Introduction to Corporate
Finance Chapter 1 Study
Guide 2026 2027
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, Introduction to Corporate Finance- Chapter 1 Page 2 2026-04-01
What are the three main questions addressed by 1. In what long-lived assets should the firm invest? 2. How can the firm
corporate finance? raise cash for required capital expenditures? 3. How should short-term
operating cash flows be managed?
What is the primary goal of a financial manager? To increase the value of the firm.
What does the Balance Sheet Identity state? A = L + OEq (Assets = Liabilities + Owner's Equity)
What is capital budgeting? The decision process regarding what long-term assets a firm should
invest in.
What is capital structure? The decision regarding how a firm should raise funds for selected
investments.
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