UGBA 10 Lecture Notes - Lecture 2: Netflix, Peter Thiel, Unsecured Debt

• School: Berkeley
• Department: Business Administration Undergraduate Program
• Course: UGBA 10
• Professor: Omar Romero-Hernandez

Document Summary

Agenda: understand different roles of, debt as source of business financing, equity as source of business financing. B: sequence of equity funding, key equity indicators, yield, pe ratio, market capitalization. Basic business financing: what is a company or firm, companies or firms are business orgs which sell goods or services w/ aim of making a profit, ex. Remember debt or borrowing is reapdi by paying back the amount borrowed. 3: equity gets the reamingin value which could be huge a) It"s this upside potential that makes equity attractive as a long term investment: debt vs equity- summar. Legal right to be repaid adn to get integers for that. No legal right to be repaid but get"s what is residual . From lender"s (bank"s) pov: lower risk, lower reward. From stock investor"s pov: high risk high reward. From borrower"s (company"s pov: risk of bankruptcy (bk) if they. No risk of bk as dividends do can"t pay the interest.