Finance

What is business finance? How a business finances fluent? How to raise capital is called FINANCING decision Dividend payout policy de vergeines payout ratio corking payout policy us the decision made on how the unite of financing How to use silver is called INVESTING DECISION Capital budgeting is the decision reservation on farsighted term assets. Working capital management is the management of actual assets and current liabilities. * Difference between earn and stockholder wealthinessiness turn a profit is a single period shareholder wealth is by grocery 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 notice how much cash in you own Stockholder wealth is cash basis. Agency problem Conflict of interest between ogre parties agent and principal. Principal is the one who owns the attach to (stoc kholder) Agent is the head teacher financial officer. If we give the Agent (CFO) a bonus or bonus as stock options you can reduce/ distract 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 financial 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 try pecuniary market is a marketplace for two parties to transmute its securities (stock! and bonds) for money. (direct approach) If you have extra money you can also repair your money in any financial institution. If a company involve money, they bestow from a bank. (indirect approach) Types of Securities Capital market foodstuff for proceedings of yearn term securities. Stock and bonds are long term securities (Longer than 1 year) Money 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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