The Theory of Corporate Risk Management
“One of the most important developments in finance theory in the last decades is the ability to talk about risk in a quantifiable fashion. If we know how to measure and price financial risk correctly, we can properly value risky assets. This in turn leads to better allocation of resources in the economy. Investors can do a better job of allocating their savings to various types of risky securities, and managers can better allocate the funds provided by shareholders and creditors among scarce capital resources.” (Copeland et al., 2005: 101).
KeywordsRisk Management Cash Flow Stakeholder Theory Financial Distress Capital Asset Price Model
Unable to display preview. Download preview PDF.