Busi 343 wers - Study guides, Class notes & Summaries

Three main components of finance1. Capital budgeting, capital structure, managing short term cash flows Goal of Financial Managementmaximize current value per share of stock 3 reasons for market efficiency1. Rationality 2. Independent deviations from rationality that cancel each other out 3. Arbitrage Grossman-stiglitz paradoxActive managers make the market more efficient by spotting inefficiencies. If the market gets too efficient, managers will leave, and then there will be no one t...