Management and Organizational Studies 1023A/B Lecture 6: Introduction to Finance L6

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Barry Hawn

Document Summary

Securities and corporate law and the institutions that facilitate and monitor this exchange of funds: the goal of the firm is to create value for the firm"s shareholders. Maximizing the price of the existing common stock . Good financial decisions will help increase stock price and poor financial decisions will lead to a decline in stock price: management serves as an arbitrator and moderator between conflicting interest groups or stakeholders and objectives. Creditors, managers, employees and customers hold contractual claims against the company. Shareholders have residual claims against the company: the role of finance in business hree basic issues addressed by the study of finance: What long-term investments should the firm undertake? (capital budgeting decision) . How should the firm raise money to fund these investments? (capital structure decision) . How to manage cash flows arising from day-to-day operations? (operating decision) . All the decisions among the one day: principles of finance.