6. What are the three main factors affecting the market price of a corporation’s stock?

6. What are the three main factors affecting the market price of a corporation’s stock?

1. Describe the field of finance. How is it different from the field of accounting?

2. In a typical corporation the finance function is divided into two divisions, or departments. What are they? What does each department do?

3. What are the three forms of business generally encountered in the US? What are the main defining characteristics of each?

4. What is the basic financial goal of a business?

5. In the context of a corporation seeking to maximize the wealth of its owners, how is “wealth” defined?

6. What are the three main factors affecting the market price of a corporation’s stock?

7. What’s wrong (if anything) with saying the basic financial goal of a business is to “maximize profits?”

8. How would you state the basic goal of a non-profit firm?

9. The Internet company Google managed to avoid $2 billion in international income taxes in 2011 by moving a hefty sum of its revenues to subsidiaries in Bermuda, according to CNBC, which cited a report by Bloomberg. The search giant reportedly stashed $9.8 billion in revenues to its shell company in Bermuda — which doesn’t have a corporate income tax — last year allowing the company to shave its overall tax rate by almost 50 percent. Google’s Bermuda move was disclosed in a Nov. 21 filing by a subsidiary in the Netherlands. While the company’s move to shift funds to the country was legal, it could spur the growing global criticism of corporate tax avoidance. What do you think? Is Google’s action ethical? Why or why not?

10. What is “the agency problem?”