This paper looks into the area of macroeconomics and discusses that the financial environment is one of the key drivers in firm value.
Written in 2009; 2,241 words; 5 sources; APA; $ 69.95
Paper Summary:
In this article, the writer first outlines some of the major macroeconomic factors in the financial environment and lends perspective on how those impact a firm's value in both the long and short term. The writer then discusses the factors in the financial environment that have a more specific and direct impact on firm value. This is followed by an interpretation of the literature, illustrating how the ways in which a firm reacts to these factors impacts its value in both the short and long term. The writer then reaches some conclusions about the subject and looks at what attention to the financial environment means to a firm in terms of its value.
Outline:
Introduction
The Financial Environment
Discussion
Conclusion
Works Cited
From the Paper:
"One of the most basic ways to derive firm value is with the dividend discount model. From this model, the net present value of future cash flows is derived, with the future cash flows defined as the dividends, typically incorporating a dividend growth factor. The discount rate is directly affected by the prevailing interest rates, and represents the opportunity cost of capital. For the investor, the firm's value is therefore subject to changes in the interest rates. Interest rates are a lagging indicator of the financial environment, confirming environmental trends rather than preceding them.
"Shifts in rates affect different firms in different ways. Aside from the dividend discount, the values of a firm's assets and liabilities are also subject to shifts in interest rates. A rise in interest rates reduces the value of interest-paying assets; the decrease in rates increases the value of those assets."
We have thousands of high-quality term papers, research papers, essays, book reports and dissertations on every topic. At AcaDemon, you can download those term papers to help you write yours! You can be sure that the term paper, essay, book report or research paper you download are top-quality, competitively priced and high-level work.
This Free Term Paper Abstract is a part of our Term Paper Library.Here you can purchase research papers, examples of essays, academic dissertations, articles, notes, analytical papers, book reports, stories and poems. We have thousands of persuasive, point-of-view, narrative, critical, compare and contrast and other types of essays in our Library. You can also find here Term papers on "Financial Environment and Firm Value", Essays on "Financial Environment and Firm Value", Research papers on "Financial Environment and Firm Value", Student papers on "Financial Environment and Firm Value", Book reports on "Financial Environment and Firm Value", Dissertation on "Financial Environment and Firm Value", Thesis on "Financial Environment and Firm Value", Summary of paper on "Financial Environment and Firm Value", Articles written on "Financial Environment and Firm Value".
Look for more research papers, essays and book reports on