High Quality Lecture Notes for Accounting and Finance

Lecture 2:
FINANCING AND CAPITAL MARKETS



Dr. Jay H. Jung
Senior Lecturer in Accounting


1

,Review on Lecture #1
Q1) What are the examples of operating expenses?
 Salaries, rent, electricity, stationery, insurance expenses.

Q2) What is the accounting equation?
 Assets = Liabilities + Equity

Q3) It refers to non-cash items such as revenues and expenses
being recorded when incurred, regardless of cash movements.
What is it called?
 Accrual

Q4) A CEO overstates one-time expenses in the current period in
order to boost up future profits during his or her tenure. It is
usually observed around a CEO turnover. What is this earnings
management technique called?
 Big bath accounting



2

,Overview of Lecture #2

Today, we will cover:
 Case study - WeWork

 Sources of finance for a business
• Internal and external sources
• Various types of borrowings

 The role of a stock exchange
• Primary and secondary market
• Advantages and disadvantages of listing

 Capital market anomalies
• Capital market efficiency
• Capital market phenomena
• Adaptive capital market

3

, [Case: Wework]


Wework




• WeWork’s Custom Private Large Offices (2 mins)
4