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ECON 2560 Lecture 2: Chapter 1 & 2 - FALL 2015

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coralpanda340
24 Sep 2015
School
University of Guelph
Department
Economics
Course
ECON 2560
Professor
Nikola Gradojevic

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Document Summary

In order to raise money for the investments and operations of the firm, the financial manager can resort to: internally generated funds, external financing sources, two broad categories of external financing, debt financing, equity financing, the choice between these two external sources is the subject matter of capital structure decision, real assets: assets used to produce goods and services, tangible assets, financial assets: financial claims to the income generated by the firms real assets, ex. 1. 2 what is a corporation: a legal entity that allows the owners to have limited liability, shareholders are owners, but the corporations are run by the employees led by the ceo, although the separation of ownership and control adds flexibility to the operation, gives permanence to the corporation, it also creates the agency problems, corporations are the dominant form of business in the modern day.

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