corporations, governance, goals, financial markets, institutions Flashcards
1
Q
Four common business structures
A
- sole trader
- > flexible
- > hard to sell out
- > hard to raise capital
- > at risk if something goes wrong
- partnership
- > assets at risk
- > hard to sell out
- > hard to raise capital
- company
- > limited liability
- > not owners / directors
- > private public
- > sell shares easy
- > raise capital in equity and debt markets
2
Q
goal of financial manager
A
- maximise shareholder wealth
- > not profits
- > conflict of interest
- > resolved by monitoring key performance indicators
- > pay managers in part shares
3
Q
agency problem
A
separation of ownership and control
4
Q
markets
A
- primary market
- > investors buy shares/bond from company
- > initial public offering
- -> when company floats for first time
- > seasoned equity offering
- > existing company issues more shares
- secondary market
- > investors selling shares to other investors
5
Q
financial intermediaries
A
dd
6
Q
how do financial intermediaries compare with financial markets?
A
dddd
