Ex. III. Read the names of the places of interest you have put down in the previous exercise and try to remember their description. If you have difficulty, consult the text

Audition: Internet Technologies.

Ex. I. Listen to the text after you've scanned the word list and answer the questions below.

Word list:

· enhance

· multimedia

· curriculum

· implement

· access

· listserve

· netiquette

· guidelines

· dissemination

· sophisticated

· infancy

Questions:

1. Why should the Internet play a major role in the foreign language classroom?

2. What does the Internet have to have?

3. What is the most commonly used Internet application?

4. What is the LISTSERV?

5. Why are electronic journals popular?

Unit IX

Part I

Ex. I. Pre-text activities. Answer the following questions:

1. How different are corporate policies from privately-owned business policies?

2. What issues do you think should corporate finance include?

Ex. II. Read the text and answer the questions following it.

Corporate Finance

Among the most important questions of corporate finance are:

1. What long-term investment strategy should a company take on?

2. How can cash be raised for the required investment?

3. How much short-term cash flow does a company need to pay its bills?

One way that companies raise cash to finance their investment activities is by selling or "issuing" securities. The securities, sometimes called financial instruments or claims, may be roughly classified as equity or debt, loosely called stocks and bonds. The difference between equity and debt is a basic distinction in the modern theory of finance.

A company raises cash by using securities to the financial markets. Roughly speaking, there are two basic types of financial markets: the money markets and the capital markets.

So, what is corporate finance? Suppose you decide to start a firm to make tennis balls. To do this, you hire managers to buy raw materials, and you assemble a work force that will produce and sell finished tennis balls. In the language of finance, you make an investment in assets such as inventory, machinery, land and labor. The amount of cash you invest in assets must be matched by an equal amount of cash raised by financing. When you begin to sell tennis balls, your firm will generate cash. This is cash that you will be able to take out of the firm. You hope that the amount of cash you take out of the firm is greater than the amount you put into it. This is the basis of value creation. The purpose of the firm is to create value for you, the owner. The value is reflected in the framework of the simple balance sheet model of the firm (See Fig. 8).

Ex. III. Read the names of the places of interest you have put down in the previous exercise and try to remember their description. If you have difficulty, consult the text - student2.ru Fig. 8. The balance sheet model of a firm.

The assets of the firm are on the left-hand side of the balance sheet, These assets can be thought of as current and fixed. Fixed assets are those that will last a long time, such as a building. Some fixed assets are tangible, such as machinery and equipment. The other category of assets, current assets, comprise those that have short lives, such as inventory. The tennis balls that your firm has made but has not yet sold are part of its inventory.

Before a company can make an investment in assets it must obtain financing, which means that it must raise the money to pay for the investment. The forms of financing or liabilities are represented on the right-hand side of the balance sheet. A firm will issue (sell) pieces of paper called debt (loan agreement) or equity shares (stock certificates). Just as assets were classified as long lived or short lived, so too are the liabilities. A short-term debt is called current liability. Short-term debt represents loan and other obligations that must be repaid within 1 year. Long-term debt is debt that does not have to be repaid within 1 year. Shareholders' equity represents the difference between the value of the assets and the debt of the firm.

We use the terms capital budgeting and capital expenditure to describe the process of making and managing expenditures of long-lived assets.

How can the firm raise cash for required capital expenditures? This question concerns a right-hand side of the balance sheet. The answer of this involves the firm capital structure. This reflects the extent to which a firm relies on current and long-term debt and equity.

Financing arrangements determine how the value of the firm is sliced up. The persons or institutions that buy debt from the firm are called creditors. The holders of equity shares are called shareholders.

Questions:

1. What are securities and how are they classified?

2. What does making an investment in assets involve?

3. Describe the left and right-side parts of a balance sheet.

4. What is the difference between fixed and current assets?

5. What is "debt" in the language of finance?

6. What does current liability represent?

7. What in your opinion do capital budgeting and capital expenditure involve?

Active words and phrases

corporate finance	корпоративні фінанси	patent	патент
assets	актив, майно	trademark	фабрична марка
current assets	поточний капітал	liabilities	пасив
fixed assets	нерухомий капітал	stock certificates	акціонерний сертифікат
securities	цінні папери	obligations	зобов’язання
stocks	1) основний капітал 2) акції 3) облігації	capital budgeting	розробка фінансового бюджету
bonds	облігації	raise cash	отримувати гроші готівкою
tangibles	матеріальні цінності	inventory	матеріально-виробничі запаси
intangibles	нематеріальні цінності	equity	звичайна акція