GBDA 102 Lecture Notes - Lecture 5: Angel Investor, Corporate Finance, Cash Flow

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Class 5
Multiple choice and short answers
oShort answers is 1-3 sentences on understanding
1.5 hour (starts at 2:00)
from 1st class to todays class
unless we didn’t have time to look over the slide in class, everything in class will be
covered on the exam
Notes – International Financial Markets and Foreign Exchange
read pg 262-268
read the PDF on learn for financial stuff
Basics of corporate finance
oCan have employees or shareholders
oOutside board members could sit inside the board of directors that isn’t in the
industry, but offers insight
oBoard of directors make the decisions, exec officer implements them
oMainly focus on the CFO branch
Two direct branches; controller (accounts receivable, getting money on
time, etc.), and treasurer (managing the money side of the company, how
can they get money, eg. what is the best way to build a factory, and
where would we get the money for that from?)
Make investment decisions (build a new factory or not, or what to
do with excess cash, purchase other stocks?)
Make financing decisions (do I invest money?)
Manage cash flow for operating activities (important, some
companies may say they have profit but not collect the money in
Financing decisions (balance sheet = assets vs. liabilities and
oCorporate financing
Preferred stocks – there is no say on the major decisions of the
company, only get a dividend, if the company goes bankrupt
preferred stocks get to claim the asset sooner than common stock
Common stocks – shares entitling their holder to dividends that
vary in amount (and may even be missed), depending on the
fortunes of the company
A private company can seek funding for equity from:
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