Corporate Finance

  • the law of one price - impact on local and global commerce 
  • theory versus reality -  consequences of wrong prices 
  • valuation practices ( highest and best use standard) 
  • DCF ( expected cash flows, discount rates) 
  • market comparisons( closeness of comparable, strengthen of attributes, etc.)
  • asset or cost ( not visually applicable for most "going concern" entities 
  • goal of finance : valuation 
  • Valuation is forward looking ( prospective) 
  • Today's price is dependent on future cash flows into infinity 
  • historical performance guides our ability to predict future expectations 
  • finance studies the measurment of values 
  • limitation of finance 
    • useful only when elements are quantifiable in monetary terms 
    • inability to measure significant qualitative values ( e.g. internal, employee loyalty, etc.)

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