财务管理总结 英文.docVIP

Profit Maximization Maximizing a firm’s earnings after taxes. Problems Could increase current profits while harming firm (e.g., defer maintenance, issue common stock to buy T-bills, etc.). Ignores changes in the risk level of the firm. Earnings per Share Maximization Maximizing earnings after taxes divided by shares outstanding. Does not specify timing or duration of expected returns. Ignores changes in the risk level of the firm. Calls for a zero payout dividend policy. Business Value Maximization Market value of all of assets Principals must provide incentives so that management acts in the principals’ best interests Incentives include, stock options（股票期权）, perquisites（额外所得）, and bonuses（奖金红利）。 Social Responsibility Wealth maximization does not preclude the firm from being socially responsible. Protecting the consumer Paying fair wages to employees Maintaining safe working conditions Supporting education Protecting environmental issues Corporate Governance Corporate governance: represents the system by which corporations are managed and controlled. Includes shareholders, board of directors, and senior management. 公司组织形式： Sole Proprietorships：Advantages：Simplicity， Low setup cost，Quick set up，Single tax filing on individual form。Disadvantages：Unlimited liability，Hard to raise additional capital，Transfer of ownership difficulties， Partnerships (general and limited) Advantages Can be simple，Low setup cost, higher than sole proprietorship，Relatively quick setup，Limited liability for limited partners。Disadvantages：Unlimited liability for the general partner，Difficult to raise additional capital, but easier than sole proprietorship，Transfer of ownership difficulties Corporations Advantages：Limited liability，Easy transfer of ownership，Unlimited life，Easier to raise large quantities of capital Disadvantages：Double taxation，More difficult to establish ，More expensive to set up and maintain。 Types of Partnerships General Partnership -- all partners have unlimited liabil