Corporate restructuring 1960s- Mergers of unrelated firms formed huge conglomerates 1980s-Investors purchased conglomerates and sold off the pieces as independent companies. 1990s- Strategic mergers of related firms to create synergies
Innovations in Risk Management Futures contract a contract to buy or sell a stated commodity or financial claim at a specified price at some specified future time
Liquid asset management S CASH- motives for holding casha Transactions: to meet cash needs that arise from doing business. Precautionary: having cash on hand for unexpected needs Speculative: to take advantage of potential profit-making situations
2 concepts that enhance our understanding of risk... 1) Operating Leverage affects a firm's business risk. 2) Financial Leverage affects a firm's financial risk
Top Creators of shareholder value 1999 invested cost of MVA capital return capital Microsoft3282571095456.16%12.64 Gen elect285,320652981929911.92 Intel