Documente Academic
Documente Profesional
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Current
Liabilities
Current
Assets Long-Term
Debt
Fixed Assets
1 Tangible Shareholders’
2 Intangible Equity
Taxes (D)
• Primary Market
– When a corporation issues securities, cash flows from
investors to the firm.
– Usually an underwriter is involved
• Secondary Markets
– Involve the sale of “used” securities from one investor
to another.
– Securities may be exchange traded or trade over-the-
counter in a dealer market.
Stocks and
Investors
Bonds
Firms securities
Money Bob Sue
money
Primary Market
Secondary
Market
Financial Markets
$ Stocks &
Stocks & $
Primary Bonds
Bonds
exchange market
$
ownership
Secondary
market
$130 30%
$100 $100 0%
$90 -10%
$80 -20%
$F $F
Value of the firm (X) Value of the firm (X)
Board of Directors
Debtholders
Shareholders
Management
Debt
Assets
Equity