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Summary Fundamentals of Corporate Finance

- Richard A Brealey, et al
ISBN-10 1259921964 ISBN-13 9781259921964
160 Flashcards & Notes
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A snapshot of the summary - Fundamentals of Corporate Finance Author: Richard A Brealey Stewart C Myers Alan J Marcus ISBN: 9781259921964

  • 1 goals and governance of the corporation

  • 1.1 investment decisions vs financial decisions

  • geef 2 voorbeelden van een financial decisions binnen een corporation
    - get a loan at the bank

    -securities
  • give 2 differences between real and financial assets
    -real assets are directly needed to produce the goods and services
    -real assets are part of investment and financial assets are part of financing
  • geef 2 voorbeelden van investment decisions binnen een corporation
    - open new stores
    - spend 2mil on R&D
  • what is the difference between equity inverstor and debt investor
    with equity investing you buy shares and with debt investor you lend money so you will have to be paid back
  • 1.2 what is a corporation

  • why can someone's house not be taken away if his corporation goes bankrupt?
    because a corporation is a distinct legal entity and the shareholders cannot be held responsible for this because they have a limited liability via shares
  • what are the first steps we need to take when we want to start a corporation?
    we have to make a business plan with a lawyer and in this contract needs to be said who is going to manage it, how you are going to make profit, what you are going to sell, this all has to be good with the law because the corporation is considered as a resident of it's state
  • what happens with your personal assets when you have not incorporated your business and it goes bankrupt
    the bank can than make you sell your personal assets to try and raise the money you borrowed and can't pay back
  • how does the public corporation choose it's managers?
    the public shareholders must choose a board of directors, which at their turn have to elect the managers, this is good because you have a separation between ownership and control
  • 1.3 financial managment

  • what is the task of the CFO?
    he is the financial boss and is responsible for the financial planning and policy. he will explain earning results and forecast to investors and the media
  • what is the task of the controller?
    he has to prepare the financial statements, looks after accounting and taxes. his main job is to make sure the money is used efficiently
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