FIN 3311 Chapter Notes -Corporate Finance, Sole Proprietorship, Procedural Control
Document Summary
To create firm value, there is this call for strategic financial management, that reflects the best interests of the firm. Therefore, the firm should buy assets, and only buy those assets that generate an increase in cash over its costs. Another way to create firm value is by selling bonds, stocks, or any other financial instrument that generates more cash over the costs. By partaking in such actions, the firm must stay alert of its existing cash flow quantities. Any amount of cash flows paid out to the stockholders should always be greater than the amount of cash flows placed into the firm: firm "profitability" occurs when sales exceed: Or expenses: most of the ultimate procedural control of a corporation is within the: The stockholders are the ones with the voting power. In a sole proprietorship earnings are taxed as individual income, and there are no corporate income taxes involved.
