A study on concepts of finance for finance decision making

May 28th, 2015
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Abilene Christian University
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The Beta that we will get (say from Bloomberg or Barra) will be a levered Beta. Recall what Beta is: in simple terms, how risky a stock is relative to the market. Other things being equal, stocks of companies that have debt are somewhat more risky that stocks of companies without debt (or that have less debt). This is because even a small amount of debt increases the risk of bankruptcy and also because any obligation to pay interest represents funds that cannot be used for running and growing the business. In other words, debt reduces the flexibility of management which makes owning

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Knowledge and understandingUnderstand the fundamental concepts of financial management;Understand the time value of money;Appreciate the concept of risk;Know about securities and their valuation;Understand the nature of projects and their valuation;Understand the concepts of corporate valuation; James C. Van Horne, John M. Wachowicz, Jr, Fundamentals of Financial Management, 11th edition, Prentice Hall, 2006 What is financeFinance is the set of activities dealing with the management of funds. More specifically, it is the decision of collection and use of funds. It is a branch of

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