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Final Finance

Terms in this set (278)

Agency Problem
the possibility of conflict of interest between the stockholders and management of a firm
capital budgeting
the process of planning and managing a firm's long-term investments
capital structure
the mixture of debt and equity maintained by a firm
Corporation
A business owned by stockholders who share in its profits but are not personally responsible for its debts
Efficent Market
has no impediments to the free flow of goods and services, such as trade barriers
financial markets
financial institutions through which savers can directly provide funds to borrowers
General Partnership
partnership in which partners share equally in both responsibility and liability
incremental cash flows
the difference between a firm's future cash flows with a project and those without the project
LLC (Limited Liability Company)
Limited liability, pass through income taxation, flexibility
Limited Partership
at least one general partner and one or more limited partners; limited partners do NOT run the business and have limited liability only to the extent of their investment
oppurtunity cost
the most desirable alternative given up as the result of a decision
S corporation
A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships
Sole Proprietorship
A business owned by one person
Working Capital Management
the managing of short-term assets and liabilities
Angel Investors
individuals who invest in start-up companies with high growth potential in exchange for a share of ownership
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