Month: March 2021

The principles of option pricing theory     Option terminology An option       The right but not an obligation, to buy or sell a particular good at an exercise price, at or before a specified date.     Read More …

Introduction   Alternatives to the use of existing WACC as a discount rate in project appraisal   We have now established that the existing WACC should only be used as a discount rate for a new investment project if the Read More …

Overview of the WACC   A key consideration in financial management is the firm’s WACC. The WACC is derived by finding a firm’s cost of equity and cost of debt and averaging them according to the market value of each Read More …

Introduction   In the previous chapters we have seen that the dividend decision is one of three key inter-related decisions that must be made by the financial manager (alongside the investment decision and the financing decision).   This chapter covers Read More …

The financing decision Introduction   As discussed at the beginning of Chapter 2: Investment appraisal, the financial manager often has to decide what type of finance to raise in order to fund the investment in a new project i.e. there Read More …

Introduction   In the previous chapter, we looked closely at the investment decision – one of the main decisions faced by the financial manager.   In all cases so far, our considerations have been restricted to organisations operating in a Read More …

Introduction – Investment, financing and dividend decisions Three of the key decisions facing the financial manager (identified in Chapter 1 above) are: Investment – what projects should be undertaken by the organisation? Finance – how should the necessary funds be Read More …

Key roles and responsibilities of the financial manager The financial manager is responsible for making decisions which will increase the wealth of the company’s shareholders. The specific areas of responsibility are listed below. However, it is also important that the Read More …

TIME SERIES ANALYSIS

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