Private markets (market in which transactions occur directly between two parties, such as a band and a borrower); public markets (Market in which transactions occur on the large basis and are usually under contract by a third party acting as an intermediary. ) g.
Mutual fund (a collective effort done by a corporation when collected funds are used by the company and Invested Into stocks and other securities, and dividends and others returns are split between the Investors of the mutual fund) ; money market fund- (a mutual fund that Invests In short term investments offering check writing privileges because of its high liquidity, ii: investment checking) h. Physical location exchanges- brick and mortar locations where exchanges take place like the NYSE ; computer/telephone networks-cyber network and telephone network where trading is done without face to face.
What are the three principal forms of business organization? What are the advantages and disadvantages of each? A sole proprietorship- advantages(easily formed, lower taxation, and less regulations disadvantages (unlimited liability, difficult attainment of funding, limited life of business) Partnership- holds the same advantages and disadvantages of proprietorship, with Corporation- unlike the other two entities is separate from the individuals. Advantages( unlimited life, limited liability, transferability), disadvantages (double taxation, highly regulated and, much more intricate in its functions than the first wow. (1-3) What is a firm’s fundamental, or intrinsic, value? What might cause a firm’s intrinsic value to be different from its actual market value? A firm’s fundamental or intrinsic value is basically its raw worth based on its estimated stock valuation. Its fundamental worth and its market worth can differ when analysis are done and find that future value of the business will not be favorable in reference to revenues, stock worth etc. (1-4) Edmund Enterprises recently made a large investment to upgrade its technology.
Although these improvements won’t have much of an impact on performance in the short run, they are expected to reduce future costs significantly. What impact will this investment have on Edmund Enterprise’s earnings per share this year? What impact might this investment have on the company’s intrinsic value and stock price? In the short run the firm’s earnings per share will decrease because the purchase of the improvements will lower its net income seeing as the payoff is in the future and less cash will be on hand.
The future intrinsic value and stock price ill be higher as it will cause them to be more efficiently and we can only infer that it will cause the profit line to grow and stock price along with it. (1-5) Describe the ways in which capital can be transferred from suppliers of capital to those who are demanding capital. Capital can be transferred in supply and demand by direct transfer like an initial public offering when a company sells stocks to the public. Similarly a business can sell their stock to an investment back which then offers these to the public.
