ENGL 112 Lecture Notes - Lecture 6: Initial Public Offering, Net Present Value
Document Summary
How to make informed financial decisions with net present value (aka the worth of a dollar today) Need to adjust for inflation, interest and risks. Interest: what you earn in a bank account over time indicates the value of your money in the bank. Issue shares & pay dividends, borrow money from bank (long-term) Grow the business: acquire assets, equipment, invest to make more money. Equity and debt (the two main instruments or securities ) Equity: shares or share-based securities (e. g. , warrants, options) Debt: debt issued by a company or government; they promise to repay the holder the principal with a fixed amount of interest. Ways to use the funds: inventory, factory, employee payroll, loan interest, shareholder dividends, leasing / space cost rent, real estate, etc. These all happen in capital market where the sellers and buyers are in a public market / forum.
