Chapter 1 Flashcards
agency problem
The possibility of conflicts of interest between the shareholders and management of a firm.
Big Six
The Big Six refers to the top six chartered banks in Canada:! Royal Bank of Canada, Toronto Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Brookfield Asset Management, and Canadian Imperial Bank of Commerce.
capital budgeting
The process of planning and managing a firm’s investment in long-term assets.
capital markets
Financial markets where long-term debt and equity securities are bought and sold.
capital structure
The mix of debt and equity maintained by a firm.
corporate governance
Rules for corporate organization and conduct; rules and practices relating to how corporations are governed by management, directors, and shareholders.
corporation
A business created as a distinct legal entity owned by one or more individuals or entities.
derivative securities
Financial assets that represent claims to another financial asset.
financial engineering
Creation of new securities or financial processes.
money markets
Financial markets where short-term debt securities are bought and sold.
partnership
A business formed by two or more co-owners.
REIT
A real estate investment trust is a company that owns or finances income-producing real estate.
regulatory dialectic
The pressures financial institutions and regulatory bodies exert on each other.
sole proprietorship
A business owned by a single individual.
stakeholder
Anyone who potentially has a claim on a firm.
