2nd blog

Another factor that the module is about is risk, I havent blogged for a few weeks to try and evaluate the lectures and do some reading. I now know that debt is cheaper than equity because of the risk factor, If you are working internationally you have to be sure of rules and regulations eg: how much tax you pay because it may increase the risk. When looking at ventures you need to ask yourself does it maximise shareholder wealth?, not just does it make a profit. If it maximises shareholder wealth and it gives you a positive MPV you should persue it no matter what the hurdle rate is as long as it is a positive. People will buy a riskier share because of a greater return. The stock market needs huge suppliers and a huge demand. To get the correct price the market has to be close to perfection, if imperfections are large the whole system is brought into question that the shares arent fair.By looking at graphs of reaction and efficiency in lecture,it shows to me that the market isnt fair but not by alot.

my first blog

This is first blog, been doing this module now for two weeks,im a bit concerned about the finance factor because all my class mates are AAT students, Whereas i only have done HND.I hope by the end of the module i fully understand what it is all about. The summary of the module is maximising shareholder wealth which i have grasped the idea of, all the questions accumilate to this answer. In the news yesterday it discussed that banks will try to increase loans to small businesses. I hope this will help new industrys grow and maximise new stakeholders wealth and not just be reliant on the banking industry in this country we need more industrys to help achieve more economics in this country.