Finance Chapter One

Finance It addresses how financial resources are obtained, allocated, and managed by a person, a business organization, or a governmental entity.
Corporation This entity, which is legally separate from its managers and owners, is authorized by a state to conduct business.
Treasurer In larger organizations, this officeholder supervises the firms credit and inventory managers, as well as the director of capital budgeting, and reports to the CFO
Limited Liability An investors personal responsibility for the business’s liabilities can never be less than zero or more than the amount invested in the firms common shares.
Business Ethics The collection of principles, practices, and procedures is used to influence the behavior of employees toward the firms stakeholders.
Limited Partner This partner is not allowed to participate in the day to day management of the partnership.
Double Taxation of Dividends This tax situation currently applies to corporations and their owners but not to sole proprietorships, partnerships or their owners.
Shareholder Wealth Maximization This primary goal of financial management is evaluated by the effect of a decision or an action on the value of a firm.
Stakeholder This term describes the individuals and groups whose needs and wants should be identifies and addressed in order to generate higher returns for the firm and ensure its viability.
Value This is the worth of a good or service as established by the discounted and current value of the items cash flows.
According to finance theory, firms should attempt to maximize the ________ price of the firms common stock. The benefit to this objective is that it provides the best financial outcome for the firms ________. long-termowners
Corporations are Chartered by a state and its own legal entity, distinct from its owners.Easier to transfer ownership in the form of stock.
Intrinsic value is also known as Fundamental Value
Intrinsic value stock’s true value based on expected cash flows and risk involved.
How can a firm’s ethical conduct increase its long-term profitability? Ethical corporate behavior reduces unnecessary legal expenses and the need to pay fines.
Major provision of the Sarabens-Oxley Act A publicly traded corporation must hire an external auditing firm to render an unbiased and independent opinion regarding a firms financial statement.
CFO is responsible for Legal, Investments

Leave a Reply

Your email address will not be published. Required fields are marked *