GB550 Financial Management Unit 1 Assignment

A) Why is corporate finance important to all managers?

B) Describe the organizational forms a company might have from start-up to major corporation.  List the advantages and disadvantages of each form.

C) How do corporations go public and continue to grow?  What are agency problems? What is corporate governance? 

D) What should be the primary objective of managers?

1)                                                                                                                                                                                                     

Do firms have any responsibilities to society at large?

2) Is stock price maximization good or bad for society?

3)                                                                                                                                                                                                     

Should firms behave ethically?

E)                                                                                                                                                                                                    

What three aspects of cash flows affect the value of any investment? 

F)                                                                                                                                                                                                    

What are free cash flows?

G)                                                                                                                                                                                                    

What is the weighted average cost of capital?

H)                                                                                                                                                                                                    

How do free cash flows and weighted average cost of capital interact to determine a firm’s value?

I)                                                                                                                                                                                                      

Who are the providers (savers) and users (borrowers) of capital? How is capital transferred between savers and borrowers?

J)                                                                                                                                                                                                     

What do we call the price that a borrower must pay for debt capital?  What are the four most fundamental factors that affect the cost of money or the general level of interest rates, in the economy?

K)                                                                                                                                                                                                    

What are some economic conditions (including international aspects) that affect the cost of money?

L)                                                                                                                                                                     

What are financial securities? Describe some financial instruments.

M)                                                                                                                                                                   

List some financial institutions.

N)                                                                                                                                                                                                    

What are some different types of markets?

O)                                                                                                                                                                                                    

How are secondary markets organized?

1.)                                                                                                                                                                                                   

List some physical location markets and some computer/telephone networks.

2)                                                                                                                                                        

Explain the differences between open outcry auctions, dealer markets, and electronic and communications networks.

P)                                                                                                                                                                                                    

Briefly explain mortgage securitization and how it contributed to the global economic crisis.