Reference no: EM132673077

Financial Markets and Institutions

INTRODUCTION

Sound financial markets and institutions are vital for economic success throughout the world. Capital markets are essential factors for economic development and production. The efficient accumulation and allocation of economic resources through primary and secondary markets provide the basis for efficient market economies across the globe. In this unit we will explore the factors that affect these markets and the effects these markets have on companies' decisions regarding capital structure and financial policy.

OBJECTIVES

To successfully complete this learning unit, you will be expected to:

1. Identify the most important factors that affect capital structure.

2. Identify markets used to create or modify a firm's capital structure.

3. Describe the importance of financial institutions in the performance of capital markets across the globe.

4. Describe the effects of government actions on capital markets across the globe.

Unit 4 Assignment Preparation

Continue to prepare for your Unit 4 assignment, Financial Statement Analysis. If you have not yet done so, read the instructions for this assignment in Unit 4. Take some time this week to continue to develop your analysis.

Unit 2 Discussion 1

Factors Influencing Capital Structure

Based upon the readings in this unit and your understanding of capital markets, discuss the following questions, also indicate a real world example using a company:

- What difference is there between investors and the general public?

- What role do investors play in the evolution of capital markets?

- What role do financial institutions play in the capital markets?

- What role do governments play in the capital markets?

- What are the primary factors that influence decisions regarding the capital structure of corporations?

- How do these factors change over time?

- What markets do we refer to with the term "capital markets"?