Professional Documents
Culture Documents
Chapter 01
Chapter 01
Chapter Approach
Chapter 1
Firm Goals/Governance
Road to success with
this chapter material
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Fundamentals
of Corporate
Finance
Sixth Edition
Chapter 1
Goals and Governance of the
Firm
Richard A. Brealey
Stewart C. Myers
Alan J. Marcus
Slides by
Matthew Will
McGraw
McGraw Hill/Irwin
Hill/Irwin
Copyright Copyright
2009 by The
McGraw-Hill
Companies, Inc.
All rights
reserved
2009
by The McGraw-Hill
Companies,
Inc.
All rights reserved
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Topics Covered
Investment and Financing Decisions
What is a Corporation?
Who Is The Financial Manager?
Goals of the Corporation
Careers in Finance
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Capital Budgeting
Tangible Assets
Intangible Assets
Toyota Plants
@ $200 million
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Capital Structure
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Firm's
operations
Real assets
(1)
Financial
Manager
(4a)
(4b)
(3)
(timberland)
(1) Cash raised from investors
(2) Cash invested in firm
Investors
(stockholders/
debtholders
save and invest
in a closely
held firm.
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Financial Assets
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What is a Corporation?
Corporation
Types of Corporations
Public Companies
Private Corporations
Limited Liability Corporations (LLC)
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Organizing a Business
Types of Business Organizations
Sole Proprietorships
Partnerships
Corporations
Limited Liability Options
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Organizing a Business
Sole
Proprietorship
Partnership
Corporation
The manager
Partners
Stockholders
No
No
Usually
Unlimited
Unlimited
Limited
No
No
Yes
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Corporate Structure
Sole Proprietorships
Unlimited Liability
Personal tax on profits
Partnerships
Limited Liability
Corporations
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Treasurer
Controller
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Treasurer
Controller
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Agency Problem
Ownership vs. Management
Difference in Information
Stock prices and returns
Issues of shares and
other securities
Dividends
Financing
Different Objectives
Managers vs.
stockholders
Top mgmt vs.
operating mgmt
Stockholders vs. banks
and lenders
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Agency Problem
Agency Problems
Stakeholder
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Careers in Finance
Career
Commercial Banking
Loan Officer
Department Manager
Annual Salary
$ 90,000 +
$ 200,000 +
Corporate Finance
Financial Analyst
Credit Manager
Chief Financial Officer
$ 61-78,000
$ 73-92,000
$ 222-367,000
$ 90-180,000
$ 200-350,000
$ 300-900,000
$ 500k - 2 mil
$ 600k - 30 mil
$ 1 mil - 70 mil
Money Management
Portfolio Manager
Bank Trust Department
$ 500,000 +
$ 60k - 150,000
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Careers in Finance
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Web Resources