16642 Lecture 1: Introduction
Document Summary
Maximising stakeholder"s wealth: fisher"s separation theorem. Asset valuation: rational portfolio theory, implications. Investment & valuation: investment: an action of investing money for profit. Buy bonds for return: valuation: a process of determining the present value of an asset by an authorised person. Financial assets & capital markets: a financial asset" is a claim to a series of cash flows against some economic unit. Only something that produces cash flows; or that can sell to produce a cash flow in the future: a capital market" is the medium for the issue and exchange of assets. Market value of all the shares of a company on issue increase. Share price x number of shares issued. Discounted cash flow model (dcf: bondholders, property investors, lenders, project partners. Present value of a stream of cash flows that expected to generate. Fisher"s separation theorem: the theorem is named after the economist irving fisher.