The connotation of corporate financial management

Capital Budgeting: The process of planning and managing a business's long-term investments

Capital Structure: The specific mix of long-term debt and equity that a business uses to finance its operations.

Working capital management: short-term assets and short-term liabilities of the enterprise

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Classification

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Survive

Avoid financial distress and bankruptcy

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Maximize the current value per share of existing shares

Maximize the market value of existing shareholder equity

Agency Relationship: The relationship between shareholders and management

Agency problem: conflict of interests between the principal and the agent

Agency costs: the costs of conflicts of interest between shareholders and management

Key goals: Independence and self-sufficiency of the company

Primary market: The market where governments and companies initially sell securities

Secondary Market: A market in which securities are bought and sold after their initial sale