教程分析第001章.pdfVIP

The Firm and the Financial Markets Firm Firm issues securities (A) Financial markets Invests Retained in assets cash flows (F) (B) Short-term debt Current assets Cash flow Dividends and Long-term debt Fixed assets from firm (C) debt payments (E) Equity shares ) D ( s e x a The cash flows from Ultima y, the firm must T be a cash generating the firm must exceed activity. the cash flows from ernment the financial markets. What is Corporate Finance? Corporate Finance addresses the following three questions: 1.What long-term investments should the firm engage in? 2.How can the firm raise the money for the required investments? 3.How much short-term cash flow does a need to pay its bills? Financial Management Decisions • Capital budgeting • What long-term investments or projects should the business take on? • Capital structure • How should we pay for our assets? • Should we use debt or equity? • Working capital management • How do we manage the day-to-day finances of the