金融學(xué)教學(xué)課件bodie2e_chapter01

1、copyright 2009 pearson education, inc. publishing as prentice hall1chapter 1: financial economicsobjectiveto define financethe value of financeintroduction to the playerscopyright 2009 pearson education, inc. publishing as prentice hall2introduction im saving for retirement. should i use a bank cd,

2、mutual fund, direct stock market investment? i want that new car. should i use saved cash, lease, borrow? im thinking about starting a new business will it reward me adequately? the company is looking to expand into telecommunications. how should you advise the cfo（chief financial officer）? a latin

3、american country has asked for major project financing should my organization provide the funds?copyright 2009 pearson education, inc. publishing as prentice hall3chapter 1 contents1.1 defining finance1.2 why study finance1.3 financial decisions of households1.4 financial decisions of firms1.5 forms

4、 of business organization1.6 separation of ownership and management1.7 the goal of management1.8 market discipline: takeovers1.9 the role of the financial specialist in a corporationcopyright 2009 pearson education, inc. publishing as prentice hall41.1 defining finance finance is the study of how pe

5、ople allocate scarce resources over time costs and benefits are distributed over time but the actual timing and size of future cash flows are often known only probabilistically understanding finance helps you evaluate these uncertain cash flowscopyright 2009 pearson education, inc. publishing as pre

6、ntice hall5defining financial system when implementing decisions, people make use of the financial system defined as the set of markets and other institutions used for financial contracting and exchange of assets and riskscopyright 2009 pearson education, inc. publishing as prentice hall6financial t

7、heory financial theory consists of: the set of concepts that help to organize ones thinking about how to allocate resources over time the set of quantitative models used to help evaluate alternatives, make decisions, and implement them these concepts and models apply at all levels and scales of deci

8、sion makingcopyright 2009 pearson education, inc. publishing as prentice hall7basic tenet a basic tenet of finance is that the existence of economic organizations (e.g. firms and governments) facilitate the satisfaction of peoples consumption preferencescopyright 2009 pearson education, inc. publish

9、ing as prentice hall81.2 why study finance? to manage your personal resources to deal with the world of business to pursue interesting and rewarding career opportunities to make informed public choices as a citizen the intellectual challengecopyright 2009 pearson education, inc. publishing as prenti

10、ce hall9t “a fool and his money are soon parted”copyright 2009 pearson education, inc. publishing as prentice hall10t ocopyright 2009 pearson education, inc. publishing as prentice hall11to pursue interesting and rewarding career opportunities fcopyright 2009 pearson education, inc. publishing as pr

11、entice hall12t acopyright 2009 pearson education, inc. publishing as prentice hall13t fcopyright 2009 pearson education, inc. publishing as prentice hall141.3 financial decisions of households consumption and saving decisions investment decisions financing decisions risk-management decisionscopyrigh

12、t 2009 pearson education, inc. publishing as prentice hall15important terms assets: anything that has economic value personal investing & asset allocation: the choices about how to hold our pool of accumulated savings. liability, debt net worth = assets - liabilitiescopyright 2009 pearson educat

13、ion, inc. publishing as prentice hall161.4 financial decisions of firmsbusiness firms entities whose primary function is to produce goods and services they vary widely in size from part-time businesses run from a spare room, to giant corporations (e.g. mitsubishi or general motors) with hundreds of

14、thousands of employees, and an even larger ownership are governments business forms? what about un? imf? charity funds? (npo)the branch of finance dealing with financial decisions of firms is called business finance, or corporate finance even npos cannot run smoothly without corporate finance case:

15、credibility crisis of red cross china (your assignment)copyright 2009 pearson education, inc. publishing as prentice hall17first decision of firms the first decision any firm must make is what businesses it wants to be in, which is called strategic planning. the firms business may be defined in term

16、s of a group of products, technologies or customers strategic plans may change radically over timecopyright 2009 pearson education, inc. publishing as prentice hall18second decision of firms the capital budgeting process the preparation of a plan for acquiring factories, machinery, research laborato

17、ries, show rooms, warehouses, and human assets to implement the strategic plan the basic unit of analysis is the investment project. investment projects are identified, triaged, and implemented in the capital budgeting processcopyright 2009 pearson education, inc. publishing as prentice hall19third

18、decision of firms the financing process once a new set of approved projects has been identified, it must be financed with retained earnings, stock, bonds, et cetera capital structure is the amount of the firms market value allocated to each category of issued securities. it determines ownership and

19、risk level of the firms future cash flows capital structures unit of analysis is the firm as a whole (not an investment project ) copyright 2009 pearson education, inc. publishing as prentice hall20capital structure the capital structure also determines who controls the firm under different continge

20、ncies common stock holders usually determine the membership of the board of directors preferred stock holders usually gain some control if preferred dividends are not paid bondholder covenants restrict decisions that could adversely affect bond valuescopyright 2009 pearson education, inc. publishing

21、 as prentice hall21fourth and an extremely important decision of firms working capital all firms (including highly profitable ones) that do not pay sufficient attention to working capital management may be seriously damaged by the resulting loss of investors and creditors confidence delayed in inves

22、tment schedules sub-optimal temporary finance unscheduled sale of the firms assetscopyright 2009 pearson education, inc. publishing as prentice hall221.5 forms of business operation sole proprietorship a firm owned by an individual or family the assets and liabilities are the personal assets and lia

23、bilities of the proprietor unlimited liability low administrative costscopyright 2009 pearson education, inc. publishing as prentice hall23forms of business operation partnership a firm with 2 owners sharing the equity. a partnership agreement usually stipulates how decisions and profits (losses) ar

24、e shared general partners 1 (unlimited liability) limited partners 0 (dont manage business) changes in ownership involve dissolving the old partnership and forming a new onecopyright 2009 pearson education, inc. publishing as prentice hall24forms of business operation corporation a legal entity, dis

25、tinct from its ownership may own property, borrow, sue, be sued, and enter into legal contracts not dissolved when shares are transferred shareholders elect directors, who appoint management pays corporate taxes, resulting in double taxation of owner (not sub-chapter s corp.) limited liability (corp

26、orate veil may be lifted)copyright 2009 pearson education, inc. publishing as prentice hall251.6 separation of ownership and management owners delegate management if agency conflicts have a cost-effective resolutionagency conflict: beneficial conflict between the principle and the agent.copyright 20

27、09 pearson education, inc. publishing as prentice hall26f professional managers have specialized skills efficiencies of scale: the need to pool resources to achieve an efficient scale calls for a structure with many owners, not all of whom can be actively involved in management. diversification of o

28、wners portfolio and risks savings in the cost of information gathering: because their professional skills the managers can gather more accurate information about the firm than the owners, and at a lower cost. learning curve/going concern issues: the managers continue in place and work for the new ow

29、ners when the business is sold, so the new owners dont have to learn everything from the start.copyright 2009 pearson education, inc. publishing as prentice hall271.7 goal of management management rule: maximize the wealth of current shareholders rule depends only upon production technology, market

30、interest rates, market risk premiums, and security pricescopyright 2009 pearson education, inc. publishing as prentice hall28a alternative rules stated in terms of “profit maximization” are fraught with unresolved issues, such as if the production process requires many periods, then which periods pr

31、ofit is to be maximized? if either future revenues or expenses are uncertain, then what is the meaning of “maximize profits” when profits are described by a probability distribution?copyright 2009 pearson education, inc. publishing as prentice hall291.8 market discipline: takeovers the ownership of

32、a corporation generally is widely dispersed & indirect (mutual funds) lacks internal communication channels is often ill-informed about mismanagement isnt willing to pay for & organize change cant wrestle control from a united self-perpetuating board of directors so voting rights alone can d

33、o little to solve the agency conflict. then they just sell stock when dissatisfied, contributing to downward share price pressures.copyright 2009 pearson education, inc. publishing as prentice hall30market discipline: takeovers in a competitive market, a mechanism that reduces mismanagement is the c

34、orporate take-over. example: a customer, supplier, competitor, or professional raider gains specialized knowledge of the mismanagement; the raider purchases a controlling interest in the stock, fires the management, and installs new one; the value of the stock rises, and the raider liquidates owners

35、hip at a profit; this gives the current management a strong incentive to act in the interests of the firms current shareholders by maximizing market value.copyright 2009 pearson education, inc. publishing as prentice hall311.9 the roles of financial specialist in a corporation financial executive-a

36、person with authority in the following functions:copyright 2009 pearson education, inc. publishing as prentice hall32chief executive officer the ceo is typically the president reports to the board of directorscopyright 2009 pearson education, inc. publishing as prentice hall33chief financial officer

37、 the cfo has responsibility for all financial functions in the companycopyright 2009 pearson education, inc. publishing as prentice hall34vp for financial planning the vp financial planning analyzes major capital expenditures new business ventures exiting existing businesses mergers, acquisitions, a

38、nd spin-offscopyright 2009 pearson education, inc. publishing as prentice hall35vp for treasurer the treasurer is responsible for managing the financial activities of the firm and for working capital relationships with investing community managing currency and interest rate risks managing the tax de

39、partmentcopyright 2009 pearson education, inc. publishing as prentice hall36vp for comptroller/controller the comptroller oversees: financial, managerial & cost accounting auditing prepares internal reports comparing planned with actual costs prepares financial statements used by shareholders, c

40、reditors, and regulatorscopyright 2009 pearson education, inc. publishing as prentice hall37financial functions in a corporation:planningprovision of capitaladministration of fundsaccounting and controlprotection of assetstax administrationinvestor relationsevaluation and consultingmanagement inform

41、ation systemscopyright 2009 pearson education, inc. publishing as prentice hall38planning long and short-term financial planning budgeting for capital expenditures budgeting for operations sales forecasting performance evaluation pricing policies economic appraisals analysis of acquisitions and dive

42、stmentscopyright 2009 pearson education, inc. publishing as prentice hall39provision of capital establishment and execution of programs for the provision of capital required by the businesscopyright 2009 pearson education, inc. publishing as prentice hall40administration of funds management of cash

43、maintenance of banking arrangements receipt, custody, and disbursement of the companys monies and securities credit and collection management management of pension funds management of investments custodial responsibilitiescopyright 2009 pearson education, inc. publishing as prentice hall41accounting

44、 and control establishment of accounting policies development & reporting of accounting data cost standards internal auditing systems and procedures (accounting) government reporting reporting & interpreting operations results comparing performance with operating plans and standardscopyright 2009 pearson education, inc. publishing as prentice hall42protection of assets provision of necessary insurance coverage assure protection of business assets, and loss prevention, through internal controls and internal au