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Definition
| a firm owned by a single individual and not organized as a corporation. |
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| a firm owned jointly by two or more persons and not organized as a corporation |
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| a legal form of business that provides owners with protection from losing more than their investment should the business fail |
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| anything of value owned by a person or a firm |
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| the legal provision that shields owners of a corporation from losing more than they have invested in the firm |
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| the way in which a corporation is structured and the effect a corporation's structure has on the firm's behavior |
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| separation of ownership from control |
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Definition
| a situation in a corporation in which the top management, rather than the shareholders, control day-to-day operations |
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Definition
| a problem caused by an agent pursuing his own interests rather than the interests of the principal who hired them (stockholders) |
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Term
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Definition
1.reinvest the profits(retained earnings) back into your firm
2. Recruiting additional owners to invest in the firm-->increases firm's financial capital
3. Borrow funds from family/friends/relatives |
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Term
| Unless firms rely on RE, they have to raise external funds from others who have funds available to invest which they do in two ways... |
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Definition
1.Indirect Finance--a flow of funds from savers to borrowers through financial intermediaries such as banks. Intermediaries raise funds from savers to lend to firms
2.Direct Finance--a flow of funds from savers to firms through financial markets, such as the NY Stock Exchange. Usu takes the form of the borrower selling the lender a financial security(stock/bonds) |
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Definition
| A financial security that represents a proise to repay a fixed amount of funds. many have terms, or maturities, or 30yrs |
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Definition
| an interest payment on a bond |
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| the cost of borrowing funds, usually expressed as a percentage of the amount borrowed. |
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Definition
| a financial security that represents partial ownership of a firm; do not have a maturity date so the firm is not obliged to return the investor's funds at any particular date |
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Definition
| payments by a corporation to its shareholders. (remaining profits are paid to shareholders |
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| a firm's net income, measured by revenue-operating expenses-taxes paid |
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Definition
| a cost that involves spending money |
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Definition
| a nonmonetary opportunity cost |
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Definition
| a firm's revenues-all implicit and explicit costs |
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