COMMERCE 2FA3 Lecture 4: Week 2 Lecture - September 14, 2018
20 Sep 2018
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Document Summary
Companies cannot go after shareholders when they are the ones investing into the firm. Why buyers and sellers will trade stock at the same price. Different expectations (short sellers; investors who sell the stock and buy back the stock at a lower price) Different interpretation (same people but different perspective) Ex. selling stock instead of requesting a loan, people with a surplus of liquidity will be buyers, who needs cash and who has cash. Dividends (portion of earnings a firm decides to distribute to shareholders) Working capital decisions: short term assets and liabilities. Overview of financial systems (within canada: products & services. Financial assets (stocks, bonds, financial paper; things issued by banks: savings accounts, certificates and deposits) Brokerage functions: involves bring buyers and sellers together. Financial intermediation: roles played by chartered banks that become a principle. Transfer of purchasing power: from individuals to individuals or corporations: types of financial institutions (fi) Investment banks (brokerage / dealers- take positions in securities)
