MGT338H5 Lecture : Class 1 Notes
Document Summary
Let us suppose that the goal of the firm (a corporation) is to maximize shareholder value. In order to operate, the firm will need to employ some assets. Finance and accounting are used, in part, to determine whether projected corporate strategy moves are wise and to measure the results to see if they succeeded. Suppose a firm is considering 4 different projects which it may implement in the coming year. These may be to: launch a new product expand existing operations: buy some assets, buy another company, etc. Suppose the firm can invest ,000,000 today, in return for ,000/year at the end of each year for the next 5 years. The context for answering these questions is within the world of financial markets. We generally compare our investment opportunities to opportunities available in the financial markets. Financial markets include capital markets - stock markets, bond markets, commodities markets, financial derivatives markets, money markets (short-term debt), foreign exchange markets, etc.
