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Lecture 1: Introduction to corporate finance decision. (The Financial…
Lecture 1: Introduction to corporate finance decision.
What is corporate finance?
Liquidity
Choose Source of Financing for Invesment
Invesment
Ensure you have enough cash and inventory
Financing
Choose Best Project
Balance Sheet Model
A=L+E
The Financial Manager
Responsible for Investment Decision
Responsible for Finance Decision
Responsible for Short Term Planning
Oversee Accounting and Audit Function in Firm
Ensure the financial Welfare Of Firm
Goals
Maximise Value of Owner's Equity
Manage Risk
Avoid financial distress
Maximise Share Price
What Are Financial Markets
Monet Markets
Short-term
Debr
Capital Markets
Long-term
Debt _ Equity
Primary V Secondary Market
Primary Markets
Securities are sold to investor
Money that is raised go to firm
First share issue is called an initial public offering (IPO)
Second share issue is call a seasoned offering
Secondary Markets
Investors trade securities withe each other
Money that is raised go to seller of securities
Share Prices