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Risk

  • Jamie Rogers
Chapter
Part of the Global Financial Markets book series (GFM)

Abstract

Corporate management will typically develop strategies and allocate resources to increase shareholder value. Shareholders, on the other hand, will focus on the cash growth of their investments. As to whether there is value in any potential cash flow growth will depend on the risks associated with these investments. Investors will generally demand a higher rate of return from investments that are perceived to be relatively riskier. The risks associated with corporate investments are found in variables such as prices, quantities, costs, competition, market share and project lifecycles. These variables can be unpredictable and result in cash flow volatility, which will therefore have an impact on any net present value (NPV) calculations.

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Jamie Rogers
    • 1
  1. 1.New YorkUSA

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