About Finance
What is Finance?
What do the following have in Common?
- A corporation needs new financing. Is it better to issue bonds or shares? What are the costs and benefits of each alternative? What are the features that can be packaged with the new bond or stock that will attract investors?
- A corporation is considering an expansion of its manufacturing facilities. How do we estimate the value created by the expansion? How should it be financed? What are the risks involved?
- An investment banker is bringing a new issue of stock to the market. When is the best time to do it? At what price should it be offered?
- An individual (or a money management firm) is considering investing in the stock of a corporation. How should this decision be made? What are the risks and rewards of investing in this company? Is the current price of the stock a reasonable one?
- A bank is evaluating a loan application from a potential borrower. Should it grant the loan? If so, for how much? What should be the interest rate charged to the borrower? How likely is it that the borrower will be able to repay the loan on a timely basis?
- How much should you save monthly so that you will have enough in the account to fund four years of college for your newborn when she is eighteen years of age?
If you guessed that all of the above are applications of finance to decision making, you are correct!
Finance is an Integral Part of All Decisions
Financial analysis is an integral part of all decisions made by businesses and most decisions made by individuals and families. Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks and rewards of their decisions.
Skills for Success
As a finance major, you will learn the principles, concepts, and tools essential to financial decision making. Together with the accounting, economics, management, and other quantitative techniques that you will learn as you progress through the degree program, you will be well prepared for a career in finance. In addition, effective written and oral communication skills and the ability to work in groups are essential skills for success.
|
|
