Finance

Name: NGUYEN THUY VY

ID: 1235875

Class: Friday Morning

Chapter 1: An overview of financial management

1.1

If I bought a share of stock, I would expect to receive the maximization price of stock and I expect to receive it by the end of monthly .Unlucky, buy stocks like taking an unsafe. So, it is not sure to receive it as I expect.

1.7

* If a company’s board of director wants management to maximize shareholder wealth, the CEO”s compensation depend on how well the firm performs.

* If it is to be based on performance, it is measured by the stock’s intrinsic value.

* It is better to measured by intrinsic value because intrinsic value is a long-run concept. It reflects both improper actions and proper actions. For example, management might make an investment that is lower profits for the current year but raises expected future profits.

1.8

There are four forms of business organizations:

| Proprietorship | Partnership | Corporation | LLC or LLp |

Form | advan | advan | disad | disad |

Government regulation | advan | advan | disad | disad |

Income taxes | advan | advan | | |

Unlimited liability | disad | disad | no | no |

Limited life of business | disad | disad | no | no |

Raising capital | disad | disad | advan | disav |

1.10

Stockholder can take to ensure that management’s and stockholder’s interests depend on many actions:

* Compensation packages should be sufficient to attract and retain management.

* Stockholders can intervene directly with managers.

Chapter 2: Financial market and institution

2.2

There are 3 ways in which capital can be transferred from suppliers of capital to those who are demanding capital:

* Direct transfer of money and securities, occur when a business sell its stock or bonds directly to savers, without going through any type of financial institution.

* Indirect transfers through investment bankers: the company sells its stocks or bonds to the investment bank, which...