Review of the Previous Lecture

• Finance
– Components
– Significance
• Financial Management Decisions
– Capital Budgeting
– Capital Structure
– Working Capital Investment
• Role of Financial Manager

Topics under Discussion

• Forms of Business Organization
– Proprietorship
– Partnership
– Corporation
• Goals of the Corporate Firm
• Agency Problem
• Firm and the Financial Markets

The Corporate Firm

• The corporate form of business is the standard method for solving the problems encountered inraising large amounts of cash.
• However, businesses can take other forms.