TAILIEUCHUNG - Lecture Business finance (9/e) - Chapter 2: Consumption, investment and the capital market

Chapter 2 introduces you to consumption, investment and the capital market. After completing this unit, you should be able to: Explain how a company’s managers can, in principle, make financial decisions that will be supported by all shareholders; explain how the existence of a capital market makes this result possible; identify the company’s optimal investment/dividend policy under conditions of certainty. | Chapter 2 Consumption, Investment and the Capital Market 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 Learning Objectives Explain how a company’s managers can, in principle, make financial decisions that will be supported by all shareholders. Explain how the existence of a capital market makes this result possible. Identify the company’s optimal investment/dividend policy under conditions of certainty. 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 Fisher’s Separation Theorem: A Simplified Example The foundation for many fundamental results of finance theory: Addresses the question of how management deals with diverse preferences for dividends and investment in a company with more than one shareholder. Assumptions Certainty. Frictionless capital markets. Interest rate for borrowers equals interest rate for lenders. 3 3 3 3 3 3 3 3 3 6 13 13 13 13 13 13 13 13 Fisher’s Separation Theorem: A Simplified Example (cont.) Implication of theorem A company can make dividend/investment decisions that are in the .

• Tài chính doanh nghiệp
• Business finance
• Lecture Business finance
• Capital market
• Sources of finance
• Financial management
• Financial decisions
• Leasing finance
• Sources of long term finance
• Long term finance
• Equipment finance
• Ordinary shares
• Long term debt
• Dividend Policy
• Capital structure
• Capital structure decisions
• Capital market efficiency
• Futures contracts
• Option markets
• Analysis of takeovers
• International financial management
• Management of short term assets
• Financial mathematics
• The time value of money
• Project evaluation
• Project evaluation methods
• Portfolio theory
• Aasset pricing
• Financial intermediaries
• Sources of short term debt