| A | B |
|---|
| Shareholder Wealth Maximization | Maximizing the wealth of the firm's shareholders through achieving the highest possible value for the firm in the marketplace. It is the overriding objective of the firm and should influence all decisions. |
| Financial Capital | Common Stock, Prefered Stock and Retained earnings. These appear on the corporate balance sheet under long-term liabilities and equity. |
| Real Capital | Long-term productive assets such as plant and equipment. |
| Prime Rate | The rate a bank charges its most creditworthy customers. |
| Primary Market | Initial sale of corporate securities to investors when a corporation raises capital. |
| Secondary Market | The market for securities that have already been issued. It is a market in which investors trade back and forth with each other. |
| Capital Markets | Competitive markets for equity securities or debt securities with maturities of more than one year. Examples are common stock, bonds, and preferred stock. |
| Inflation | The phenomenon of price increase with the passage of time. |
| Money Markets | Competitive markets for securities with maturities of one year or less. Examples are: T-Bills, Commercial Paper, and Banker's acceptances. |
| Corporation | A form or ownership inwhich a separate legal entity is created. |
