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  • Corporate Finance: Goals and Governance of The Corporation

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    Erika delos Santos
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    The document discusses corporate finance and the goals and governance of corporations. It defines corporate finance as handling the financial affairs of a firm. The internal objectives are to generate cash and earn profits, while the external objective is to maximize shareholder wealth. Financial managers are responsible for making investment and financing decisions, such as capital budgeting and determining sources and amounts of financing. The document also discusses agency problems that can occur when manager interests differ from stockholder interests, and the role of corporate governance in protecting investors.

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    The document discusses corporate finance and the goals and governance of corporations. It defines corporate finance as handling the financial affairs of a firm. The internal objectives are to generate cash and earn profits, while the external objective is to maximize shareholder wealth. Financial managers are responsible for making investment and financing decisions, such as capital budgeting and determining sources and amounts of financing. The document also discusses agency problems that can occur when manager interests differ from stockholder interests, and the role of corporate governance in protecting investors.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    48 views18 pages

    Corporate Finance: Goals and Governance of The Corporation

    Uploaded by

    Erika delos Santos
    The document discusses corporate finance and the goals and governance of corporations. It defines corporate finance as handling the financial affairs of a firm. The internal objectives are to generate cash and earn profits, while the external objective is to maximize shareholder wealth. Financial managers are responsible for making investment and financing decisions, such as capital budgeting and determining sources and amounts of financing. The document also discusses agency problems that can occur when manager interests differ from stockholder interests, and the role of corporate governance in protecting investors.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 18

    CORPORATE FINANCE

    CHAPTER 1
    Goals and Governance of the
    Corporation
    HAZEL JADE E. VILLAMAR
    WHAT IS
    CORPORATE
    FINANCE?
    CORPORATE FINANCE -
    handling the financial
    affairs of a firm.
    ROLE OF CORPORATE FINANCE
    INTERNAL OBJECTIVES

    EXTERNAL OBJECTIVES
    INTERNAL OBJECTIVES

    To generate cash

    To earn profit


    EXTERNAL OBJECTIVE

    To maximize shareholders’


    wealth
    FINANCIAL MANAGER’S
    RESPONSIBILITIES
    INVESTMENT DECISION

    FINANCING DECISION
    INVESTMENT DECISION

    CAPITAL BUDGETING OR CAPITAL


    EXPENDITURE
    FINANCING DECISION
    SOURCES AND AMOUNTS OF
    FINANCING
    REAL ASSETS vs.
    FINANCIAL ASSETS
    WHAT ARE THE DIFFERENT
    FORMS OF BUSINESS
    ORGANIZATIONS?
    FINANCIAL MANAGERS IN A
    CORPORATION

    CHIEF FINANCIAL OFFICER

    TREASURER

    CONTROLLER
    AGENCY PROBLEM

    Managers are agents for


    stockholders and are tempted
    to act in their own interests
    rather than maximizing value.
    CORPORATE
    GOVERNANCE
    The laws, regulations, institutions,
    and corporate practices that
    protect shareholders and other
    investors.
    ETHICS IN
    MAXIMIZING
    VALUE
    HOW CAN YOU MAXIMIZE
    YOUR VALUE?
    REPUTATION
    END OF CHAPTER 1

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