Lecturer 2 After attending this lecture, students will have an intuitive understanding of the followings.

1. What are the three main areas of Finance? 2. History of Finance

1900-Legal aspects of mergers, Formation of new firms, Issuing of various types of securities to raise capital. 1930-During the depression, the emphasis shifted to bankruptcy and reorganization, corporate liquidity and the regulation of security market. 1940 to early 1950-Finance continued to be taught as a descriptive, institutional subject, viewed more from outsiders standpoint rather than that of a manager. Late 1950s-The focus of finance started moving toward theoretical analysis and shifted to managerial decision designed to maximize the value of the firm. 21st century- The new trend in Globalization and Information technology provide companies with exciting new opportunities to increase profitability and reduce risks along with increased competition and new risks.

3. What are the major Influences of globalization and Information technology to Financial

Management? 4. Types of organization. Why limited company is better than proprietorship and partnership? -Limited liabilities The lower the entitys risk, the bigger its value -Growth opportunities - Ease of liquidity

5. Hybrid Forms of Organization -Limited partnership: limit the liabilities of some of the partners. Some partners are designated general partners and others limited partners. -Limited Liability Partnership: All partners enjoy limited liabilities for business debt. It combines the limited liability advantage of a corporation with the tax advantage of the partnership. -Professional Corporation/ Association: Corporation for the professionals that provides most of the benefits of the incorporation but does not relieve the participants of malpractice liability 6. Goals of the corporations Stock Price Maximization vs Social Welfare
7. Business Ethics and Agency Relationships(Stockholders vs Managers) 8. Stockholders vs Creditors

9. Major factors affecting stock prices -Any financial assets that generate cash flow. -The timing of the cash flow -Riskiness of the business -Mix of financing (Debt or Equity) -Types of instruments a corporation is issuing -Dividend payout 10. EPS Good Luck