chap025.ppt
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This document summarizes what is known and not known about finance based on Chapter 25 of the textbook "Fundamentals of Corporate Finance". It lists the key concepts that are well established in finance theory, such as net present value, risk and return, efficient capital markets, and option theory. It also outlines important questions that remain unknown, such as what fully determines project risk and present value, whether the understanding of risk and return is incomplete, and how to explain observed phenomena like capital structure choices, merger waves, and the value of liquidity.
chap025.ppt
- 1. Chapter 25 Fundamentals of Corporate Finance Fifth Edition Slides by Matthew Will McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved What We Do and Do Not Know About Finance
- 2. Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin 25- 2 What We Know Net Present Value Risk and Return Efficient Capital Markets MM’s Irrelevance Propositions Option Theory Agency Theory
- 3. Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin 25- 3 What We Do Not Know What determines project risk and PV ? Risk and return - Have we missed something? Are there important exceptions to the efficient market theory? How can we explain capital structure? How can we resolve the dividend controversy? How can we explain merger waves? What is the value of liquidity?