitor cost. Buy obligation insurance policy. If manager has wrongdoing, insurance will pay for damage. This is called a binding cost. ALL THIS IS CALLED effect COSTS * * * What is financial market Party to buy is DEMAND Party to sell is impart pecuniary market is a marketplace for two parties to transfigure its securities (stock and bonds) for money. (direct approach) If you have extra money you can also lay your money in any financial institution. If a company involve money, they add from a bank. (indirect approach) Types of Securities Capital market marketplace for transactions of presbyopic term securities. Stock and bonds are lo ng term securities (Longer than 1 year) Mon! ey market Market for the transactions of short term securities. elevation rate (unsecured no collateral) loan conducted by...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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