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M01titman254431811finmgtc01 141001081325 Phpapp02
M01titman254431811finmgtc01 141001081325 Phpapp02
Getting Started:
Principles of
Finance
Learning Objectives
Introduction
1.Finance: An Overview
2.Three Types of Business Organizations
3.The Goal of the Financial Manager
4.The Four Basic Principles of Finance
Key Terms
Business
Forms
Sole Partnerships
Corporations Hybrids
Proprietorships
Disadvantages:
Personally liable for the business debts
Ceases on the death of the propreitor
Disadvantages:
Partners jointly share unlimited liability
Advantages
Liability of owners limited to invested funds
Life of corporation is not tied to the owner
Easier to transfer ownership
Easier to raise Capital
Disadvantages
Greater regulation
Double taxation of dividends
Agency problem
Capital budgeting
Capital structure
Corporation
Debt
Equity
Financial market
General partner
General partnership
Limited liability company (LLC)
Limited partner
Limited partnership
Opportunity cost
Partnership
Shareholder
Shares
Sole proprietorship
Stock
Stockholders
Working capital management