Ch.1-An Introduction to Financial Management SAVINGS AND NESTMIENU ESTMENT 2002 Prentice Hall, Inc:
Ch. 1 - An Introduction to Financial Management © 2002, Prentice Hall, Inc
Goal of the Firm 1)Profit Maximization? this goal ignores a) timing of returns (Time Value of Money-Ch 5 b UNCERTAINTY of Returns (Risk-Ch 6
Goal of the Firm 1) Profit Maximization? this goal ignores: a) TIMING of Returns (Time Value of Money - Ch. 5) b) UNCERTAINTY of Returns (Risk - Ch. 6)
Goal of the Firm 2)Shareholder Wealth Maximization? this is the same as: a) Maximizing Firm value b) Maximizing Stock Price
Goal of the Firm 2) Shareholder Wealth Maximization? this is the same as: a) Maximizing Firm Value b) Maximizing Stock Price
Legal Forms of business 1) Sole Proprietorship a business owned by a single individual. Owner maintains title to the firm's assets Owner has unlimited lia bility 2)Partnership Similar to a sole proprietorship, except that there are two or more owners
Legal Forms of Business 1) Sole Proprietorship • A business owned by a single individual. • Owner maintains title to the firm’s assets. • Owner has unlimited liability. 2) Partnership • Similar to a sole proprietorship, except that there are two or more owners
Legal Forms of business 2a) General Partnership all partners have unlimited lia bility 2b) Limited Partnership Consists of one or more general partners, who have unlimited liability, and One or more limited partners (investors) whose liability is limited to the amount of their investment in the business
2a) General Partnership • All partners have unlimited liability. 2b) Limited Partnership • Consists of one or more general partners, who have unlimited liability, and • One or more limited partners (investors) whose liability is limited to the amount of their investment in the business. Legal Forms of Business