Define the terms finance and financial management. What are the major sub-areas of finance?
Identify and define the three basic forms of business ownership. Describe the advantages and disadvantages of each.
Define the terms finance and financial management
Respond to the following five questions. Write your responses in a Word document, and number them 1–5.
Firstly, define the terms finance and financial management. What are the major sub-areas of finance?
Secondly, identify and define the three basic forms of business ownership. Describe the advantages and disadvantages of each.
Thirdly, define the terms agency relationship and agency problem. Explain three different approaches to minimizing the agency problem.
Also, explain why ethical behavior is so important in the field of finance.
Further, explain the concept of shareholder wealth maximization. Is there a conflict between the goal of shareholder wealth maximization and the financial manager’s need to act in an ethical manner? Why or why not?
Use references to support your answers as needed. Also, be sure to cite all references using correct APA style. Your responses should be free of grammar and spelling errors, demonstrating strong written communication skills.
Finance and financial management encompass numerous business and governmental activities. In the most basic sense, the term finance can be used to describe the activities of a firm attempting to raise capital through the sale of stocks, bonds, or other promissory notes. Similarly, public finance is a term use to describe government capital-raising activities through the issuance of bonds or the imposition of taxes.
Financial management can be defined as those business activities undertaken with the goal of maximizing shareholder wealth, utilizing the principles of the time value of money, leverage, diversification, and an investment’s expected rate of return versus its risk.
Within the discipline of finance, there are three basic components. First, there are financial instruments.