About the Book
"Financial managers or financial analysts spend a good portion of their time planning, setting objectives, and developing efficient courses of action to achieve their objectives. As a financial manager, you may have to deal with a wide variety of plans, including production plans, financial plans, and personnel plans. Each of these is different, and all require some kind of financial knowledge. In the past twenty years the quantity of new and exciting research in finance has been large, and a sizable body of basic material now lies at the core of the area of study. Risk analysis is a process of measuring and analyzing the risk associated with the financial and investment decisions. It is important to consider risk in making capital investment decisions because of the large amount of capital involved and the long-term nature of the investments. Analysts must also consider the rate of return in relation to the degree of risk involved. Today‘s dollars are not the same as tomorrow‘s. A dollar now is worth more than a dollar to be received later, because you can invest that dollar for a return and have more than a dollar at the specified later date. Further, receiving a dollar in the future has uncertainty attached to it; inflation might make the dollar received at a later time worth less in buying power. Time value of money is a critical consideration in financial and investment decisions. Such as, compound interest calculations can help you determine your eventual return from an investment. Discounting, or the calculation of present value, which is inversely related to compounding, is used to evaluate future cash flow associated with long-term projects; the discounted value of receiving future cash flows from a proposal is an important consideration.
Two –Volume “Brig’s Handbook of Methods & Research in Financial Decision Analysis” aims to provide you with the knowledge and skills necessary to evaluate the impact of financial decisions on different constituencies of stakeholder. It will also enable you to participate in decision making and processes concerning the maximization of value in investment, finance and risk management, and the delivery of value for money in achieving the objectives of organizations.
The financial system is the part of the economy that connects the demanders and suppliers of funds. When this is done directly through financial markets, such as when a company wanting to raise funds sells a bond to a household wanting to make an investment, it is called direct finance. However, not all demanders of funds use direct finance. Sometimes financing is done indirectly as when a company borrows money from a bank that gets its money from household deposits. Fundamentally, the same thing is happening, money goes from the household to the firm. The difference is that a third party is always in the middle of the relationship. Institutions that do this, such as banks, are called financial intermediaries, because they are “between” the borrowers and lenders. When companies raise funds through financial intermediaries it is called indirect finance.
This Two-Volume “Brig’s Handbook of Methods & Research in Financial Decision Analysis” aims to analyze the multiple aspects of financial decisions and discusses their main features. It examines how the mix of financial contracts a firm uses to raise funds and to manage risk affect shareholder wealth. The contributions of financial modeling and financial engineering are also discussed from the perspective of risk management, which has been a core issue in the recent developments in the field. It elaborates on the multidimensional aspects of financial decisions considering different perspectives. This Handbook is of immense valuable for students, professionals, and various doctoral-level courses in financial theory."