Finance Mini Case - 1135 Words

a. Why is corporate finance important to all managers? The number one goal of managers is to increase the wealth of owners or shareholders. By understanding corporate finance, managers gain the skills they need to know what strategies or tools would be best for adding value to the organization. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. Sole Proprietorship-Advantages: 1. Easily and Inexpensively Formed 2. Few government regulations 3. Not subject to corporate tax code Disadvantages: 1. Difficult to obtain large amounts of capital 2. Unlimited personal liability for the proprietor 3. The life of†¦show more content†¦j. What do we call the price that a borrower must pay for debt capital? The Interest Rate What is the price of equity capital? Dividends plus capital gains What are the four most fundamental factors that affect the cost of money, or the general level of interest rates, in the economy? 1. Production Opportunities 2. Time preferences 3. Risk 4. Expected Inflation k. What are some economic conditions (including international aspects) that affectthe cost of money? The cost of money can be influenced by federal policy, fiscal and foreign trade deficits and a specific country’s risk. l. What are financial securities? Describe some financial instruments. Financial securities are pieces of paper with contractual provisions that entitle their owners to specific rights and claims on specific cash flows or values. These may include T-Bills, negotiable CDs, Municipal Bonds, Corporate Bonds and preferred and common stocks. m. List some financial institutions. Credit Unions, pension funds, commercial banks, mutual savings, savings amp; loans, insurance companies n. What are some different types of markets? Capital Markets including stock markets and bond markets, commodity markets, money markets, futures markets, insurance markets, foreignShow MoreRelatedFinance-Mini Case1123 Words   |  5 PagesChapter 8. Mini-Case Assume that you have just been hired as a financial analyst by Triple Play Inc., a mid-sized California company that specializes in creating high-fashion clothing. Because no one at Triple Play is familiar with the basics of financial options, you have been asked to prepare a brief report that firm’s executives can use to gain a cursory understanding of the topic. To begin, you gathered some outside materials on the subject and used these materials to draft a list of pertinentRead MoreFinance Mini Case Chp112716 Words   |  11 PagesMini Case Chapter 11 a. What is capital budgeting? 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