Chapter 1 Flashcards
A business formed by two or more individuals or entities
partnership
bylaws
rules describing how the corporation regulates its existence
A business created as a distinct legal entity composed of one or more individuals or entities.
corporation
The process of planning and managing a firm’s long-term investments.
capital budgeting
corporation
A business created as a distinct legal entity composed of one or more individuals or entities.
The mixture of debt and equity maintained by a firm.
capital structure
taxing corporate profits twice
double taxation
Someone other than a stockholder or creditor who potentially has a claim on the cash flows of the firm.
stakeholder
An important mechanism by which unhappy stockholders can act to replace existing management by exercising the authority to vote someone else’s stock.
proxy fight
double taxation
taxing corporate profits twice
proxy fight
An important mechanism by which unhappy stockholders can act to replace existing management by exercising the authority to vote someone else’s stock.
capital budgeting
The process of planning and managing a firm’s long-term investments.
capital structure
The mixture of debt and equity maintained by a firm.
primary market
the original sale of securities by governments and corporations
all the partners share in gains or losses, and all have unlimited liability for all partnership debts, not just some particular share
general partnership
working capital
A firm’s short-term assets and liabilities.
A firm’s short-term assets and liabilities.
working capital
stakeholder
Someone other than a stockholder or creditor who potentially has a claim on the cash flows of the firm.
sole proprietorship
A business owned by a single individual
partnership
A business formed by two or more individuals or entities
A market who’s purpose is to match those who wish to sell with those who wish to buy
Auction markets
Dealer markets in stocks and long-term debt
over-the-counter (OTC) markets
partnership agreement
The way partnership gains (and losses) are divided
the study of the relationship between business decisions and the value of the stock in the business.
corporate finance
limited partnership
one or more general partners will run the business and have unlimited liability, but there will be one or more limited partners who will not actively participate in the business
The relationship between stockholders and management
agency relationship
secondary markets
those in which these securities are bought and sold after the original sale
Stocks that trade on an organized exchange are said to be _____
listed
The way partnership gains (and losses) are divided
partnership agreement
agency problem
The possibility of conflict of interest between the stockholders and management of a firm
Auction markets
A market who’s purpose is to match those who wish to sell with those who wish to buy
the costs of the conflict of interest between stockholders and management.
agency costs
over-the-counter (OTC) markets
Dealer markets in stocks and long-term debt
corporate finance
the study of the relationship between business decisions and the value of the stock in the business.
agency relationship
The relationship between stockholders and management
The possibility of conflict of interest between the stockholders and management of a firm
agency problem
unlimited liability
looking beyond business assets to the proprietor’s personal assets for payment
agency costs
the costs of the conflict of interest between stockholders and management.
A business owned by a single individual
sole proprietorship
articles of incorporation
a number of things, including the corporation’s name, its intended life (which can be forever), its business purpose, and the number of shares that can be issued. This information must normally be supplied to the state in which the firm will be incorporated
looking beyond business assets to the proprietor’s personal assets for payment
unlimited liability
the original sale of securities by governments and corporations
primary market
general partnership
all the partners share in gains or losses, and all have unlimited liability for all partnership debts, not just some particular share
one or more general partners will run the business and have unlimited liability, but there will be one or more limited partners who will not actively participate in the business
limited partnership
those in which these securities are bought and sold after the original sale
secondary markets
a number of things, including the corporation’s name, its intended life (which can be forever), its business purpose, and the number of shares that can be issued. This information must normally be supplied to the state in which the firm will be incorporated
articles of incorporation
rules describing how the corporation regulates its existence
bylaws
