BFN 110 Lecture Notes - Lecture 1: Tunxis Community College, Cash Flow, Capital Structure

• School: Tunxis Community College
• Department: Business – Finance
• Course: BFN 110
• Professor: garside

Document Summary

Corporate finance basic theories and ideas of finance. Investments financial assets such as shares and bonds. Financial institutions firms dealing in financial matters. International finance covers the above areas in a global context. Some questions a business needs to answer: The answers are provided by the financial manager. Distinguish the goal of financial mgmt. from other corporate goals. Aim of the financial manager is to maximise shareholder wealth. Profit maximisation is not an appropriate goal. Profit measures are dependent on accounting standards. Other goals, such as maximisation of sales, are also not appropriate. Understand the basic types of financial mgmt. decisions. Dollar amount of the actual cash flow received or paid out. When cash flow is received r paid out time value of money. Amount of uncertainty investors require higher returns for higher risk. Most important decision incorrect decisions are costly to reverse. Evaluate size, time and risk of cash flows. Select assets that create most shareholder wealth.