Management and Organizational Studies 1023A/B Study Guide - Final Guide: Net Present Value, Cash Flow, Preferred Stock

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

Document Summary

The study of how and under what terms savings (money) are allocated between lenders and borrowers. Financial securities are the contracts that come in place during the transfer of funds. The goal is to create value for the shareholders by maximizing the price of common stock. Good decisions will lead to an increase in stock price, bad decisions will lead to a decline in price. Three major domestic groups: individuals (household sector), businesses and government. Net worth (or equity) is assets (what we own) liabilities (what we owe) Real assets: the tangible things that compose personal and business assets. Asset acquisition is also called capital expenditure. Financial assets: a claim that one individual or institution has on another. Financial intermediaries: entities that invest funds on behalf of others and change the nature of the transactions. Market intermediaries (brokers): entities that facilitate the working of markets and help provide direct intermediation.