ECON 2560 Chapter Notes - Chapter 1-3: Sole Proprietorship, Public Company, Fixed Income
5 Aug 2014
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Document Summary
Capital budget decision or investment decision decisions about which real assets the firm should acquire. Financing decision- on how to raise money to pay for investments in real assets. Capital structure- a firm"s mix of long term financing. Real assets- assets used to produce goods and services (include tangible items such as machinery, factories, and offices and intangible assets such as tech knowledge, trademarks and patents) Financial assets- claims to the income generate by real assets. (securitites) (share of stock, bank load, Public company-corporation whose share are listed on stock exchange. Corporation- business owned but shareholders who are not personally liable for the business"s liabilities. Sole proprietorship- sole owner of a business that has no partners and no shareholders. Partnership- business owned by two or more people who are personally responsible for all its liabilities. Goal of the manager- maximize companies firm value by increasing the company"s shares value and the wealth of the shareholders.
