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Corporate Finance - Coggle Diagram

- - - - Firm value
  - - - Maximize market estimate of equity into returns for equity stakeholders
- - - - Investment decisions
        
        Mostly equity and no debt
        
        Wont be able to make payment interest
  - - - Borrow money - can make payments
- - - - Riskless Rate + Risk Premium
      - Risk: Standard deviation of returns
        
        Firm Risk (Can be diversified out) vs Market risk (cannot be diversified out
        
        RISK FREE RATE
        
        Entity issuing security has zero default risk
        
        No reinvestment risk:match cashflow time period
      - Marginal investor in firm?