FIN 300 Final: FIN300 FINAL EXAM CRIB SHEET

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Corporation-a business created as a distinct legal entity owned by one or more individuals or entities. Money(deposits, collateral loans) vs. capital markets(stocks and bonds) Primary (newly issued securities) vs. secondary(securities already issued in primary market) markets. Marginal(the percentage paid on the next dollar earned) vs. average(the percentage of your income that goes to pay taxes. Financial institutions act as intermediaries between suppliers and users of funds. Indirect finance earn interest on the spread between loans and deposits. Direct finance service fees (i. e. bankers acceptance and stamping fees) Agency relationship-principal hires an agent to represent their interests. Stockholders (principals) hire managers (agents) to run the company. Agency problem-conflicts of interest can exist between the principal and the agent. Agency costs-direct agency costs & indirect agency costs. Cash flow from assets (cffa) = cash flow to. Cash flow from assets = operating cash flow net. Operating cash flow (i/s) = ebit + depreciation taxes.

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