Essentials Of Corporate Finance Already Passed

The function of a financial manager is usually associated with top officer of a firm, i.e. Chief Financial Officer (CFO) or Vice President of Finance. Figure 1.1 highlights financial activity in a large firm: {Ans: VP of Finance coordinates activities of the treasurer and controller; Controller's office handles cost and financial accounting, tax payments and management information systems; Treasurer's office is responsible for managing the firm's cash, credit, financial planning and capital expenditures.}Corporations disadvantage-Extensive paperwork to start and operate the corporation {Ans: True disadvantage of Corporation}Secondary market transaction involves one owner or creditor selling to another. Secondary markets provide the means for transferring ownership of corporate securities and they can be of two kinds {Ans: Dealer over the counter or Auction markets (exchanges)}Sarbanes-Oxley (SOX) Act {Ans: In response to corporate scandals involving companies like Enron, Tyco, etc., US Congress enacted Sarbanes-Oxley act in 2002, which is intended to strengthen protection against the corporate accounting fraud, contains number of requirements designed to ensure that the companies tell the truth in their financial statements and makes management personally responsible for accuracy of company's financial statements}Compliance with SOX has been costly, which caused many companies to "go dark", i.e.