Principles of Finance
Principles of Finance FIN 3403
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This 7 page Class Notes was uploaded by Jamie Frami on Wednesday September 23, 2015. The Class Notes belongs to FIN 3403 at University of South Florida taught by Scott Besley in Fall. Since its upload, it has received 17 views. For similar materials see /class/212612/fin-3403-university-of-south-florida in Finance at University of South Florida.
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Date Created: 09/23/15
Exam 1 Study Guide Chapter 1 Natural Law 7 the Law is an inherent intuitive set of principles Legal Positivism 7 the Law is what it is established and stated to be Legal Realism 7 the Law is what the particular decision maker decides it to be Critical Legal Studies the Law is an implement of societal control to maintain the power of the elite class Substantive and Procedural Law Substantive7 law creating rights duties and remedies Procedural7 rules for enforcing substantive law through E Public and Private Law Public7 law dealing with the relationship between government and individuals constitutional criminal and administrative law Private7 law governing the relationships among individuals andor legal entities such as corporations Sources of Law Constitutional Law fundamental law of a government establishing its powers and limitations Judicial Law Common Law body of law developed by the courts Legislative Law statutes or ordinances adopted by legislative bodies includes Treaties state congress Administrative Law rules regulations orders and decisions made by administrative agencies Uniform Laws Restatement of Laws A scholarly researched summary of the general principles of common law in a particular area of law Uniform Acts Amodel statute drafted by conference and adopted by a number of states UCC UPA etc model of state law example drinking age law has been adopted by all states Hierarchy of Courts FL Supreme Court US Supreme Court FL District Court of Appeals US Circuit Court of Appeals FL Circuit Courts US District Courts FL County Courts Legal Analysis pg 12 example Jackson bought a new car and was going to sell his old one for 2500 His cousin Trina called and said she needed a car so Jackson said he d give it to her for free The next day a coworker offered 3500 for the car and he sold it to the coworker instead Did Jackson have the right to sell the car or did he legally gave it to a Trina as a gift A Because the donor Jackson didn t deliver the car to the donee Trina legally no gift was made Jackson was free to sell the car Chapter 2 Ethical Theories Ethical Fundamentalism 7 individuals look to a central authority or set of rules to guide them in ethical decision making Ethical Relativism 7 actions must be judged by what individuals subjectively feel is right or wrong for themselves Situational Ethics 7 one must judge a person s actions by first putting oneself in the actor s situation put yourself in their shoes Utilitarianism 7 moral actions are those that produce the greatest net happiness for society as a whole compared with net pain e g Jeremy Bentham Act Utilitarianism 7 assesses each act separately according to whether it maximizes good over bad Rule Utilitarianism 7 supports rules that on balance produce the greatest pleasure for society Cost Benefit Analysis 7 quantifies the benefits and costs of alternatives Deontology 7 looks art all steps notjust the end THE END DOESN T JUSTIFY THE MEANS Social Ethics Theories Social Egalitarians 7 believe that society should provide all its members with equal amounts of goods and services regardless of their relative contributions e g Karl Marx Communism Distributive Justice 7 stresses equality of opportunity rather than results Level the playing eld Libertarians 7 stress market outcomes as the basis for distributing society s rewards Society controls all Arguments against Social Responsibility Pro tability 7 because corporations are arti cial entities established for profitmaking activities their only social obligation should be to return as much money as possible to shareholders Unfairness 7 whenever corporations engage in social activities such as supporting the arts or education they divert funds rightfully belonging to shareholders andor employees to unrelated third parties Accountability 7 a corporation is subject to less public accountability than public bodies Expertise 7 although a corporation may have a high level of expertise in selling its goods and services there is no guarantee that any promotion of social activities will be carried on with the same degree of competence Arguments For Social Responsibility The Social Contract 7 society allows for the creation of corporations and gives them special rights so corporations are responsible to society Less Government Regulation 7 by taking a proactive role corporations create a climate of trust and respect that has the effect of reducing government regulation Goodwill 7 corporate ethical behavior and social involvement creates goodwill which simply makes good business sense Fiduciary Duty 7 a corporation s fundamental legal duty is to its shareholders Chapter 3 Right of Appeal is to the District Court of Appeal You have a right to appeal in this court Discretionary Review is to the Florida Supreme Court Decides if they will hear appeal case Stare Decisis Stare Decisis 7the doctrine that once an issue has been decided by a court all courts lower in authority than that court must follow that decision even if they do not agree with it Subject Matter Jurisdiction 7 authority of a court to decide a particular kind of case based on either the type of claim or amount at issue Jurisdiction over the Parties 7 the power of a court to bind the parties to a suit Subject Matter Jurisdiction Exclusive Federal Jurisdiction 7 Federal crimes bankruptcy antitrust patent trademark copyright and other speci ed cases Concurrent FederalState Jurisdiction 7 concurrent means more than one court has authority to hear the same case State and Federal courts have concurrent jurisdiction over 1 Federal question cases cases arising under the Constitution statutes or treaties of the United States that do not involve exclusive Federal jurisdiction and 2 diversity of citizenship cases involving more than 75000 Exclusive State Jurisdiction 7 State courts have exclusive jurisdiction over all matters to which the Federal judicial power does not reach Removal Jurisdiction 7 In most circumstances when a case is led in state court where there is concurrent jurisdiction the defendant may remove it to Federal Court Federal and State Jurisdiction Jurisdiction over the Parties In Personam Jurisdiction 7 jurisdiction based upon claims against a person in contrast to jurisdiction over the person s property In Rem Jurisdiction 7 jurisdiction based on claims against property located In Personam Jurisdiction may exist when a person is a resident of a state39 is served while being present in a state or based on a longarm statute Longarm statutes allow states to exercise jurisdiction over outofstate defendants when there is a connection between the defendant and an event in the state Civil Procedure 1 PlaintilT drafts initial pleadings including summons and complaint 2 PlaintilT files complaint in appropriate court and has summons issued 3 PlaintilT has summons and complaint served on Defendants 4 Defendants must answer typically within 20 days of service or default may be entered The Answer Phase 7 Defendant may respond in a variety of ways Motion to Dismiss 7 Defendant may move to dismiss complaint prior to answering these defenses may also be included in the answer Answer 7 defendant39s pleading in response to the plaintiff39s complaint May include a irmative defenses Counter Cross or Third Party Claims 7 Defendant may bring claims against the Plaintiff or another party along with the answer Summary Judgment 7 final ruling by the judge in favor of one party based on the evidence disclosed by discovery Arbitration 7 a nonjudicial proceeding in which a neutral party selected by the disputants renders a binding decision award Arbitration is Increasingly Common Mediation 7 a formal nonbinding process in which a quali ed third party acts as an intermediary between the disputing parties and proposes solutions for them to consider Mediation is the largest single resolver of bonafide cases in both systems Virtually every civil case will be sent to mediation Disposition By Motion 7 in most states much more common in federal court than in state court Chapter 4 Federalism 7 the division of governing power between the Federal government and the States Federal Supremacy 7 Federal law takes precedence over con icting State law Federal Preemption 7 right of the Federal government to regulate matters within its power to the exclusion of regulation by the States Judicial Review 7 Court examination of governmental actions to determine whether they conform to the US Constitution Separation of Powers 7 allocation of powers among executive legislative and judicial branches of government State Action 7 actions of governments to which constitutional provisions apply The Constitution does not limit private behavior 7 it may only protect it Powers of Government Federal Commerce Power 7 exclusive power of the Federal government to regulate commerce with other nations and among the States State Regulation of Commerce 7the dormant commerce clause of the Constitution restricts the States power to regulate activities if the result obstructs interstate commerce Types of laws are likely to be invalid Laws that levy taxes on goods moving in commerce through the state except sales taxes to retail purchasers Laws that unduly burden interstate commerce such as by strict regulation Laws that discriminate against outofstate businesses in order to favor instate Granholm Speech Freedom of Speech 7 First Amendment protects most speech Corporate Political Speech 7a corporation s right to speak out on political issues Citizen s United Commercial Speech 7 expression related to the economic interests of the speaker and its audience receives a lesser degree of protection Defamation 7 a tort consisting of a false communication that injures a person s reputation receives limited constitutional protection Limitations on Government Due Process 7 Fifth and Fourteenth Amendments prohibit the Federal and State governments from depriving any person of life liberty or property without due process of law Substantive Due Process 7 determination of whether a particular governmental action is compatible with individual liberties Procedural Due Process 7 requires the governmental decisionmaking process to be fair and impartial if it deprives a person of life liberty or property Eminent Domain and the Takings Clause Government taking of private property is limited by Due Process nor shall private property be taken for public use without just compensation 5Lh Amendment Equal Protection Equal Protection 7 requires that similarly situated persons be treated similarly by governmental actions Rational Relationship Test 7 standard of review used to determine whether economic regulation satis es the equal protection guarantee Strict Scrutiny Test 7 exacting standard of review applicable to regulation affecting a fundamental right or involving a suspect classi cation Intermediate Test 7 standard of review for a regulation based on gender and legitimacy Chapter 5 Agencies can be executive or independent 7 independent agency leaders are appointed for set terms and cannot generally be red Functions of Administrative Agencies Rulemaking 7 process by which administrative agencies promulgate rules of law Legislative Rules 7 substantive rules issued by an administrative agency under the authority delegated to it by the legislature Interpretative Rules 7 statements issued by an administrative agency indicating how it construes its governing statute Procedural Rules 7 rules issued by an administrative agency establishing its organization method of operation and rules of conduct Enforcement 7 process by which agencies determine whether their rules have been violated Many agencies have investigative authority including subpoena powers and can obtain and review information to determine whether their rules have been violated They may also have the ability to assess nes or other penalties Adjudication 7 formal methods by which an agency resolves disputes In cases where an agency has taken enforcement action or has denied an application or similar action the agency may have the ability to have the matter litigated in agency administrative proceedings conducted by an administrative law judge Limits on Administrative Agencies Judicial Review 7 acts as a control or check by a court on a particular rule or order of an administrative agency Final orders of agencies in their adjudicative capacity may be appealed to an appropriate court Court must give credence of factual ndings supported by appropriate standard of evidence Courts review legal determinations de novo but must give weight to agency interpretation ie Chevron deference m Felony 7 a serious crime Misdemeanor 7 aless serious crime Lower degree number is more severe A capital felony is one punishable by the death penalty Essential Elements Generally Actus Reus 7 a wrongful or prohibited act 7 battery homicide etc Mens Rea 7 criminal intent or mental fault 7the degree of mental fault required depends on the crime Degrees of Mental Fault Vicarious Liability 7 liability imposed for acts of employees if the employer directed participated in or approved of the acts ArthurAnderson case Liability of a Corporation 7 under certain circumstances a corporation may be convicted of crimes and punished by frnes Definitions Larceny 7 nonconsensual taking and carrying away of personal property of another with the intent to deprive the Victim permanently of the property Embezzlement 7 taking of another s property by a person who was in lawful possession of the property False Pretenses 7 obtaining title to property of another by means of representation one knows to be materially false made with intent to defraud Robbery 7 committing larceny with the use or threat of force Burglary 7 under most modern statutes an entry into a building with the intent to commit a felony Extortion 7 making unlawful threats to obtain money or property Bribery 7 offering money or property to a public official to in uence the offrcial s decision Forgery 7 intentional falsification of a document to defraud Bad Checks 7 knowingly issuing a check without funds suf cient to cover the check Defenses t0 Crimes Defense of Person or Property 7 individuals may use reasonable force to protect themselves other individuals and their property Duress 7 coercion by threat of serious bodily harm a defense to criminal conduct other than murder Mistake of Fact 7 honest and reasonable belief that conduct is not criminal intent crimes only Constitutional Protections Fourth Amendment 7 protects individuals against unreasonable searches and seizures Fifth Amendment 7 protects persons against self incrimination Miranda rights double jeopardy and being charged with a capital crime except by grand jury indictment Requires due process including Brady discovery Sixth Amendment 7 provides the accused with the right to a speedy and public trial the opportunity to confront witnesses process for obtaining witnesses and the right to counsel Eighth Amendment 7 prohibits excessive bail and excessive nes or cruel and unusual punishments Chapter 7 Tort 7 from the Latin meaning twisted it is an action that is a wrongful under civil law Intentional Tort 7 A tort in which the wrongful action was undertaken deliberately with the intention to cause the specific act to occur or was taken knowing that it would occur Torts Against Individuals Assault 7 intentional in iction of apprehension of immediate bodily harm or offensive contact Battery 7 intentional in iction of harmful or offensive bodily contact False Imprisonment 7 intentional and unreasonable confining of a person against her will In iction of Emotional Distress 7 extreme and outrageous conduct causing severe emotional distress Defamation 7 false communication that injures a person s reputation Libel 7 written or electronically transmitted defamation Slander 7 spoken defamation Invasion of Privacy Appropriation of Name or Identity 7 unauthorized use of a person39s identity Intrusion into Seclusion 7 unreasonable and offensive interference with the seclusion of another Public Disclosure of Private Facts 7 offensive publicity of private information False Light 7 offensive and misleading publicity about another Torts Against Property Trespass 7 wrongfully entering land of another Nuisance 7 a nontrespassory interference with another39s use and enjoyment of land Conversion 7 unauthorized intentional exercise of control over another s personal property Torts Against Businesses Interference with Contractual Relations 7 intentionally causing one of the parties to a contract not to perform Disparagement 7 publication of false statements about another s property or products business defamation Fraudulent Misrepresentation Fraud 7 a false statement made with knowledge of its falsity intended to induce another to act Defenses to Intentional Torts Consent 7 a person may not recover for injury for an incident to which he willingly and knowingly consents Self Defense 7 a person may take appropriate action to prevent harm to himself where time does not allow resort to the law Legal Privilege 7 parties may be legally entitled to act in certain ways
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