firon ciol Mongtment firanial Hongment

shh corcUncod th the

p'anng ond contnl the fi financial 00ures

Fnona

and

mavituirirg stoctkoldu walt

Finonciol Nanagement inudes
- Finenial
ploming
- Roi ng
Firanial re9oUrCes
- Morgement
- Cohhul Fihan ial SOUrCe4.

8. Fincneial decitiony :

. Snvesmenh deciion

Dvidend deciGon

maim ahon
wcalHh mahinizatien
 finanval

5. An invertor ent Fnd out the prestnt value

qhe
bi recerred aptor
of Soooo

intcet rate i

15 year)

-Soo00X o75

= 1375o

-sseSo (cvfee.s)
+. Risk und Retn:
refers to the degree cf vaviaLifity n acheal
cF
Risk
ra hun
retn Fm he Capect
Greates the vovieliliy, greohu
venyabiliy,fe he itkl
Fecce the

Risk :
Caues oF
. arong Decitien
iming cF investent
. ong
Johe of
Amount of
investment
Nohe indesny
maitel risk
Sgtmohe risk Totyrst ate risk
- purcbetina p
Buine9 vitk
- Snte'nalrisk
-
Exfunal risk

.finencic risk
The of ony imvestor i o maimze

enpected

" Ralized shon

·Enpeched vehon
Couponert of Tetnn:

Curent eton : d.dend a inteoest

the invetnint

whn : apneciahom d depeciahom

Copil.)

Mealuvcmint oF Rehun:

" stan dayd deviahor

Vaiance

Ll T0sk and etrn:

.Fonhip
ond rec ly vaiable
not cerfoin d Fined.
even all 6

punibliy ot long
of
9. veluatn
Bendy

A bond
laan given by, he
4he inybumtnt
Bondy Can

inshhhons 4ha gvern me,

bioad'y clsihed inh Tor-soving bonds an

incMe bondy

Feotwy oF Binds:
Sodenhue

pincipal s*paymost
credit sa hng
callable bonds

Type:
’ Bosed
Monic ipal bond!.

coupon Loonds
Corpotote bonds
Tron3uny shiys
Flotal rata bunds
Based on vaialily
callasle bond
"onvau-le londs ond non- convolk bonds
 rredeemalle bondy
1edeemale and
SCCue bonds

On basis

bond.
" siobng fund

9. ophon valohan:
ophon several Hhings
+he holaut
ophon
vigkt, wiHheat
seU) ah
an oged price,on o

Le fde Speibed paiod

an asse

call

aet i called

"phon
enercised
can be
che pce
a
stite
caled eveycise price

nce.
 Europon phin

Simple intmiad tros

ophon valuahon mode!.

glat.seheles
fathe promije prosley
lo. (a)
Tasle vay) Fot'e
(evf Ayors)
toeoeo A(I2485)

12-68

= So07·(9

vo'es Fuhys
p(cvaet) C-I Tasle
(-)
p(eo15)

"C-3
I1. Tunchion oF
Determining the inanial neds
doision
.Fioanung
Dovestment decision
aorking Capilal decision
Dividend poliy deitiog
Finonce Cental
Rute -fune hen

Intenal vate of rehn:

Petent velue Factoy PVF

cayh inFlow - c2

Capital Budget:
Copilal budg ing reFers 4
phnning
cyailasle capital -F8 4he pupure
deplyment of

of neiizing long-tuy phhility

making invslment
deciun egadmg capital epen dihye.
13. NPV - net present value

ohe presen value is a claysie methad

evoluahng 4he 'inelment prposd

prestot value of cosh arlows sheuld be calrulated
uing the opportunihy ca pital al

dicount Yate.
project should be accpted iF
NPV is pibve.
the

prblay:

cash inFlows

NPV present value - Inveytmen t

900 300
prtsenlvaua
(ltolo) (1+0o (U+o-1c' (i*010) (*o1o)

qo0 (PV,o.) +&oo (PvG,) 43o (PV5,e)

4 600 ( PvE,oo ) Soo (Pvfs,oe)
o15 I +
q00xo 909 + 500 x o26+ 100 X

81810 + G60 80 4 525.10 + 409.%o + 310

212S