Management and Organizational Studies 1023A/B Study Guide - Final Guide: Venture Capital, Unsecured Debt, Angel Investor

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MOS 1023A/B Full Course Notes
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MOS 1023A/B Full Course Notes
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Document Summary

Residual claims - shareholders claims contractual claims - creditors/employees claims. Capital budgeting decision - what should firm spend on in long term. Capital structure decision - how the firm should raise money. Operating decision - managing day to day cash flow. Present value - future value/ (1+ forgone interest) to the power of compounding periods. Net present value - cash inflows- cash outflows. Information efficient market - prices of securities reflect all info available to public. Agency problem - separation of management and ownership of a firm. Board of directors used to oversee management using - oversight, compliance, internal audit. Cost of capital - minimum required rate of return (average rate of return firms must pay to use creditors funds) Three domestic groups in economy - individual/ household sector. Personal assets - value of home, land and what is in it. Consumer durables - assets that last for many years e. g. cars.