Ch 1 Slide#10-25

Let's talk about financial
management decisions.

If you're a finance manager,

let's say in a big company
or even in small businesses,

it could even be a
sole proprietorship,

a business owned by
a single individual.

What kind of decisions
do you make?

In fact, I said these decisions
you make even in your day

to day life finance
decisions. Three questions.

Question Number 1 is called

the [NOISE] capital
budgeting decision.

What long term investments or

project should the
business take on.

By long term project, we mean,

for example, for Walmart,

it would be opening a new store.

That's a long term decision.

Or even expanding their
e-commerce would be

another example for Walmart

of these long term investments.

Another example that
comes to my mind

is a business acquiring
other business.

For instance, Facebook acquired
WhatsApp back in 2012,

I think, or 2013
for $19 billion.

That's an example of
capital budgeting decision.

The second question
we look at is

called the capital
structure decision.

Capital structure decision has

to do with where do we get money

from so we know where we want to

invest but we need money.

Where do we get money from?

Should we use debt?

Debt is a loan, an obligation.

So when you borrow
debt from bank,

loan from bank, or
even from public,

it has to be paid back.

Or companies could
even issue equity.

Public companies
could issue equity.

Even private companies
could issue private equity.

Private equity, the
whole idea with equity

is it's not an
obligation unlike debt.

Equity does not have
to be paid back.

We are asking these
other folks to be

part owner of our business,
so that's equity.

Should we use debt or
should we use equity?

There are benefits and
downside of each of these.

We'll talk over that later.

But anyway, so that's
capital structured decision.

Number 3 is called this
capital management decision.

It has to do with
how do we manage

our money in our day-to-day
business operations?

For example, for companies,

how do we pay salaries
to our employee?

How do we pay money to

our suppliers for all
the purchases we made?

How do we pay utility bills?

It matters, and it's
oftentimes companies who have

good capital budget and

good capitalist
structure decisions,

but they do not manage their
working capital properly,

and eventually they
could face bankruptcy.

These are very
important decisions,

whether it is a corporation,

small business, or
even as individual,

you'd be looking at these three.

Now let's talk about forms
of business organization.

There are different forms
of business organization.

The three major
forms in the US are

sole proprietorship,
partnership, and corporation.

In the outset, what I would say,

sole proprietorship is
a business owned by,

you guessed it right,
an individual.

Partnership is a business

formed by more than
one individual.

It's by two partners or maybe
five partners, 10 partners.

Then there is corporation.

Corporation is owned
literally by public.

There could be
innumerable number

of owners in corporation.

For example, if
you look at Apple,

Apple literally has billions
of owners in the company.

Sole proprietorship, as we said,

is a business owned
by one individual.

The owner, that single person,

keeps all of the profits and
all of the loss as well.

One of the downside of sole
proprietorship is that

the equity capital is limited
to owners personal wealth.

Whatever amount of money,
whatever wealth you have,

that's it for you to
expand the business.

The other downside of
sole proprietorship

is something we call as
unlimited liability.

Any idea what that might mean?

Well, unlimited liability means

even your personal property

is tied to the
business liability.

If your business
owes a lot of money,

debt to other lenders,

then you might have to sell
your building, your land,

your vehicle to pay off the
debt owed by your business.

Then we have partnership,

which is a business owned by

two or more individuals
and the partnership

dissolves when the general or

the main partner dies
or wishes to sell.

For this partner,
the main partner,

at least, there is
unlimited liability.

For non main partner,

like what we call
a limited partner,

the partnership could have

general partner and
limited partner.

General partner are the

one [NOISE] who have
unlimited liability.

But limited partners are

the ones who have
limited liability.

Maybe simply because they are

not as active in the business,

so they do not want to
a unlimited liability,

but still want to provide
some form of ownership,

some money, and put some
money into the business.

Now let's talk
about corporation,

the third type of business.

Since our entire
course is based on

this corporate finance
or corporation,

please do pay good attention
to this type of business.

What's a corporation?
Corporation is

a legal person like you and I,

how you and I are a person
for the state, similarly,

corporation are legal person
and a resident of a state.

That is why we
oftentimes hear that

Samsung sued Apple for
infringing on its patent,

or Apple sued Samsung,

or some human being.

Some lady sued MacDonald,

for example, for some reason.

How could a company be sued?

It's not a human being,

but in the eyes of law,

the corporations are almost

like you and I, an individual.

What are the advantages
of corporation?

Number 1 is limited liability.

Limited liability is when

your personal property is not
tied to business liability.

For instance, I have
invested on Facebook.

If Facebook should go bankrupt,

hopefully it won't, but
if it goes bankrupt,

I could lose all of
my money that I've

put into Facebook stocks,

but not one time more because

my personal property is not
tied to business liability.

The lender of Facebook

cannot come knocking
on my door saying,

hey, pay us the due.

You are one of the
owner of Facebook,

so you sell your property.

No, nobody will do that because

it's a limited liability.

This type of business,

they have unlimited life.

For example, Walmart has

been around for a
really long time,

even though the founder
died a long time ago,

Coca Cola has been around for

a really long time even though

the founder died [NOISE]
a long time ago.

Even in recent example
would be Steve Offs,

the founder of Apple,

may rest in peace, he
died back in 2011,

but the company is
still going strong

, so unlimited life.

Separation of ownership
and management,

a very important
idea of corporation.

What that basically means is

the owners in the management,

they are different being,
they're different party.

For example, like I said,

I'm one of the part
owner of Facebook,

but those who are managing

Facebook, they are
somebody else,

so they are management who
are managing Facebook.

It can be a good thing,
it can be a bad thing.

Think, why could it
be a good thing?

That there is separation of
ownership and management.

That ownership and management,

they are different parties.

Why is that a good thing?
The reason is this.

It's good because even though

I have no clue how
to manage Facebook,

I could still be a part
owner of Facebook.

Even though I do not know
how to manage Apple,

I could be owner of Apple
or Google, or Amazon,

or Starbucks, Exxon Mobile,
whatever you name it,

you could be a part owner
of those companies even

though you have no
managing skill.

That's a good
thing, I don't have

to be the management or manager.

But the bad thing
about separation,

we'll talk about that in a bit.

Then there is something we
call as transfer of ownership.

Transfer of ownership is,

if I do not want to be the
owner of Facebook anymore,

I can simply sell my stock.

It's really easy. I could
do it within 10 seconds.

It is really easy for these
corporations to raise money.

Like I said earlier, like

Facebook bought WhatsApp
for $18 billion,

where could they get
so much money from?

They raised money
by issuing equity.

It was possible only because

Facebook became a
public company.

But there could be
a disadvantage.

One of the disadvantages is

separation of ownership
and management.

That's what we said earlier.
It is an advantage,

but it could also
be a disadvantage.

It is a disadvantage because of

something we call
as agency problem.

To understand agency problem,

let me draw a small line here.

Let's say there is an isn't
and there is a principle.

This is called as the
agency relationship.

Agent is supposed to be

working in the interest
of the principle.

For example, let's think
about real estate agents.

The real estate agent,

their job is to
find the cheapest

and the best property
for their principal.

That is what is
the job of agent.

But there could be
an agency problem.

By agency problem,
we mean the conflict

of interest between the
agent and the principal.

The agent, instead
of finding the

cheapest and the best
property for the principal,

may be finding the
properties that actually

provides him or her with
the highest commission,

disregard to how costly that
may be for the principle.

We call that the,

again, agency problem.

Agency problem is
when the agent is not

working in the
interest of principle.

Why are we talking about this?

Because in corporation, the
managers are the agent,

and the principle
would be the owners.

In other words, it is
the job of the managers

to work in the interests
of the owners.

For example, it is job
of Mark Zuckerberg or

Tim Cook to work in the
interest of their shareholders,

me, but they may not do that.

They may work only in

their interest so we call
that agency problem.

The management and the
owners are different.

That would not be the case in

sole proprietorship
or partnership.

In sole proprietorship,
in partnership,

the management and the owners,

they are the same so
there is no conflict.

But incorporation, this conflict

exists and that is
one of the downside.

Then we have something we
call is double taxation.

Double taxation is when in
corporation, when corporation,

they make profits, they

have to pay corporate
tax you all know.

The corporate tax rate
right now is 21%.

All of the corporations,

they have to pay 21% tax
on their corporate income.

On top of that, then

after the corporations
pay tax on their income,

they share that profit
with their owners.

Anybody remembers or
knows what that is

called when companies share
their profit with owners,

that's call it dividends.

On this dividend, let's say I

receive dividends from
Facebook or Apple,

then I have to pay
tax on that as well.

That gets added, the
dividends get added to

my income from Western
Oregon University.

My salaries and then I will
pay tax on my entire income.

The same money is
being taxed twice.

The company has already
paid tax and then pays

dividends and then on that
dividend I again pay tax.

That is another disadvantage
of corporation.

What should be the goal
of financial management?

When we are managing money,

What should be the ultimate
goal we should keep in

mind or the finance managers
should keep in mind?

Let's talk of different goals,

different potential
goals and then we'll

talk about what should
be the main or primary,

the most important goal
of any finance managers.

One of the contender,

you could think about it.

One of the goal we all
talk about probably

would be to maximize profit.

Another contender would
be to maximize sales.

Other contender could
be to minimize cost.

Maximize this, or minimize this,

for example, maximize
maybe the market share.

There could be maximize
quality, I don't know.

These are different
potential goals

of financial management.

Whatever could give us those,

that's how we manage money.

Let's talk about each of
this maximize profit.

What we say is it could
be a secondary goal,

but definitely it should not be

a primary goal
because maximizing

profit can be achieved by

doing things that are
good in the short run,

but not good in the long term.

For example, companies could

maximize their profit
by doing all promotion.

They may maximize their
profit in the short run,

but that could hurt
them in the long run.

Same thing with
minimizing cost companies

could minimize their cost,

companies like Apple they
could minimize their cost by,

for example, cutting down on

their research and
development expenditure

by compromising with quality.

Which will improve their profit

in the short run but could be,

could kill the company
in the long run.

Because Apple is Apple,

because of the quality
and if they give that up,

then there will not
be Apple anymore,

there will be something else.

Maybe there will be
Nokia or somebody

else in the sense that
they could just die out.

What about maximizing
shareholder wealth?

In fact, we say that
that is what should

be the primary goal
of corporation?

Yes, this should be the
primary goal of corporation.

Why we say that?

Because the problem associated
with these prior goals,

or any other goals
for that matter won't

exist if we are maximizing
shareholder's wealth.

Now, why maximize shareholder?

Why should we pay them

that much attention,
but before that.

But how do we maximize

shareholders wealth?
Think about it.

Let's say I'm part owner or

shareholder of I'm a
shareholder of Facebook.

What could Facebook do
or how could Facebook

maximize my wealth If I'm
one of the shareholder?

Yes, Facebook could try

to increase the value
of their stocks.

That is how they could
maximize my wealth.

If the value of
the shares go up,

then my wealth increases.

That's how, by maximizing

the current value per share of

the company's existing stock.

If it is other form of
business, not corporation,

but providership or partnership,

then still maximize the
value of the equity.

Again, just to go back to
what I was saying earlier,

why maximizing
shareholder's wealth?

Because again, it does not come

with a problem prior to problem.

When we say maximizing
shareholder's wealth,

it means we are thinking of

long term only good decisions

that will have a positive

long term impact on the company.

Only those decisions will
increase the value of

company's equity and decision
and financial decisions

it will have negative
impact on the business

even if in the short run it
may have positive impact.

Shareholder's wealth or
stock price for example.

I don't know if you heard
about Wells Fargo scandal.

What Wells Fargo did a few
months ago was to create,

millions of fake accounts,
savings account,

checking accounts on their
existing customers account.

Let's say I'm one of the
customer of Wells Fargo,

I have checking
account with them.

What they did was to create

some fake account on my
name without telling me,

and then they would charge
me fees for those accounts,

for maintaining those accounts.

Create fake account on my
name, don't even tell me,

don't even get my
consent and then charge

me fees for maintaining
those accounts?

They opened millions
of such fake accounts?

Yes, what did that
do in the short run?

That increased their profit
but when it came out,

when that became
public, that scandal,

what happened to the stock
price of Wells Fargo?

Fee fall. It hurt

the shareholder big
time, that could happen.

All the good decisions,

all the positive decisions,

long term decisions, they
increase stock price.

The idea also is that

shareholders, they are
intelligent people.

They can see what's going on,

what's happening in the company.

Good decisions improve
shareholders wealth.

Maximizing shareholder wealth
should be the primary goal.

Does that mean firms
should do anything

and everything to maximize
shareholder wealth?

There are some ethical questions

and there are some
legal questions.

Ethical would be, for example,

like outsourcing
versus offshoring.

If you don't know the
difference between those two,

outsourcing is giving
some of your job

like assembly or manufacturing
to somebody else,

to a second entity in
a foreign country.

Off shoring is starting,

or I should say having

your own assembly unit

or manufacturing unit
in a foreign country.

Having your own unit
versus giving your job to

somebody else in foreign
country, is it okay?

That is an ethical question

There is no right
or wrong answer to

those and then there are

some legal aspect
to this as well.

For example, like Enron,

you all know Enron Worldcom,

they went bankrupt because of

certain fraud and manipulations
in these companies.

We'll look at that
in the next slide.

What happened in Enron?

There is a video. Make
sure to watch that video,

because it really
is a cool video.

It shows you how some of
the corporate managers,

could break the law

and do some stupid stuff
that in the long run,

of course, killed the company.

Then there is another question.

Corporate support of charities.

Should companies provide
money to support charities.

For example, like Bill Gates
the founder of Microsoft,

he puts tons of money
into charity called,

I think Bill and
Melinda Foundation.

They put a lot of money in doing

research of medicines,
for example,

like medicine on
Aids and anyway,

so should companies
put their money

into charities or should they

focus on whatever
they are good at?

There are such
ethical questions.

Again, there are no right
and wrong answers even

though these days there

are more and more
companies that are

putting their money into

social matters and that
adds to their public ease.

There is some financial benefit

of putting money into

charities as well.
Let's look at Enron.

It had taken Enron
16 years to go from

about 10 billion of assets
to 65 billion of assets.

It took them 24 days
to go bankrupt.

Just an immediate sense of

outrage at lay and
skilling and fast style,

when people realized how
much they had profited and

how completely artificial
the appearance

of this company had been.

Nobody could really
understand and in fact

that many of Kenley
lieutenants questioned,

they said, this business
can't be making

this much money legitimately.

Something weird is going on.

Mark to market accounting
allowed Enron to book

potential future profits on

the very day a deal was signed,

no matter how little cash
actually came in the door.

To the outside world,

Enron's profits could be
whatever Enron said they were.

Things that fascinated me
was that almost all of

the Wall Street analysts who

covered Enron had buy ratings,

or strong buy ratings
on the company stock.

One analyst who didn't buy

the company line became
an enemy of Enron.

Enron CFO Andy Fastow had
his eye on John Olson,

one of the only analysts
skeptical of the Enron story.

Enron loved analysts,
strong buy recommendations.

Merrill was informed by Fastow

either you get
somebody who is on

board with us and has

a strong buy recommendation

and loves us at the same time,

or we don't do any
business with you.

Merrill Lynch fired John Olson.

Soon after Fastow
rewarded the bank with

two investment banking
jobs worth $50 million.

His job was to cover
up the fact that

Enron was becoming a
financial fantasy land.

To please the boss,

Fastow had to figure out a way
to keep the stock price up

by hiding the fact that Enron
was $30 billion in debt.

Enron was just
stashing its debt in

Fastow's companies where
investors couldn't see it.

LJM was Fastow's most
ambitious creation.

It would work magic for
Enron and it would allow

Fastow to conjure $45
million for himself.

Returns that would
exceed 2,000%,

96 individual bankers
invested in LJM

and America's major banks put up

as much as 25 million each.

The Enron fraud is the story
of synergistic corruption.

There are supposed to be

checks and balances
in the system.

The lawyers are
supposed to say no.

The accountants are
supposed to say no.

The bankers are
supposed to say no.

But no one who was supposed
to say no said no.

They all took their
share of the money

from the fraud and put
it in their pockets.

Enron paid its advisors well.

In 2001, the accounting
firm Arthur Andersen,

received one million a week.

Enron's law firm Vincent and
Elkins did nearly as well.

Oh, for instance, one
email I remember,

where the banker writes,

Enron loves these deals,

they produce cash, but they

don't have to show the
debt on the balance sheet.

Now, a high school student
can figure out that the banks

were all knowing participants
in this wrongdoing.

Merrill Lynch assisted
Enron in cooking its books

by pretending to purchase
an existing Enron asset.

When it was really
engaged in a loan.

California was
selected by Enron as

the prime place to
experiment with

this new concept of
deregulated electricity.

Commodity that normally
trades in the $35-$45 range.

High prices are when it
gets in the '50s or $1,000.

Prices aren't going to
stay 2,000 bucks forever.

Weed out the weak
people in the market,

get rid of them,
and we don't want

the people who are strolling
to stick around it.

Traders soon discovered that

by shutting down power plants,

they could create artificial
shortages that would push.

To get a little

creative and come up with
a reason to go down.

Like a forced outage type thing.

West coast traders made

nearly two billion
dollars for Enron.

The difference is between

the state of California
and the Titanic,

at least when the Titanic went
down, the lights were on.

Back in 2001, less
than four months after

Skilling's resignation,
Enron declared bankruptcy.

His accounting firm,
Arthur Andersen,

had begun destroying
its Enron files.

Enron's accounting firm,

Arthur Andersen was convicted
of obstructing justice.

With its reputation
for honesty destroyed,

America's oldest accounting
firm fell along with Enron,

and 29,000 people
lost their jobs.

We have already talked
about agency problems.

We said that in
agency relationship,

there is principle and
there is an agent.

When you talk about corporation,

the principal would
be the shareholders.

For example, like me, I'm one of

the shareholders in
Facebook or Apple.

The agent would be
the management.

For example, for Facebook,

Mark Zuckerberg is one of

the managers There are

many managers, but
he is one of them.

Similarly, Tim Cook is
the manager for Apple.

The relationship between
the management and

the principal or
the shareholder,

we call that agency
problem so the idea

is that these management,
the managers,

Mark Zuckerberg, Tim Cook,

they are expected to work

in the interest of
their shareholders.

But there could be

a conflict of interest
between these two parties.

What Mark Zuckerberg wants,

what most of the
shareholders want,

could be different and we call

that conflict of interest
between principal and agent.

Oftentimes these management,

they do certain things just
to benefit themselves.

Maybe to capture more wealth
under their management,

for example so how
do we make sure that

the interest of management

and the interest of
shareholders are aligned?

One of the ways would be to

have an incentive such that it

aligns the interests of

these two parties so

let's look at that
in the next slide.

If you see that link,

Tesla's Elon Musk,

it says, may have boldest pay
plan in corporate history.

Here, if you go down to
that story right here,

it says, Tesla has
set a dozen targets.

It's 50 billion
more than the next,

starting at 100 billion.

At this time, when
they did this,

Tesla's market value
of capitalizing,

market value of all

of their equity was
about $50 billion.

Every time Tesla hit
additional $50 billion,

like from 50 to 100 to 150,

then Elon Musk would receive
1.68 million shares.

If he did that to Tesla.

This is an example of how
shareholders wealth could be

aligned with the
management goal,

shareholders and management.

Why? Because if Elon Musk,

the manager of Tesla,

if he's getting share,

then he's more
motivated to maximize

the value of those shares
that he's receiving.

When shares value is maximized,

he becomes wealthier
and that benefits

the shareholders as well
so it's win, win for both.

That's an example of how

the management and shareholders
goal could be aligned.

Here, let's look at how money

flows between an
investor and the firm.

This craft looks a
little more complicated.

Let me make it a
little easier here.

What I call this is
actually circle of finance.

This circle, let's say it
begins with an investor.

Investor puts money
into business.

How it happens when business
issue stocks or bonds?

Business issues stocks and bonds

and investor provide
money to the business.

What does the business
do with this money?

They will put that money
into their assets.

For example, Walmart would put

their money into a new location.

That asset will ultimately
generate sales,

all of the assets
of business owns,

ultimately the idea is to

generate sales
from those assets.

Then those sales will generate,

we know what they generate?

Profit. Then that profit goes

back to investor either
in the form of dividend,

let me put that here,

or in the form of interest.

Dividend goes to shareholder.

Interest goes to creditors.

Some of this profit must also be

shared with the government.

What do I mean by that?

I mean, taxes.

Some of this profit actually
in fact also go back to

the business and we
call it reinvestment.

Many businesses retain some

of their profit and
invest into the business.

Some business like Google does
not even pay any dividend.

Some business they do
not pay any dividend.

In fact, they retain all of

their profit into the business

so that they could reinvest.

I'm one of the
shareholder of Google,

and I don't mind Google
keeping all of my profit,

not paying me any dividend
because I know all of

their reinvestment,
they're multiplying that.

Google knows how to turn
papers into gold, so to speak.

That's the circle of finance,

and what you see here.

Let's talk about
financial market now.

Let's define financial
market first.

What do we mean by financial
market? What do you think?

When we say grocery market.

Grocery market is a place
where groceries are traded.

Farmers market is a
place where farmers sell

their product and people go to

buy products from the farmers.

What do you think
financial market in

similar sense could be?

Financial market
is a place where

financial assets are traded.

Some of the example of

financial assets,
stocks and bonds.

When we say financial market,

there are two types.

One is primary market,

the other one is
secondary market.

Primary market is a place or

market where initial
public offering happens.

By initial public
offering or IPOs,

we mean this is the first
time when a company has gone

to public to raise money,
by issuing equity.

Facebook went public for
the first time back in

2013 and raised $18 billion,

it happened in primary market.

Apple and Microsoft, they

went to public back in the '80s.

Google went to public back
in the early 2000, 2002.

That's initial public offering,

the very first time companies
go public to raise money.

The secondary public
offering is when

companies go to public,
again, issue equity.

But second time,

maybe third time,
maybe fourth time,

which does not happen that often

companies usually go
to public only once.

Apple went to public back
in '80s, that's it done.

Microsoft that's it done.

Facebook went to
public once done,

but very few companies
go to public again.

Google went to public twice.

It went to public back in
2004 and then in 2006 again.

Why they don't go
public multiple times?

Because existing
shareholders, they don't

like companies going
to public again.

Because if I'm one of the
shareholders in Facebook,

I do not want Facebook
going to public again.

Because that will dilute

my ownership stake
in the company.

I don't want to share
my future profits

with some new people.

Primary market is the
location or place

where transaction
between issuing

firm and investors happen.

This is the only place

where the issuing
firm like Facebook,

Google, Microsoft,
Apple, they actually

receive money by issuing
equity to the public.

Again between the issuing
company and the investors.

The second type of market
is secondary market.

In this case, investors
trade with each other.

It is not the issuing
company and the investor,

but investors versus investors.

The parties involved in

secondary market are
either dealers or brokers.

When you think of
dealer, think of like

a car dealer means car dealer,

for example, when you
want to sell your car,

you take your car to car dealer.

He will buy the car from

you and then resell
it in the future.

They will buy, own that car,

do something to that car and

then resell it in the future.

Same thing with dealers
in the stock market.

The dealers, they
actually buy stocks from

existing investors
on the inventory of

those stocks and
then resell it in

the future to some
other investors.

There are brokers. When
you think of broker,

think of like real
estate brokers.

Brokers, they do
not own inventory,

they do not buy property
and then resell it.

They simply bring the buyer
and sellers together.

Same idea with the stock broker.

They bring buyers or

investors together who
want to buy and sell.

There are two types

of market when it comes
to secondary market.

Within secondary market,
we have two types.

One is exchange, the other
one is over-the-counter.

Exchange is an
organized location.

There is actually a
physical location,

physically organized location.

For example, New
York Stock Exchange.

You all know where it is
New York Stock Exchange,

you might say, in New York?

Yes, it is in New
York, Manhattan,

Valley Street, if you
want to be more specific.

Individuals trade
with each other,

of course, in exchange.

Then we have
over-the-counter OTC.

Over-the-counter is on
electronic only location.

Back in the days when
there was no internet

over-the-counter
would mean they're

actually used to be
physical counter.

On the other side of
counter would be the dealer

who owns inventory
of his stocks and I,

as an individual investor

would go to the
counter and buy or

sell with with the dealer
who is over-the-counter.

But the days all the
counters are digitized,

there is no physical location
for over-the-counter.

Everything is digital and the

market in the US,
the biggest market,

biggest over-the-counter
market in the whole world,

not only in the US, is NASDAQ.

The biggest exchange in
the whole world is NYC.

The biggest OTC,

over-the-counter is NASDAQ
in the whole world.

Here, trading happens
through the dealer who is

sitting over-the-counter,
digital counter.

This slide has
those two websites.

Make sure to look at those.

These are very helpful websites,

very informative for all
the financial information,

not all, for many
financial information,

we look at Yahoo Finance.

An excellent website has tons of

information on income
statement, balance sheet,

the trading volumes, the
price of the stocks,

including the
historical information.

Have a look at it. We'll look

at that website
often in the future.

Then the other website
which I talked about in

our first live meeting
is investopedia.com.

It is a website.

You could call it a web
dictionary for financial terms.

Really, it is a dictionary
you could completely rely on.

You could type like any
terminology, for example,

type agency theory or agency
problem on investopedia.com.

It will explain to
you what that is.

It's an excellent website,
question comment.

You know what to do, if
you have question comment,

shoot me an email or just type
it on the Google doc file.

Anonymously, you can do that.

Here is a quick
quiz for yourself.

Do you think you can
answer all of these

without blinking. Try it.

It says the end, but there is

one more slide on the next page.

Well, by the way,
that handsome guy is

me and behind that is
New York Stock Exchange.

It's an exchange, the
organized location. Anyway.