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WHERE COMPANY IS
ISSUING STOCK FOR
THE FIRST TIME
TO THE PUBLIC
2nd Class Fin. Market
PRIMARY MARKET
SECONDARY MARKET
PROCESS OF ISSUING THE 'ALREADY ISSUED' STOCKS .
(OR) SELLING AND BUYING STOCKS THAT HAVE BEEN ISSUED
Topic 1
Agency problem
Financial Market
Conflict between shareholder (of the firm) and the managers
Occurs because the management team will not always working to fulfill the interest of the shareholders.
There are always different interest upon different parties that could lead to the conflict.
place where suppliers of fund and demanders of fund meet together; to interact and doing transaction.
Financial manager
cg
corporate government code
To maximize shareholder' wealth
" Is a regulation set by the gov. to the shareholder and managers in a corporation to minimize the agency problem and protecting managers. "
by maximizing stock price
by making smart financial decision
by selecting the right investment
etc.
FINANCIAL MANAGEMENT : PROCESS INVOLVED IN
MAKING DECISION
WHERE TO INVEST?
1st Class Fin. Market
The ability to transfer assets
to cash quickly without significant
decrease in the price.
1. CAPITAL BUDGETING
2. CAPITAL STRUCTURE
3. WORKING CAPITAL MANAGEMENT
FROM WHERE WE CAN
RAISE FUNDS FOR THE SELECTED
INVESTMENT?
MONETARY MARKET
(SHORT TERM)
HOW DO WE MANAGE SHORT TERM ASSETS
AND HOW TO FINANCE THEM
CAPITAL MARKET
(LONG TERM)
GENERAL PARTNERSHIP
- Involve in managing the business
- open up to risk of liability if the business messed up
2. Partnership
LIMITED
PARTNERSHIP
- Cannot involve in managing
the business.
- there's no risk of liability
1. Sole proprietor
3 Types of Business
MORE
REGULATIONS
Harder to form
this type of business
compared to
other type of business
3. Corporation