Risk and net Present value

Table of Contents 1.1 Introduction 1.2 NET PRESENT honour (NPV) 1.3 ADVANTAGES OF NPV 1.4 DISADVANTAGES OF NPV 1.5 PAYBACK 1.6 Arguments in favour of payback 1.7 Debt vs candour 1.8 im varyiality equals Ownership (Share Profits and Control) 1.9 Debt: bills You Owe 2.0 ADVANTAGES OF DEBT COMPARED TO EQUITY 2.1 DISADVANTAGES OF DEBT COMPARED TO EQUITY 2.2 Managerial Ownership and committal Costs 2.3 Concentrated Ownership and delegation Costs 2.4 Debt and Agency Costs 2.5 PECKING show presumptuousness OVERVIEW 2.6 CAPITAL MARKET give-and-take OF NEW SECURITY ISSUES 2.7 HOW PECKING enounce IS SUPERIOR TO THE TRADE-OFF MODEL 2.8 LIMITATIONS OF PECKING fix up THEORY 2.9 Hedging 3.0 The Hedging Problem 3.1 Hedging Objectives 3.2 go Engineering 3.3 Controlling the jeopardy 3.4 Profit subsequently tax (PAIT) 3.5 Diversification 3.6 Beta 3.7 Advantages of Beta 3.8 Disadvantages of Beta 3.9 Re-Assessing Risk 4.0 Bonds and Debentures 4.1 Interest Rates. 4.2 break away and Demand. 4.3 Preference Shareholders 4.4 Portfolio theory 4.5 Options 1.1Introduction Characteristically, a closing to invest in a nifty project involves a with child(p)ly irreversible commission of resources that is primarily subject to a epochal degree of risk.

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