Overview of Financial Management - Financial Management - Lecture Notes, Study notes of Financial Management

Download Overview of Financial Management - Financial Management - Lecture Notes and more Study notes Financial Management in PDF only on Docsity! 1 An Overview of Financial Management  Career Opportunities  Goals of the Corporation  Agency Relationships Career Opportunities in Finance  Money and capital markets – Banking, Investment Banking  Investments  Financial management Responsibility of the Financial Staff  Maximize stock value by:  Forecasting and planning  Investment and financing decisions  Coordination and control  Transactions in the financial markets  Managing risk Financial Goals of the Corporation  The primary financial goal is shareholder wealth maximization, which translates to maximizing stock price.  Do firms have any responsibilities to society at large?  Is stock price maximization good or bad for society?  Should firms behave ethically? Is stock price maximization the same as profit maximization?  No, despite a generally high correlation amongst stock price, EPS, and cash flow.  Current stock price relies upon current earnings, as well as future earnings and cash flow.  Some actions may cause an increase in earnings, yet cause the stock price to decrease (and vice versa). Agency relationships  An agency relationship exists whenever a principal hires an agent to act on Docsity.com