ECON 205 Lecture Notes - Lecture 7: Chief Executive Officer, Sole Proprietorship, Investment Banking
Document Summary
Lecture 7: firms, stock market and corporate governance. ***remember problem sets on course documents and make sure you study for exam next period. Read chapter 8 and study notes, don"t forget problem sets. How firms are run: organized, obtain financing, convey info to public, whether they act in the best interest of their owners. As such, the banks are acting as financial intermediaries, permitting indirect finance of the firm by their savers: indirect finance: a flow of funds from savers to borrowers through financial intermediaries such as banks. This helps to ensure that bonds are substantially less risky financial securities to hold than stocks: making the connection: conflicts of interest in credit-rating. Agencies: the three-main credit-rating agencies (moody"s, standard and. But it also reflects the confidence of investors in the firm"s ability to make those payments. Costs; economic profit = (accounting profit) implicit.
