Principles of Corporate Finance Brealey and Myers Sixth Edition Conclusion: What We Do and Do Not Know about Finance Slides by Matthew Will Irwin/McGraw Hill Chapter 35 ©The McGraw-Hill Companies, Inc., 200 35- Topics Covered What We Do Know What We Do Not Know Irwin/McGraw Hill ©The McGraw-Hill Companies, Inc., 200 35- Most Important Ideas in Finance Net Present Value Capital Asset Pricing Model (CAPM) Efficient Capital Markets Value Additivity & Law Conservation of Value Capital Structure Theory Option Theory Agency Theory Irwin/McGraw Hill ©The McGraw-Hill Companies, Inc., 200 35- 10 Unsolved Problems In Finance How major decisions are made? What determines project risk and PV ? Risk and return - What have we missed? How important are the exceptions to the Efficient Market Theory? Is management an off-balance-sheet liability? Irwin/McGraw Hill ©The McGraw-Hill Companies, Inc., 200 35- 10 Unsolved Problems In Finance How can we explain the success of new markets and new securities? How can we resolve the dividend controversy? What risks should a firm take? What is the value of liquidity? Irwin/McGraw Hill ©The McGraw-Hill Companies, Inc., 200 ... Is management an off-balance-sheet liability? Irwin/McGraw Hill ©The McGraw-Hill Companies, Inc., 200 35- 10 Unsolved Problems In Finance How can we explain the success of new markets and... & Law Conservation of Value Capital Structure Theory Option Theory Agency Theory Irwin/McGraw Hill ©The McGraw-Hill Companies, Inc., 200 35- 10 Unsolved Problems In Finance How major.. .35- Topics Covered What We Do Know What We Do Not Know Irwin/McGraw Hill ©The McGraw-Hill Companies, Inc., 200 35- Most Important Ideas in Finance Net Present Value