Conclusion: What We Do and Do Not Know about Finance Principles of Corporate Finance Brealey and Myers Sixth Edition Slides by Matthew Will Chapter 35 © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw Hill
© The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw Hill Topics Covered What We Do Know What We Do Not Know
© The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw Hill Most Important Ideas in Finance Net Present Value Capital Asset Pricing Model (CAPM) Efficient Capital Markets Value Additivity & Law Conservation of Value Capital Structure Theory Option Theory Agency Theory
© The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw Hill Unsolved Problems In Finance How major decisions are made? What determines project risk and PV ? Risk and return - What have we missed? How important are the exceptions to the Efficient Market Theory? Is management an off-balance-sheet liability?
© The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw Hill Unsolved Problems In Finance How can we explain the success of new markets and new securities? How can we resolve the dividend controversy? What risks should a firm take? What is the value of liquidity?