Chapter 1 - Introduction to Finance - OpenStax

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brokers

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individuals or a firm that brings together potential buyers and sellers of a product and receives a commission at transaction

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business finance

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the study and application of how managers can apply financial principles to maximize the value of a firm in a risky environment

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capital budgeting

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the process of determining which long-term or fixed assets to acquire in an effort to maximize shareholder value

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capital market

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market for longer-term financial instruments, such as stocks and bonds, used to finance long-term projects for organizations

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capital structure

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the mix of financing, usually debt and equity, used by a firm

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chief financial officer (CFO)

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an executive-level officer who sets policy for working capital management, determines optimal capital structure for the firm, and makes the final decision in matters of capital budgeting

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commercial paper (CP)

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short-term, unsecured financial obligations issued by firms as a means of short-term financing for items such as inventory or payables

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comptroller

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also referred to as controller, individual in charge of financial reporting and the oversight of the accounting activities necessary to develop financial reports

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dealers

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facilitate a market and the trading of securities by holding a portfolio of the underlying asset for easy purchase and sale; earn money on the spread between ask and bid prices for the asset

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default risk

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the risk that the issuer of a financial security will be unable to make payments as specified in the terms of a financial contract