1. Explain how firms raise the funds they need to operate and expand.
2. What information do corporations include in their financial statements? Explain.
3. Define and provide examples of the following terms: Accountintg profits, Indirect finance, Corporate governance, Opportunity cost,Economic profit,Present value.
4. Answer the following question. Buying shares of stock would be risky even in the absence of principal-agent problems. Shareholders enjoy limited liability but, unlike bonds, stock dividends are not always paid, and shareholders always face the possibility that stock prices can fall below the level the shareholders paid for them. Aside from buying shares of well-known companies, how can people with limited funds minimize the risks involved in investing in stocks?
5. What is the Simple Formula for Calculating Stock Prices? Explain.