COMM 121 Study Guide - Midterm Guide: Annual Percentage Rate, Cash Flow, Net Present Value
18 Oct 2013
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Finance the study of how and under what terms savings (money) is allocated between lenders and borrower. Capital budgeting (capital expenditure) the process of making and managing expenditures on long lived assets. Capital structure represents the proportions of the firm"s financing from current and long term debt and equity (think of the firm like a pie, composed of debt and equity) Creditors the persons or institutions that buy debt from the firm. Debt and equity are contingent claims on the total firm value. Arbitrage exploiting price differences to earn riskless profit. The gap between both rates will be closed quickly. i. e. seinfeld video in class travelling across state border to get more money for beer cans. Sole proprietorship a business owned by one person. Cheapest to own, no corporate income taxes, unlimited liability, the life extends over the length of the sole proprietor, equity money limited to proprietor"s personal wealth.
