Management and Organizational Studies 3370A/B Lecture Notes - Lecture 6: Life Insurance, Financial Institution, Financial Statement

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3370A/B
• Professor: Maria Ferraro

Document Summary

Finance: the science or study of the management of funds: how and under what terms the money (savings) is allocated between lenders and borrowers. Good financial decisions will help increase stock price and poor financial decisions will lead to a decline in stock price. Ex. we cannot refuse to pay the employees to pay the dividends to the shareholders. Cant decide not to give warranties claim to the customers in order to make the share holders richer. The role of finance in business: three basic issues addressed by the study of finance, what long-term investments should the firm undertake? (capital budgeting decision, long term investment decision, what type of project should i invest in; ex. Buy a factory, buy a new piece of equipment, should i merge with another company, should i buy another company: how should the firm raise money to fund these investments? (capital structure decision, finance decisions, ex.