Warm Up What type of businesses are exempt from taxes? Provide one example of a government operated business. Do you have a bank account? Which bank? 1.Non-Profit 2. Postal Service or Public Transportation
Business Finance Economics Standard 12.12.9 Learning Goal: I will understand how corporations finance their businesses.
I. Short-Term Financing Less than 1 year Bank loans (loan + interest)
II. Long-Term Financing More than 1 year Requires collateral Common Stock (owners can vote; sometimes dividend) Preferred Stock (no vote; get fixed dividends) Bonds (investors loan a company or gov’t $)
Common vs. Preferred Stock
James Bond
Bonds vs. Stocks
III. Stock Exchanges New York Stock Exchange American Stock Exchange NASDAQ (National Association of Securities Dealers Automated Quotation) Bull market is going up Bear market is going down
Outside NYSE
Bear vs. Bull Market
Bull Market
IV. Brokerage Firms Place order locally or online Send info to floor representative in NY Margin (buying with borrowed money) Earn dividends
Brokerage Firms
V. Securities and Exchange Commission (est. 1934) Police of the stock market False info = fine & jail Stop criminal manipulation of stock prices & insider trading
SEC
VI. Balance Sheet Assets = anything of value Liabilities = debts/obligations Net worth = assets – liabilities