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nt assets Fixed assets,Shortterm debt Longterm debt Equity shares,Ultimately, the firm must be a cash generating activity.,The cash flows from the firm must exceed the cash flows from the financial markets.,Financial Markets,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 overthecounter in a dealer market.,Financial Markets,Firms,Investors,Sue,Bob,Investment Environment,Two Elements of Investment: Time and Risk,Risky Investment and Capital Budgeting,The basic feature of a debt is that it is a promise by the borrowing firm to repay a fixed dollar amount of by a certain date. The shareholder’s claim on