文档介绍：Chapter 2
Why corporations need financial markets and institutions
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Objectives
Understand how financial markets and institutions channel savings to corporate investment
Understand the basic structure of mutual funds, pension funds, banks, and panies
Enumerate the functions of financial markets and institutions
Understand why the cost of capital for corporate investment is determined by investment opportunities in financial markets
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Content
Why finance matters
The flow of savings to corporations
Functions of financial markets and intermediaries
Value maximization and the cost of capital
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A modern financial system offers financing in many different forms, depending on pany’s age, its growth rate, and the nature of its business.
Financial markets: 金融市场
Financial institutions: 金融机构
Financial system: 金融系统
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Content
Why finance matters
The flow of savings to corporations
Functions of financial markets and intermediaries
Value maximization and the cost of capital
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The money that corporations invest in real es ultimately from savings by investors. But there can be many stops on the road between savings and corporate investment. The road can pass through financial markets, financial intermediaries, or both.
Investors purchase shares with personal savings (1), which are invested (2). The business generates cash (3), which is reinvested (4a) or paid out to shareholders (4b). Reinvestment (4a) represents additional saving on behalf of shareholders.
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Financial markets
Stock market (equity market)
Primary market: market for the sale of new securities by corporations
Secondary market: market in which previously issued securities are traded among investors
Fixed-e market: market for debt securities
Capital market: market for long-term debt and equity
Money market: market for short-term financing (less than 1 year)
Market where securitie