MGMT640 – Textbook Notes PART 1 FUNDAMENTALS OF CORPORATE FINANCE Chapter 1 – The Financial Manager and The Firm 1.1 The Role of the Financial Manager * financial manager should make decisions that maximize value of owners stock/wealth – wealth is the economic value of the assets someone possesses * stakeholders – anyone other than an owner (stockholder) with a claim on the cash flows of a firm‚ including employees‚ suppliers‚ creditors‚ and the government * productive
Premium Generally Accepted Accounting Principles Balance sheet
Louisiana Purchase I believe that the Louisiana Purchase was one of the greatest impacts on American society because of the large amount of land and how it helped our economy. In this report you will see how lucky that the United States is to have obtained this large piece of land from France. Their are many reasons why Napoleon had to sell this large piece of land. Napoleon thought that this land could be a great asset to the French if they knew what to do with it. He didn’t
Premium Tax Investment Income tax
Australia’s foreign debt In recent years‚ Australia’s debt to the rest of the world has increased‚ and grew on average by 6.1% per year between June 1999 and June 2009‚ increasing from $15‚400 to $27‚900 in 2007-08. The growth in a country’s foreign debt can reflect several related influences. The value of its imports and other current payments to foreigners may exceed the value of its exports and other current receipts from foreigners‚ is this is the case then the nation experiences a deficit
Premium Debt Investment Macroeconomics
Managerial Actions to Maximize Shareholder Wealth What types of actions can managers take to maximize shareholder wealth? To answer this question‚ we first need to ask‚ “What determines a firm’s value?” In a nutshell‚ it is a company’s ability to generate cash flows now and in the future. We address different aspects of this in detail throughout the book‚ but we can lay out three basic facts now: (1) Any financial asset‚ including a company’s stock‚ is valu- able only to the extent that it generates
Premium Stock market Finance Free cash flow
present in the stories “What‚ of This Goldfish‚ Would You Wish?”‚ “The Wife’s Story”‚ and “My So-Called Enemy” as they all have to do with the way relationships affect us. In the short story “What‚ of This Goldfish‚ Would You Wish?” by Etgar Keret the main character Sergei acts consistently with his three wishes. Each time he uses a wish he uses it to help someone else. In the middle of the story it is explained that he used his first two wishes for good. He unintentionally harms a young photographer
Premium Psychology Interpersonal relationship Sociology
Valuation of equity Example based on dividend discount model : Vardhman limited’s earnings and dividends have been growing at a rate of 18% per annum. This growth rate is expected to continue for 4 years. After that the growth rate will fall to 12 % for the next 4 years. Thereafter‚ the growth rate is expected to be 6 % forever. If the last dividend per share was RS. 2.00 And the investor’s required rate of return on verdhman’s equity is 15% what is the intrinsic value per share? Step 1: the
Premium Generally Accepted Accounting Principles Investment Stock
conceptually interpret the meaning of the proposition. Note: you should be able to formally prove MM 1 & MM2 as we did in class. Question 2. Levered Inc. and Unlevered Inc. are identical in every respect except for capital structure. Both companies expect to earn $150 million in perpetuity‚ and both distribute all of their earnings as dividends. Levered’s perpetual debt has a market value of $300 million and the required return on its debt is 7%. Levered’s stock sells for $100 per share‚ and there
Premium Stock Stock market Finance
FUNDAMENTALS OF Corporate Finance Jonathan Berk Stanford University Peter DeMarzo Stanford University Jarrad Harford University of Washington ISBN 0-558-65200-X Fundamentals of Corporate Finance‚ by Jonathan Berk‚ Peter DeMarzo‚ and Jarrad Harford. Published by Prentice Hall. Copyright © 2009 by Pearson Education‚ Inc. Editor in Chief: Donna Battista Sr. Development Editor: Rebecca Ferris Market Development Manager: Dona Kenly Assistant Editors: Sara Holliday‚ Kerri McQueen Managing
Premium Corporation Limited liability company Stock market
far received little attention in the literature. We hypothesize that better and more reputable managers are able to convey the intrinsic value of their firm more credibly to outsiders‚ thus reducing the information asymmetry facing their firm in the equity market. Given this‚ firms with better and more reputable managers will have more access to the equity market‚ so that we expect lower leverage ratios for these firms. In addition‚ they will have less need to signal using dividends‚ so that they will
Premium Factor analysis Management Stock
Throughout American history‚ land‚ expansion‚ and the conquering of new territories has played an integral role in the development of economics‚ politics‚ and even led to bloody conflicts. When America first gained their independence on July 4‚ 1776‚ the nation consisted of only the 13 states that had recently separated themselves from Great Britain. Since then America has grown to 50 states‚ however this expansion came at a cost. American expansion had huge impacts on the development‚ and ultimate
Premium Slavery in the United States American Civil War Compromise of 1850