Principle of finance.txt

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Author:
jtibble
ID:
125300
Filename:
Principle of finance.txt
Updated:
2011-12-29 10:37:48
Tags:
finance
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Description:
chapter one principle finance key information
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  1. Adv n disadv of different forms of business organization
    • advantages:
    • disadvantages:
  2. Explain the link between stock price, intrinsic value, and executive compensation
  3. Importance of business ethics & consequences of unethical beh
  4. potential conflicts b/t stockholders & managers & b/t stockholders & bondholders? Techniques used to mitigate potential conflicts
  5. Explain role of finance & different types of jobs?
  6. Define sarbanes-oxley act
    Law passed by congress that requires ceo and cfo to certify that their firm's financial statement are accurate
  7. define proprietorship
    Unincorporated business owned by one individual
  8. define partnerships
    Unincorporated business observed by two or more persons
  9. define corporations
    Legal entity created by a state, separate and distinct from its owners and managers, having unlimited life, easy transferability of ownership, and limited liability
  10. define S corporation
    Special designation that allows small businesses that meet qualifications to be taxed as if they were a proprietorship or a partnership rather than a corporation
  11. define limited liability co(LLCs)
    New type of organization that is a hybrid b/t a partnership and a corporation
  12. Define limited liability partnership(LLPs)
    Hybrid b/t partnership and corporation used for professional firms in acct, law, & architecture. Has limited liability like corporations but taxed like partnerships
  13. Define stockholder wealth maximization
    Primary goal for managers of publicly owned co implies that decisions should be made to maximize the long run value of firms common stock
  14. define intrinsic value
    Estimate of a stocks true value based on accurate risk and return data. Estimated but not measured precisely
  15. define market price
    Stock value based on perceived but possibly incorrect info as seen by marginal investor
  16. define marginal investor
    Investor whose views determine the actual stock price
  17. Define equilibrium
    Actual market price equals the intrinsic value, so investors are indifferent b/t buying or selling a stock
  18. define business ethics
    Company's attitude and conduct towards employees, customers, community, and stockholders
  19. define corporate raider
    Individual who targets a corporation for takeover because it is undervalued
  20. define hostile takeover
    Acquisition of a company over the opposition of its management

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