COMM 2202 Lecture Notes - Lecture 1: Sole Proprietorship
13 Dec 2018
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Document Summary
3 forms of business organizations: sole proprietorship, partnership (general and limited, corporation (private or public) Primary goals of financial management: maximize shareholders" wealth, maximize stock price, maximize rm value. Social responsibility: investors are demanding that corporations behave responsibly - treating the community, customers, employees, corporate governance, environment, human rights. Ethical investing: an investor may choose not to invest in a company due to the nature of their operations (ie. the alcohol, gaming, tobacco industries) Role of financial markets in corporate finance: cash ows to and from the rm, money vs. capital markets, primary vs. Financial institutions act as intermediaries between suppliers and users of funds. Institutions earn income on services provided: indirect nance - earn interest on the spread between loans and deposits, direct nance - service fees. Liabilities are listed in order of claim on assets. Underlying fundamental principle of nance: valuing things (determining value) - stocks, company, equipment. Present value = total amount of future cash flow.
