1 / 5

Lecture “0” (Self Study )

Lecture “0” (Self Study ). The Corporation Berk , De Marzo Chapter 1. Types of Firms. Sole Proprietorship : Business is owned and run by one person .

tassos
Télécharger la présentation

Lecture “0” (Self Study )

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Lecture“0” (Self Study) The Corporation Berk, De Marzo Chapter1

  2. Types of Firms • Sole Proprietorship: Business is owned and run by one person. • Partnership: Similar to a sole proprietorship, but with more than one owner. All partners are personally liable for all of the firm’s debts. A lender can require any partner to repay all of the firm’s outstanding debts. The partnership ends with the death or withdrawal of any single partner. • Limited Liability Company: All owners have limited liability but they can also run the business. Relatively new business form in the U.S. • Corporation:A legal entity separate from its owners. • Has many of the legal powers individuals have such as the ability to enter into contracts, own assets, and borrow money. • The corporation is solely responsible for its own obligations. Its owners are not liable for any obligation the corporation enters into.

  3. Organizational Chart of a Typical Corporation

  4. Ownership versus Control of Corporations • Financial Manager is responsible for: Investment Decisions, Financing Decisions and Cash Management • Goal of the Firm: Shareholders will agree that they are better off if management makes decisions that maximizes the value of their shares. • Agency Problems: Managers may act in their own interest rather than in the best interest of the shareholders. One potential solution is to tie management’s compensation to firm performance. • Primary Markets: When a corporation itself issues new shares of stock and sells them to investors, they do so on the primary market. • Secondary Markets: After the initial transaction in the primary market, the shares continue to trade in a secondary market between investors • Public Company: Stock is traded by the public on a stock exchange. • Private Company: Stock may be traded privately.

  5. Worldwide Stock Markets Ranked Source: www.world-exchanges.org

More Related