Chapter 1_connect_finance

When a corporation uses the financial markets to raise new funds, the sale of securities is made in the primary market
The internationalization of the financial markets has allowed firms such as McDonald’s to raise capital around the world.
The Sarbanes-Oxley Act was passed in an effort to control corrupt corporate behavior.
Insider trading occurs when someone has information not available to the public which they use to profit from trading in stocks.
As mergers, acquisitions, and restructuring have increased in importance, agency theory has become more important in assessing whether shareholder goals are truly being achieved by managers in the long run.
Agency theory would imply that conflicts are more likely to occur between management and shareholders when the chairman of the board is also the chief executive officer (CEO).
The financial markets allocate capital to corporations by reflecting expectations of the market participants in the price of the corporation’s stock.
credit swaps an insurance product designed to protect financial institutions from customers who default on their loans
The benefits of social responsibility often include a better reputation
Future financial managers will need to understand All of the above

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