SOLUTION MANUAL
Corporate Finance
,Chapter 1
Introduction To Corporate Finance
Slides
1.1 Chapter 1: Introduction To Corporate Finance
1.2 Key Concepts And Skills
1.3 Chapter Outline
1.4 1.1 What Is Corporate Finance?
1.5 The Balance Sheet Model Of The Firm
1.6 The Capital Budgeting Decision
1.7 The Capital Structure Decision
1.8 Short-Term Asset Management
1.9 The Financial Manager
1.10 Hypothetical Organization Chart
1.11 1.2 The Corporate Firm
1.12 Forms Of Business Organization
1.13 A Comparison Of Corporations And Partnerships
1.14 1.3 The Importance Of Cash Flow
1.15 1.4 The Goal Of Financial Management
1.16 1.5 The Agency Problem And Control Of The Corporation
1.17 Management Goals
1.18 Managing Managers
1.19 1.6 Regulation
1.20 Quick Quiz
1.21 End Of Main Content
1.22 Accessibility Content: Text Alternatives For Images
1.23 Short-Term Asset Management Text Alternative
1.24 Hypothetical Organization Chart Text Alternative
1.25 1.3 The Importance Of Cash Flows Text Alternative
Chapter Web Sites
Section Web Address
1.1 Cfo: Www.Cfo.Com
1.2 ―Launch Your Business‖: Www.Sba.Gov
1.4 Business Ethics Magazine: Www.Business-Ethics.Com
1.6 Sarbanes-Oxley Survey: Www.Protiviti.Com/Us-
En/Insights/Sox-Compliance-Survey
Chapter Organization
1.1 What Is Corporate Finance?
The Balance Sheet Model Of The Firm
1-1
Copyright © 2023 Mcgraw-Hill Education. All Rights Reserved. No Reproduction Or Distribution Without
The Prior Written Consent Of Mcgraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
The Financial Manager
1.2 The Corporate Firm
The Sole Proprietorship
The Partnership
The Corporation
A Corporation By Another Name…
1.3 The Importance Of Cash Flows
Identification Of Cash Flows
Timing Of Cash Flows
Risk Of Cash Flows
1.4 The Goal Of Financial
Management Possible
Goals
The Goal Of The Financial
Manager A More General Goal
1.5 The Agency Problem And Control Of The
Corporation Agency Relationships
Management Goals
Do Managers Act In The Stockholders‘ Interests?
Stakeholders
1.6 Regulation
The Securities Act Of 1933 And The Securities Exchange Act Of
1934 Sarbanes-Oxley
Annotated Chapter Outline
Slide 1.1 Chapter 1: Introduction To Corporate
Finance Slide 1.2 Key Concepts And Skills
Slide 1.3 Chapter Outline
Powerpoint Note: If There Is A Slide That You Do Not Wish To Include In Your
Presentation, Choose To Hide The Slide Under The “Slide Show” Menu, Instead
Of Deleting It. If You Decide That You Would Like To Use That Slide At A Later
Date, You Can Just Unhide It.
Powerpoint Note: Be Sure To Check Out The Notes That Accompany Some Of
The Slides On The “Notes Pages” Within Powerpoint.
1-2
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
1.1. What Is Corporate Finance?
Slide 1.4 1.1 What Is Corporate Finance?
Corporate Finance Addresses Several Important Questions:
1. In What Long-Term Assets Should The Firm Invest?
(Capital Budgeting)
2. How Should The Firm Raise Funds For Required Capital
Expenditures? (Capital Structure)
3. How Should Short-Term Operating Cash Flows Be Managed?
(Net Working Capital)
A. The Balance Sheet Model Of The Firm
Slide 1.5 The Balance Sheet Model Of The Firm
The Balance Sheet Presents A Picture Of The Firm At A Point In
Time, And It Provides A Model By Which To Address The Three
Basic Questions That Corporate Finance Managers Must Answer.
Slide 1.6 The Capital Budgeting Decision
1. Long-Term Investment Decisions Determine The
Level Of Fixed Assets.
Slide 1.7 The Capital Structure Decision
2. Financing Policy Determines The Liabilities And Equity
Side Of The Balance Sheet.
Slide 1.8 Short-Term Asset Management
3. Short-Term Asset Management Choices (E.G.,
Conservative Versus Aggressive) Affect The Level Of
Net Working Capital.
B. The Financial Manager
Slide 1.9 The Financial Manager
1-3
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
Financial Managers Should Make Decisions That Increase
Firm Value, Which Effectively Involves Three Primary
Categories Of Financial Decisions.
1. Capital Budgeting – Process Of Planning And Managing A
Firm‘S Investments In Fixed Assets. The Key Concerns
Are The Size, Timing, And Risk Of Future Cash Flows.
2. Capital Structure – Mix Of Debt (Borrowing) And Equity
(Ownership Interest) Used By A Firm. What Are The
Least Expensive Sources Of Funds? Is There An Optimal
Mix Of Debt And Equity? When And Where Should The
Firm Raise Funds?
3. Working Capital Management – Managing Short-Term
Assets And Liabilities. How Much Inventory Should The
Firm Carry? What Credit Policy Is Best? Where Will We
Get Our Short- Term Loans?
These Broad Categories, However, Can Be Summarized With Two
Concrete Responsibilities:
a. Selecting Value Creating Projects
b. Making Smart Financing Decisions
Slide 1.10 Hypothetical Organization Chart
The Chief Financial Officer (Cfo) Or Vice-President Of Finance
Coordinates The Activities Of The Treasurer And The Controller.
The Controller Handles Cost And Financial Accounting, Taxes,
And Information Systems (I.E., Data Processing).
The Treasurer Handles Cash And Credit Management,
Financial Planning, And Capital Expenditures.
Video Note: The Role Of The Chief Financial Officer - This Video
Looks At The Changing Role Of The Cfo.
1.2. The Corporate Firm
Slide 1.11 1.2 The Corporate Firm
1-4
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
Although Many Forms Of Business Organizations Exist, The
Corporate Form Is The Standard By Which We Address Most
Large Scale Problems. This Approach, However, Does Not Imply
That The Methods We Develop Are Inappropriate For Other
Business Types.
Slide 1.12 Forms Of Business Organization
A. The Sole Proprietorship
– A Business Owned By One Person
Advantages Include Ease Of Start-Up, Lower Regulation, Single
Owner Keeps All The Profits, And Taxed Once As Personal
Income.
Disadvantages Include Limited Life, Limited Equity Capital,
Unlimited Liability And Low Liquidity.
B. The Partnership
– A Business With Multiple Owners, But Not Incorporated
General Partnership – All Partners Share In Gains Or
Losses; All Have Unlimited Liability For All Partnership
Debts.
Limited Partnership – One Or More General Partners Run
The Business And Have Unlimited Liability. A Limited
Partner‘S Liability Is Limited To His Or Her Contribution
To The Partnership, And They Cannot Help In Running
The Business.
Advantages Include More Equity Capital Than Is Available To A
Sole Proprietorship, Relatively Easy To Start (Although Written
Agreements Are Essential), And Income Taxed Once At Personal
Tax Rate.
Disadvantages Include Unlimited Liability For General Partners,
Dissolution Of Partnership When One Partner Dies Or Wishes To
Sell, Low Liquidity.
C. The Corporation
– A Distinct Legal Entity Composed Of One Or More Owners
1-5
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
Slide 1.13 A Comparison Of Corporations And Partnerships
1-6
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
Corporations Account For The Largest Volume Of Business (In
Dollar Terms) In The U.S. Advantages Include Limited Liability,
Unlimited Life, Separation Of Ownership And Management
(Ability To Own Shares In Several Companies Without Having
To Work For All Of Them), Liquidity, And Ease Of Raising
Capital.
Disadvantages Include Separation Of Ownership And
Management (Agency Costs) And Double Taxation. Recent Tax
Laws Reduce The Level Of Double Taxation, But It Has Not
Been Eliminated.
D. A Corporation By Another Name…
Corporations Exist Around The World Under A Variety Of
Names. Table 1.2 Lists Several Well-Known Companies, Along
With The Type Of Company In The Original Language.
Lecture Tip: Although The Corporate Form Of Organization Has
The Advantage Of Limited Liability, It Has The Disadvantage Of
Double Taxation. A Small Business Of 75 Or Fewer Stockholders
Is Allowed By The Irs To Form An S Corporation. The S Corp.
Organizational Form Provides Limited Liability But Allows
Pretax Corporate Profits To Be Distributed On A Pro Rata Basis
To Individual Shareholders, Who Are Only Obligated To Pay
Personal Income Taxes On The Income. A Similar Form Of
Organization Is The Limited Liability Corporation, Or Llc. Llc‟S
Are A Hybrid Form Of Organization That Falls Between
Partnerships And Corporations. Investors In Llc‟S Have The
Protection Of Limited Liability, But They Are Taxed Like
Partnerships. Llc‟S First Appeared In Wyoming In 1977 And
Have Skyrocketed Since. They Are Especially Beneficial For
Small- And Medium-Sized Businesses Such As Law Firms Or
Medical Practices.
1.3. The Importance Of Cash Flows
Slide 1.14 1.3 The Importance Of Cash Flow
A. Identification Of Cash Flows
To Create Value, The Firm Must Generate More Cash Than It
Uses. Stated Differently, The Firm Must Generate Sufficient Cash
Flow, After Taxes, To Compensate Investors For Providing The
1-7
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
Firm With Financing.
B. Timing Of Cash Flows
1-8
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
, Chapter 01 - Introduction to Corporate Finance
Additionally, The Value Of The Cash Flows Generated By The
Firm Must Be Analyzed In Light Of Both The Timing Of The
Cash Flows, As Well As …
C. Risk Of Cash Flows
…The Risk Of The Cash Flows.
Lecture Tip: It Is An Important Reminder For Students To
Reiterate That Net Income And Cash Flow Can Be Extremely
Different Values For Various Reasons, Some Of Which Are Non-
Cash Expenses (E.G., Depreciation, Amortization), Revenue
Recognition Principles, And Credit Policies.
1.4. The Goal Of Financial Management
Slide 1.15 1.4 The Goal Of Financial Management
A. Possible Goals
Profit Maximization – This Is An Imprecise Goal. Do We Want
To Maximize Long-Run Or Short-Run Profits? Do We Want To
Maximize Accounting Profits Or Some Measure Of Cash Flow?
Because Of The Different Possible Interpretations, This Should
Not Be The Main Goal Of The Firm.
Other Possible Goals That Students Might Suggest Include
Minimizing Costs Or Maximizing Market Share. Both Have
Potential Problems. We Can Minimize Costs By Not Purchasing
New Equipment Today, But That May Damage The Long-Run
Viability Of The Firm. Many Dot.Com Companies Got Into
Trouble In The Late 1990‘S Because Their Goal Was To
Maximize Market Share. They Raised Substantial Amounts Of
Capital In Ipo‘S And Then Used The Money On Advertising To
Increase The Number Of ―Hits‖ On Their Site. However, Many
Firms Failed To Translate Those ―Hits‖ Into Enough Revenue To
Meet Expenses, And They Quickly Ran Out Of Capital. The
Stockholders Of These Firms Were Not Happy. Stock Prices Fell
Dramatically, And It Became Difficult For These Firms To Raise
Funds. In Fact, Many Of These Companies Have Gone Out Of
Business.
B. The Goal Of The Financial Manager
1-9
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
Corporate Finance
,Chapter 1
Introduction To Corporate Finance
Slides
1.1 Chapter 1: Introduction To Corporate Finance
1.2 Key Concepts And Skills
1.3 Chapter Outline
1.4 1.1 What Is Corporate Finance?
1.5 The Balance Sheet Model Of The Firm
1.6 The Capital Budgeting Decision
1.7 The Capital Structure Decision
1.8 Short-Term Asset Management
1.9 The Financial Manager
1.10 Hypothetical Organization Chart
1.11 1.2 The Corporate Firm
1.12 Forms Of Business Organization
1.13 A Comparison Of Corporations And Partnerships
1.14 1.3 The Importance Of Cash Flow
1.15 1.4 The Goal Of Financial Management
1.16 1.5 The Agency Problem And Control Of The Corporation
1.17 Management Goals
1.18 Managing Managers
1.19 1.6 Regulation
1.20 Quick Quiz
1.21 End Of Main Content
1.22 Accessibility Content: Text Alternatives For Images
1.23 Short-Term Asset Management Text Alternative
1.24 Hypothetical Organization Chart Text Alternative
1.25 1.3 The Importance Of Cash Flows Text Alternative
Chapter Web Sites
Section Web Address
1.1 Cfo: Www.Cfo.Com
1.2 ―Launch Your Business‖: Www.Sba.Gov
1.4 Business Ethics Magazine: Www.Business-Ethics.Com
1.6 Sarbanes-Oxley Survey: Www.Protiviti.Com/Us-
En/Insights/Sox-Compliance-Survey
Chapter Organization
1.1 What Is Corporate Finance?
The Balance Sheet Model Of The Firm
1-1
Copyright © 2023 Mcgraw-Hill Education. All Rights Reserved. No Reproduction Or Distribution Without
The Prior Written Consent Of Mcgraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
The Financial Manager
1.2 The Corporate Firm
The Sole Proprietorship
The Partnership
The Corporation
A Corporation By Another Name…
1.3 The Importance Of Cash Flows
Identification Of Cash Flows
Timing Of Cash Flows
Risk Of Cash Flows
1.4 The Goal Of Financial
Management Possible
Goals
The Goal Of The Financial
Manager A More General Goal
1.5 The Agency Problem And Control Of The
Corporation Agency Relationships
Management Goals
Do Managers Act In The Stockholders‘ Interests?
Stakeholders
1.6 Regulation
The Securities Act Of 1933 And The Securities Exchange Act Of
1934 Sarbanes-Oxley
Annotated Chapter Outline
Slide 1.1 Chapter 1: Introduction To Corporate
Finance Slide 1.2 Key Concepts And Skills
Slide 1.3 Chapter Outline
Powerpoint Note: If There Is A Slide That You Do Not Wish To Include In Your
Presentation, Choose To Hide The Slide Under The “Slide Show” Menu, Instead
Of Deleting It. If You Decide That You Would Like To Use That Slide At A Later
Date, You Can Just Unhide It.
Powerpoint Note: Be Sure To Check Out The Notes That Accompany Some Of
The Slides On The “Notes Pages” Within Powerpoint.
1-2
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
1.1. What Is Corporate Finance?
Slide 1.4 1.1 What Is Corporate Finance?
Corporate Finance Addresses Several Important Questions:
1. In What Long-Term Assets Should The Firm Invest?
(Capital Budgeting)
2. How Should The Firm Raise Funds For Required Capital
Expenditures? (Capital Structure)
3. How Should Short-Term Operating Cash Flows Be Managed?
(Net Working Capital)
A. The Balance Sheet Model Of The Firm
Slide 1.5 The Balance Sheet Model Of The Firm
The Balance Sheet Presents A Picture Of The Firm At A Point In
Time, And It Provides A Model By Which To Address The Three
Basic Questions That Corporate Finance Managers Must Answer.
Slide 1.6 The Capital Budgeting Decision
1. Long-Term Investment Decisions Determine The
Level Of Fixed Assets.
Slide 1.7 The Capital Structure Decision
2. Financing Policy Determines The Liabilities And Equity
Side Of The Balance Sheet.
Slide 1.8 Short-Term Asset Management
3. Short-Term Asset Management Choices (E.G.,
Conservative Versus Aggressive) Affect The Level Of
Net Working Capital.
B. The Financial Manager
Slide 1.9 The Financial Manager
1-3
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
Financial Managers Should Make Decisions That Increase
Firm Value, Which Effectively Involves Three Primary
Categories Of Financial Decisions.
1. Capital Budgeting – Process Of Planning And Managing A
Firm‘S Investments In Fixed Assets. The Key Concerns
Are The Size, Timing, And Risk Of Future Cash Flows.
2. Capital Structure – Mix Of Debt (Borrowing) And Equity
(Ownership Interest) Used By A Firm. What Are The
Least Expensive Sources Of Funds? Is There An Optimal
Mix Of Debt And Equity? When And Where Should The
Firm Raise Funds?
3. Working Capital Management – Managing Short-Term
Assets And Liabilities. How Much Inventory Should The
Firm Carry? What Credit Policy Is Best? Where Will We
Get Our Short- Term Loans?
These Broad Categories, However, Can Be Summarized With Two
Concrete Responsibilities:
a. Selecting Value Creating Projects
b. Making Smart Financing Decisions
Slide 1.10 Hypothetical Organization Chart
The Chief Financial Officer (Cfo) Or Vice-President Of Finance
Coordinates The Activities Of The Treasurer And The Controller.
The Controller Handles Cost And Financial Accounting, Taxes,
And Information Systems (I.E., Data Processing).
The Treasurer Handles Cash And Credit Management,
Financial Planning, And Capital Expenditures.
Video Note: The Role Of The Chief Financial Officer - This Video
Looks At The Changing Role Of The Cfo.
1.2. The Corporate Firm
Slide 1.11 1.2 The Corporate Firm
1-4
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
Although Many Forms Of Business Organizations Exist, The
Corporate Form Is The Standard By Which We Address Most
Large Scale Problems. This Approach, However, Does Not Imply
That The Methods We Develop Are Inappropriate For Other
Business Types.
Slide 1.12 Forms Of Business Organization
A. The Sole Proprietorship
– A Business Owned By One Person
Advantages Include Ease Of Start-Up, Lower Regulation, Single
Owner Keeps All The Profits, And Taxed Once As Personal
Income.
Disadvantages Include Limited Life, Limited Equity Capital,
Unlimited Liability And Low Liquidity.
B. The Partnership
– A Business With Multiple Owners, But Not Incorporated
General Partnership – All Partners Share In Gains Or
Losses; All Have Unlimited Liability For All Partnership
Debts.
Limited Partnership – One Or More General Partners Run
The Business And Have Unlimited Liability. A Limited
Partner‘S Liability Is Limited To His Or Her Contribution
To The Partnership, And They Cannot Help In Running
The Business.
Advantages Include More Equity Capital Than Is Available To A
Sole Proprietorship, Relatively Easy To Start (Although Written
Agreements Are Essential), And Income Taxed Once At Personal
Tax Rate.
Disadvantages Include Unlimited Liability For General Partners,
Dissolution Of Partnership When One Partner Dies Or Wishes To
Sell, Low Liquidity.
C. The Corporation
– A Distinct Legal Entity Composed Of One Or More Owners
1-5
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
Slide 1.13 A Comparison Of Corporations And Partnerships
1-6
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
Corporations Account For The Largest Volume Of Business (In
Dollar Terms) In The U.S. Advantages Include Limited Liability,
Unlimited Life, Separation Of Ownership And Management
(Ability To Own Shares In Several Companies Without Having
To Work For All Of Them), Liquidity, And Ease Of Raising
Capital.
Disadvantages Include Separation Of Ownership And
Management (Agency Costs) And Double Taxation. Recent Tax
Laws Reduce The Level Of Double Taxation, But It Has Not
Been Eliminated.
D. A Corporation By Another Name…
Corporations Exist Around The World Under A Variety Of
Names. Table 1.2 Lists Several Well-Known Companies, Along
With The Type Of Company In The Original Language.
Lecture Tip: Although The Corporate Form Of Organization Has
The Advantage Of Limited Liability, It Has The Disadvantage Of
Double Taxation. A Small Business Of 75 Or Fewer Stockholders
Is Allowed By The Irs To Form An S Corporation. The S Corp.
Organizational Form Provides Limited Liability But Allows
Pretax Corporate Profits To Be Distributed On A Pro Rata Basis
To Individual Shareholders, Who Are Only Obligated To Pay
Personal Income Taxes On The Income. A Similar Form Of
Organization Is The Limited Liability Corporation, Or Llc. Llc‟S
Are A Hybrid Form Of Organization That Falls Between
Partnerships And Corporations. Investors In Llc‟S Have The
Protection Of Limited Liability, But They Are Taxed Like
Partnerships. Llc‟S First Appeared In Wyoming In 1977 And
Have Skyrocketed Since. They Are Especially Beneficial For
Small- And Medium-Sized Businesses Such As Law Firms Or
Medical Practices.
1.3. The Importance Of Cash Flows
Slide 1.14 1.3 The Importance Of Cash Flow
A. Identification Of Cash Flows
To Create Value, The Firm Must Generate More Cash Than It
Uses. Stated Differently, The Firm Must Generate Sufficient Cash
Flow, After Taxes, To Compensate Investors For Providing The
1-7
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
,Chapter 01 - Introduction to Corporate Finance
Firm With Financing.
B. Timing Of Cash Flows
1-8
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
, Chapter 01 - Introduction to Corporate Finance
Additionally, The Value Of The Cash Flows Generated By The
Firm Must Be Analyzed In Light Of Both The Timing Of The
Cash Flows, As Well As …
C. Risk Of Cash Flows
…The Risk Of The Cash Flows.
Lecture Tip: It Is An Important Reminder For Students To
Reiterate That Net Income And Cash Flow Can Be Extremely
Different Values For Various Reasons, Some Of Which Are Non-
Cash Expenses (E.G., Depreciation, Amortization), Revenue
Recognition Principles, And Credit Policies.
1.4. The Goal Of Financial Management
Slide 1.15 1.4 The Goal Of Financial Management
A. Possible Goals
Profit Maximization – This Is An Imprecise Goal. Do We Want
To Maximize Long-Run Or Short-Run Profits? Do We Want To
Maximize Accounting Profits Or Some Measure Of Cash Flow?
Because Of The Different Possible Interpretations, This Should
Not Be The Main Goal Of The Firm.
Other Possible Goals That Students Might Suggest Include
Minimizing Costs Or Maximizing Market Share. Both Have
Potential Problems. We Can Minimize Costs By Not Purchasing
New Equipment Today, But That May Damage The Long-Run
Viability Of The Firm. Many Dot.Com Companies Got Into
Trouble In The Late 1990‘S Because Their Goal Was To
Maximize Market Share. They Raised Substantial Amounts Of
Capital In Ipo‘S And Then Used The Money On Advertising To
Increase The Number Of ―Hits‖ On Their Site. However, Many
Firms Failed To Translate Those ―Hits‖ Into Enough Revenue To
Meet Expenses, And They Quickly Ran Out Of Capital. The
Stockholders Of These Firms Were Not Happy. Stock Prices Fell
Dramatically, And It Became Difficult For These Firms To Raise
Funds. In Fact, Many Of These Companies Have Gone Out Of
Business.
B. The Goal Of The Financial Manager
1-9
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
