商業(yè)財務(wù)學英文版教學課件：Chap001 Introduction to Corporate Finance

1、Introduction to Corporate FinanceChapter 1Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinqKnow the three main concerns of corporate financial managementqGrasp the goal of financial managementqEnumerate the financial benefits and drawbacks of differing forms of

2、 business organizationqUnderstand the conflicts of interest that can arise between owners and managersqComprehend that corporate organizations are enhanced by financial markets1.1 What is Corporate Finance?1.2 The Corporate Firm1.3 The Importance of Cash Flows1.4 The Goal of Financial Management1.5

3、The Agency Problem and Control of the Corporation1.6 RegulationEconomic resources are required to establish and maintain a firm: Funds enable materials and processes for delivering salable goods and services Funds are essential for assembling a workforce Funds are required to purchase long-lived ass

4、ets such as equipment and buildingsThe Balance Sheet offers insight into the array of decisions, activities and objectives of the Financial Manager1-4Current AssetsFixed Assets1 Tangible 2 IntangibleTotal Value of Assets:Shareholders EquityCurrent LiabilitiesLong-Term DebtTotal Firm Value to Investo

5、rs:the top three concerns of corporate finance:1. What long-term investments should the firm choose?2. How should the firm raise funds for the selected investments?3. How should current assets be managed and financed?1-6Current AssetsFixed Assets1 Tangible 2 IntangibleShareholders EquityCurrent Liab

6、ilitiesLong-Term DebtWhat long-term investments should the firm choose?1-7How should the firm raise funds for the selected investments?Current AssetsFixed Assets1 Tangible 2 IntangibleShareholders EquityCurrent LiabilitiesLong-Term Debt1-8How should short-term assets be managed and financed?Net Work

7、ing CapitalShareholders EquityCurrent LiabilitiesLong-Term DebtCurrent AssetsFixed Assets1 Tangible 2 Intangible The firms 3 main financial concerns are usually handled by a top officer and aides: V.P. or Chief Financial Officer Strategist, coordinator, authorityTreasurer Cash flow, capital expendit

8、ure, capital structure Controller Accounting, information systems, taxesChairman of the Board and Chief Executive Officer (CEO)President and Chief Operating Officer (COO)Vice President and Chief Financial Officer (CFO)TreasurerControllerCash ManagerCapital ExpendituresCredit ManagerFinancial Plannin

9、gTax ManagerFinancial AccountingCost Accounting Data Processing Board of DirectorsFirst company problem: raise fundsThe corporate form of business is the standard method for solving the problems encountered in raising large amounts of cash.However, businesses can take other forms.1-12The Sole Propri

10、etorshipThe Partnership General Partnership Limited PartnershipThe Corporation1-13 CorporationPartnershipLiquidity and marketabilityShares can be easily exchangedSubject to substantial restrictionsVoting RightsUsually each share gets one voteGeneral Partner is in charge; limited partners may have so

11、me voting rightsTaxationDoublePartners pay taxes on distributionsReinvestment and dividend payoutBroad latitudeAll net cash flow is distributed to partnersLiabilityLimited liabilityGeneral partners may have unlimited liability; limited partners enjoy limited liabilityContinuity Perpetual lifeLimited

12、 lifeThe corporate form of organization is not unique to the United States:If the firm is to prosper, it must: Buy assets that generate more cash than they cost Sell financial instruments that raise more cash than they costThe successful firm generates more cash than it usesCash flowfrom firm (C)Tax

13、es (D)GovernmentRetained cash flows (F)Investsin assets(B)Dividends anddebt payments (E)Current assetsFixed assetsShort-term debtLong-term debtEquity sharesUltimately, the firm must be a cash generating activity.The cash flows from the firm must exceed the cash flows from the financial markets.FirmF

14、irm issues securities (A)FinancialmarketsPlease substitute Figure 1.3 from TextDo not confuse cash flow and accounting income Non-Cash expense example: Depreciation Non-Cash revenue example: Sales on AccountWhat is the correct goal? Maximize profit? Minimize costs? Maximize market share? Maximize sh

15、areholder wealth?Maximize shareholder wealth?Agency relationship Principal hires an agent to represent his/her interest Stockholders (principals) hire managers (agents) to run the companyAgency problem Conflict of interest between principal and agentCost of Conflict of InterestExample: Large investm

16、ent positions firm for long term positive cash flow but has risk in short run Owners want this investment Increases firm value Managers object Risk may have personal cost If managers prevail, foregone long term cash flow is the Agency CostManagerial goals may be different from shareholder goals Expe

17、nsive perquisites Survival IndependenceIncreased growth and size Often lead to management reward Not necessarily in best interest of shareholders Managerial compensation Incentives can be used to align management and stockholder interests The incentives need to be structured carefully to make sure t

18、hat they achieve their intended goal Corporate control The threat of a takeover may result in better management Influence of other stakeholdersThe Securities Act of 1933 and the Securities Exchange Act of 1934 Issuance of Securities (1933) Creation of SEC and reporting requirements (1934)Sarbanes-Oxley (“Sarbox”) Increased reporting requirements and responsibility of corporate directors Personal consequences for