《财务管理：理论与实践》（Brigham）的教学PPTCh 01 Show.ppt

1 - * Copyright ? 2002 by Harcourt, Inc. All rights reserved. CHAPTER 1An Overview of Financial Management Role of financial management Career opportunities Forms of business organization Goals of the corporation Issues of the new millenium Agency relationships What causes a company to have a particular stock value? How can managers make choices that add value to their companies? How can managers ensure that their companies don’t run out of cash while executing their plans? What three questions does financial management seek to answer? Institutions and capital markets Investments Financial management Career Opportunities in Finance Sole proprietorship Partnership Corporation Alternative Forms of Business Organization Advantages: Ease of formation Subject to few regulations No corporate income taxes Disadvantages: Limited life Unlimited liability Difficult to raise capital Sole Proprietorship A partnership has roughly the same advantages and disadvantages as a sole proprietorship. Partnership Advantages: Unlimited life Easy transfer of ownership Limited liability Ease of raising capital Disadvantages: Double taxation Cost of set-up and report filing Corporation The primary goal is shareholder wealth maximization, which translates to maximizing stock price. Should firms behave ethically? YES! Do firms have any responsibilities to society at large? YES! Shareholders are also members of society. Goals of the Corporation Is maximizing stock price good for society, employees, and customers? Employment growth is higher in firms that try to maximize stock price. On average, employment goes up in: firms that make managers into owners (such as LBO firms) firms that were owned by the government but that have been sold to private investors Consumer welfare is higher in capitalist free market economies than in communist or socialist economies. Fortune lists the most admired firms. In addition to high stock returns, these firms have: high quality from customers’ view employe