Questions to be considered o What are the main broad types of decisions that a corporate financial manager might make? o Why is shareholder wealth maximization the appropriate goal for the financial manager? o Why is the goal of profit maximization inappropriate? How does cash flow differ from profits? What factors affect the value of a share of stock? What is the difference between debt and equity? O in the relationship between the creditors and the owners, which is the principal and which is the agent? In the relationship between the owners in the managers, which is the principal and which is the agent? . In each of these relationships, how does the principal ensure that the agent works on their behalf? . How does the stock option provide an incentive for the agent to work towards shareholder wealth maximization? How does an audit cause an agent to work towards shareholder wealth maximization? How does the threat of a take over cause an agent to work towards shareholder wealth maximization? What are some other methods of providing incentives for the agent to work toward shareholder wealth maximization? o What are some of the advantages and disadvantages of the sole proprietor organizational form? o What are some of the advantages and disadvantages of the partnership organizational form? How does a general partnership differ from a limited partnership? o What are some of the advantages and disadvantages of the corporate organizational form? Questions to be considered O How does the financial system in the U.S. (and globally) help to ensure the best use of resources? O How does the financial system in the U.S. (and globally) help individuals spread their consumption over time? How do primary markets differ from secondary markets? o What kind of market is the NYSE? NASDAQ? o Why is foreign exchange important for multinational companies? What is the difference between a forward contract and a futures contract? O How can a forward/future contract be used to reduce exposure to foreign exchange risk? O How can an option be used to reduce exposure to foreign exchange risk? o Why is capital market efficiency important to a manager's ability to use shareholder wealth maximization as a decision objective? What are the different levels of efficiency under the EMH? How can you tell how efficient a market might be? o How informationally efficient are U.S. markets? 0 What are the implications of market efficiency for managerial decision making? o How do corporate taxes affect managerial decision making? What is the difference between the marginal and average tax rate? What does each measure? Although the U.S. tax schedule is often called a "graduated" schedule, there are two tax brackets where the tax rate goes up and then back down. What is the purpose of these "bump- out" brackets? Questions to be considered o What are the main broad types of decisions that a corporate financial manager might make? o Why is shareholder wealth maximization the appropriate goal for the financial manager? o Why is the goal of profit maximization inappropriate? How does cash flow differ from profits? What factors affect the value of a share of stock? What is the difference between debt and equity? O in the relationship between the creditors and the owners, which is the principal and which is the agent? In the relationship between the owners in the managers, which is the principal and which is the agent? . In each of these relationships, how does the principal ensure that the agent works on their behalf? . How does the stock option provide an incentive for the agent to work towards shareholder wealth maximization? How does an audit cause an agent to work towards shareholder wealth maximization? How does the threat of a take over cause an agent to work towards shareholder wealth maximization? What are some other methods of providing incentives for the agent to work toward shareholder wealth maximization? o What are some of the advantages and disadvantages of the sole proprietor organizational form? o What are some of the advantages and disadvantages of the partnership organizational form? How does a general partnership differ from a limited partnership? o What are some of the advantages and disadvantages of the corporate organizational form? Questions to be considered O How does the financial system in the U.S. (and globally) help to ensure the best use of resources? O How does the financial system in the U.S. (and globally) help individuals spread their consumption over time? How do primary markets differ from secondary markets? o What kind of market is the NYSE? NASDAQ? o Why is foreign exchange important for multinational companies? What is the difference between a forward contract and a futures contract? O How can a forward/future contract be used to reduce exposure to foreign exchange risk? O How can an option be used to reduce exposure to foreign exchange risk? o Why is capital market efficiency important to a manager's ability to use shareholder wealth maximization as a decision objective? What are the different levels of efficiency under the EMH? How can you tell how efficient a market might be? o How informationally efficient are U.S. markets? 0 What are the implications of market efficiency for managerial decision making? o How do corporate taxes affect managerial decision making? What is the difference between the marginal and average tax rate? What does each measure? Although the U.S. tax schedule is often called a "graduated" schedule, there are two tax brackets where the tax rate goes up and then back down. What is the purpose of these "bump- out" brackets