In a world of geo-political, social and economic uncertainty, strategic financial management is in a process of change. However, modern finance theory reduces future uncertainty to quantifiable risk so that savvy analysts and financial managers can estimate an investment’s prospective yield using classical probability theory. Part 1 of the Strategic Financial Management e-book looked at the normative objective of strategic management preferred by analysts in the twentieth century, as well as the material investment decision. Part 2 expands on this discussion to examine the impact of the finance decisions on investment decisions for all-equity firms, and models an alternative to Net Present Value (NPV), or wealth maximisation concept, through the application of the “value added” concept. Both part 1 and part 2 of this comprehensive text are available to download for free on bookboon.com
Strategic Financial Management: Part 2 begins with a discussion of the Finance Decision, examining equity valuation, the capitalistion concept, dividend valuation, dividend yield, equity cost, growth estimates, capital leverage, issue costs, and the Weighted Average Cost of Capital (WACC). It continues its analysis by introducing the concepts of Economic Value Added (EVA) and Market Value Added (MVA), and NPV maximisation.
All explanations in the text are accompanied by example equations and practice activities to ensure comprehension. The equations have been simplified wherever possible for ready understanding. Selected references are also included at the end of the text for further reading.
Download Strategic Financial Management Parts 1 and 2 for free on bookboon.com