Questions from Corporate Finance

Q: What are the two basic ways in which funds flow through the

What are the two basic ways in which funds flow through the financial system from lender–savers to borrower–spenders?

Q: Why is it difficult for individuals to participate in the direct financial

Why is it difficult for individuals to participate in the direct financial markets?

Q: What is the difference between primary and secondary markets?

What is the difference between primary and secondary markets?

Q: What are capital markets, and why are they important to corporations

What are capital markets, and why are they important to corporations?

Q: How does information about a firm’s prospects get reflected in its share

How does information about a firm’s prospects get reflected in its share price?

Q: What is financial intermediation, and why is it important?

What is financial intermediation, and why is it important?

Q: How are inflationary expectations accounted for in the nominal rate of interest

How are inflationary expectations accounted for in the nominal rate of interest?

Q: Give an example of a conflict of interest in a business setting

Give an example of a conflict of interest in a business setting, other than the one involving the real estate agent discussed in the chapter text?

Q: What is net working capital? Why might a low value for

What is net working capital? Why might a low value for this number be considered undesirable?

Q: Explain the accounting concept behind depreciation?

Explain the accounting concept behind depreciation?