Topic Flow Chart.pptVIP

Topic Flow Chart Goal of Finance = Maximize Value of Firm HOW? Get the most cash Steps 1. Methods to evaluate projects cash flow (NPV, IRR, etc) 2. Develop risk adjusted discount rates for use in NPV 3. Apply NPV, IRR, Decision Trees, PVI, etc to capital budgeting decisions 4. Changes in capital structure influence discount rates 5. Financial Distress can result form changes in capital structure Efficient Capital Markets Switches gears Past lectures decided how to spend money (invest) Today’s lecture deal with raising money (financing decisions) Fisher Separation Theorem Market