Notes de cours
Corporate Finance Notes
- Cours
- Établissement
- Book
Complete set of corporate finance notes from weeks 1 to 10. Proud to achieve a 93% in this module.
[Montrer plus]
Livre connecté
Titre de l’ouvrage:
Auteur(s):
- Édition:
- ISBN:
- Édition:
Plus de résumés pour
-
Corporate finance college aantekeningen
-
Corporate Finance Excel Automatic Calculator EVERY TOPIC BA IBA (Grade 8.5)
-
Samenvatting Corporate Finance, ISBN: 9780077173630 Finance (BT1109)
Vendeur
S'abonner
krystalyiposnuk
Aperçu du contenu
Look through the slides (required readings) in the textbookLecture 1: Corporate Governance
Textbook Hiller, D, Corporate Finance (3rd European edition)
Types of legal firms Sole proprietorship
- Owned and managed by one person
- Easy to form
- Profits taxed as personal income and do not pay any corporate
tax
- Unlimited liability
- Life of company linked to life of owner
- Amount of funding is limited to owner’s personal wealth
Partnership
- Easy to form
- Requires a partnership agreement
- Limited liability (some are limited liable to the amount of cash they
have introduced to the business)
- Partnership is terminated when a partner dies or leaves the firm
- Difficult to raise cash
- Profits taxed as personal income
- Controlled by general partners → sometimes votes are required
on major business decisions
Limited corporation
- Legal articles and memorandum are needed
- Act as a legal identity
- Has a name and legal powers
- Profits taxed at a corporate tax rate
- Limited liability
- Its life is hypothetically unlimited
- Board of directors → members, chairperson and CEO
- One vs two-tier boards
, One-tier board structure
- Directors and non-executive directors appoint the chairman
- Non-executive directors appoint the actions managed by
executive directors
Two-tier board structure
- Supervisory board appoints executive directors who then appoints
the chief executive
Corporate governance - Defined as the system of internal controls and procedures by
which companies are managed
- It provides a framework that defines the rights, roles and
responsibilities of various groups within an organization
Agency Problems - We have corporate governance to mitigate interests between the
stakeholders (agency problems)
E.g. Managers and CEOs
- Characterized by competing interests between these two groups
- Indirect agency cost
- Lost opportunity
- Direct agency cost:
1. Capital expenditures benefiting the CEO but costing the
shareholders (managers) and their job
What can be done to minimize this type of agency problem?
- Leverage the executive pay (how managers are paid)
2. Monitoring management actions
Majority - minority shareholder relationship
- In concentrated ownership firms, majority shareholders can use
their voting powers to elect directors to the board who will take
actions benefiting the elector shareholders and not the
shareholders in minority
, Shareholder - debtholder relationship
- Arises when CEO favours one type of principles over the other
(favours shareholders over debt holders)
How to minimize this agency cost?
- The 2004 OECD Principles of Corporate Governance
- Ensuring the basis for an effective Corporate Governance
framework
- The rights of shareholders and key ownership functions
- The equitable treatment of shareholders
- The role of stakeholders in Corporate Governance
- Disclosure and Transparency
- The Responsibility of the Board
- Board’s accountability to the company and
shareholders
- Transparency International’s Corruption Perceptions Index (where
corruption in the public sector is most prominent)
Lecture 2: Risk Technique Analysis (Ch 8)
Risk Analysis NPV
- Superior capital budgeting technique
- Entails discounting, future cash flow and getting the present value
of the cash flow, while subtracting the initial investment
- Projects should be taken if NPV > 0
NPV has be adjusted according to:
- Possible changes in events
- Opportunity
- Unexpected events
Risk Analysis Technique: - Provides financial managers the best, worst and expected
, Sensitivity Analysis scenarios according to underlying assumptions
- It shows how each particular variable will be in pessimistic,
expected and optimistic scenarios
- Then it focuses on one variable for one specific scenario,
keeping all other variables constant with the expected
scenario → calculates the NPV based on this case
- Finally, it applies this logic to all other variables individually
and provides a matrix of NPVs under different cases
Net profit (£654) + depreciation (£300) = cash flow
Les avantages d'acheter des résumés chez Stuvia:
Qualité garantie par les avis des clients
Les clients de Stuvia ont évalués plus de 700 000 résumés. C'est comme ça que vous savez que vous achetez les meilleurs documents.
L’achat facile et rapide
Vous pouvez payer rapidement avec iDeal, carte de crédit ou Stuvia-crédit pour les résumés. Il n'y a pas d'adhésion nécessaire.
Focus sur l’essentiel
Vos camarades écrivent eux-mêmes les notes d’étude, c’est pourquoi les documents sont toujours fiables et à jour. Cela garantit que vous arrivez rapidement au coeur du matériel.
Foire aux questions
Qu'est-ce que j'obtiens en achetant ce document ?
Vous obtenez un PDF, disponible immédiatement après votre achat. Le document acheté est accessible à tout moment, n'importe où et indéfiniment via votre profil.
Garantie de remboursement : comment ça marche ?
Notre garantie de satisfaction garantit que vous trouverez toujours un document d'étude qui vous convient. Vous remplissez un formulaire et notre équipe du service client s'occupe du reste.
Auprès de qui est-ce que j'achète ce résumé ?
Stuvia est une place de marché. Alors, vous n'achetez donc pas ce document chez nous, mais auprès du vendeur krystalyiposnuk. Stuvia facilite les paiements au vendeur.
Est-ce que j'aurai un abonnement?
Non, vous n'achetez ce résumé que pour €24,31. Vous n'êtes lié à rien après votre achat.
Peut-on faire confiance à Stuvia ?
4.6 étoiles sur Google & Trustpilot (+1000 avis)
53068 résumés ont été vendus ces 30 derniers jours
Fondée en 2010, la référence pour acheter des résumés depuis déjà 14 ans