FIN 300 Lecture Notes - Lecture 1: Primary Market, Corporate Finance, Personal Finance
Document Summary
Hybrid combo of economics, accounting & statistics. Corporate finance, investments, personal finance, financial markets, real estate finance. Finance is at the core of everything we do in business & management. The essence: today is not = tomorrow. E. g. apple developed iphone, google purchased motorola. One individual (two or more people) own and manage the business. Bears all the costs, but keep all the net profits. No separation of business and individual (partners) Advantages: ease of establishment and lack of regulation. Disadvantages: unlimited liability that individual is personally liable for all of the firm"s liabilities (financial and legal) A business which is legally distinct from its owners, who are called shareholders. Advantages: limited liability (financial and legal), more flexible and permanent (managers and shareholders come and go, firm remains) Disadvantages: taxation (firm profits + dividends to tax payers), agency issues, regulations and costs. Income trusts: reduce or eliminate corporate taxes, distribute more cash flows to unit holders.