Chapter+8

=Chapter 8: Financing a Business=

Chapter Objectives:

 * Understand the various ways that a company can receive funds it needs for establishment/growth:
 * bonds
 * loans
 * equity (stocks)
 * Understand short-term ways businesses can obtain financing:
 * Business to Business Loans
 * Trade Credit
 * Short-Term Loans
 * Understand the difference between Common Stock, Preferred Stock (advantages and disadvantages)
 * For stock markets, what are the types of businesses that are listed on NYSE? NASDAQ? AMEX?
 * Can you read stock listings in newspapers? (See p. 126 of your text).
 * What is the S&P 500? The Dow Jones?
 * What is the role of the Securities Exchange Commission (SEC)? What does it do?

=Extra Credit: //Answer question in 3-4 complete sentences.//=
 * 1) Explain the following statement in your own words: "The financial markets enable people to increase their personal wealth by helping to build the economy's wealth."
 * 2) Shakespeare wrote, "Neither a borrower nor a lender be." Do you think this is always good advice for businesses in a free enterprise economy? Explain.
 * 3) Do the financial markets enable our economy to increase its resources over time? Explain.
 * 4) When stock prices suddenly sink, the news media often say the decline is due to a wave of selling. Yet every share sold is also a share bought. Why doesn't the news refer to a wave of buying?