Interest rate and discount rate are two financial terms that are often used interchangeably, leading to confusion among individuals when it comes to making financial decisions. While both rates play…
In finance and our previous post, we often talk about risk management, when it is understood that we are talking about financial risk management. Risk managers are found in a…
Before we can begin to describe what is financial risk managers do, we need to understand what financial risk is. In finance, the risk arises from uncertainty surrounding future profits…
Financial risk is often divided into four principal types of risk: market risk, credit risk, liquidity risk, and operational risk. To varying degrees, most financial transactions involve aspects of all…
The traditional financing is related to the liability side of the balance sheet. The firm issues long-term debt or equity to meet its financing needs. and in the process, expands…
The dividend policy decision involves the choice between distributing the profits belonging to the shareholders and profits retention by the firm. A dividend means, the portion of company net income…
Agency problems are a common source of frustration and confusion in business. It is essential to understand the different types of agency problems and the solutions available to help you…
The nature of financial decisions varies from one firm to the other. It may also be different from the same firm over a period of time. The reason is that…