everything there is to know about finance in 8 easy slides!

1. 8 Pillars of Finance

2. I. The Past does NOT matter
Only the Future has Meaning.
Ignore book value…

3. II. Money has time value
Discount future money using a
discount/interest rate

4. III. Return is proportional to risk
Capital Asset Pricing Model

5. IV. It doesn’t matter how you slice the
cake…
Capital Structure, Dividend Policy don’t matter

6. V. There is no point in doing what
investors can do themselves..
Corporate diversification has no value to the
market

7. VI. You can’t make money on what
everybody knows..
Markets are efficient

8. VII. Insiders know more than outsiders
Dividend policy, capital
structure as signals

9. If you thought…
In your backyard

10. Raise funds by..
– Internal funds
– Rights issue
– Debt issue
– New equity as a last resort!
– What will be the result of a new issue of equity ?

11. PILLAR 8

12. NOBODY KNOWS ANYTHING..
‘EXPERTS’ LEAST OF ALL!