TAILIEUCHUNG - Ebook Corporate finance - The core (4/E): Part 2

(BQ) Part 2 book “Corporate finance - The core” has contents: Capital markets and the pricing of risk, capital markets and the pricing of risk, investor behavior and capital market efficiency, financial distress, managerial incentives and information, payout policy, and other contents. | Part Risk and Return THE LAW OF ONE PRICE CONNECTION. To apply the Law of One Price correctly requires comparing investment opportunities of equivalent risk. In this part of the book, we explain how to measure and compare risks across investment opportunities. Chapter 10 introduces the key insight that investors only demand a risk premium for risk they cannot costlessly eliminate by diversifying their portfolios. Hence, 4 Chapter 10 Capital Markets and the Pricing of Risk only non-diversifiable market risk will matter when comparing investment opportunities. Intuitively, this insight suggests that an investment’s risk premium will depend on its sensitivity to market risk. In Chapter 11, we quantify these ideas and derive investors’ optimal investment portfolio choices. We then consider the implications of assuming all investors choose their portfolio of risky investments optimally. This assumption leads to the Capital Asset Pricing Model (CAPM), the central model in financial economics that quantifies the notion of “equivalent risk” and thereby provides the relation between risk and return. In Chapter 12, we apply these ideas and consider the practicalities of estimating the cost of capital for a firm and for an individual invest- Chapter 11 Optimal Portfolio Choice and the Capital Asset Pricing Model ment project. Chapter 13 takes a closer look at the behavior of individual, as well as professional, investors. Doing so reveals some strengths and weaknesses of the CAPM, as well as ways we can combine the CAPM with the principle of no arbitrage for a more general model of risk and return. Chapter 12 Estimating the Cost of Capital Chapter 13 Investor Behavior and Capital Market Efficiency 349 349 8/20/16 3:42 PM CHAP TE R 10 Notation pR probability of return R Var (R ) variance of return R SD (R ) standard deviation of return R E [R ] expectation of return R Divt .

• Ngân hàng - Tín dụng
• Corporate finance
• Capital markets
• Investor behavior
• Capital market efficiency
• Payout policy
• Managerial incentives
• Intermediate corporate finance
• Lecture Intermediate corporate finance
• Tài chính doanh nghiệp
• Corporate valuation
• Value based management
• Fundamentals of corporate finance
• Business organization
• Financial management
• International corporate finance
• Capital market history
• Raising capital
• Financial leverage
• Financial reporting
• Social welfare
• Forward contracts
• The stock markets
• Basic return concepts
• Portfolio theory
• Bond valuation
• Basic stock valuation
• Accounting for financial management
• Analysis of financial statements
• Financial planning
• Forecasting financial statements
• Capital budgeting
• Decision criteria
• Estimating cash flows
• Real options
• Capital structure decisions
• The levered firm
• Cash management
• Financial distress
• Hedging risk
• Warrants and convertibles
• Principles of corporate finance
• Understanding options
• Valuing options
• Financial analysis
• Financial manager
• Financial institutions