Financial management (finance

Management) is the lifeblood of an enterprise, which is about the management of asset purchase (investment), fund financing (financing), cash flow (working capital) and profit distribution under a certain overall goal. Corporate finance is usually translated as "corporate finance" or "enterprise financial management" in China. Financial management is an integral part of enterprise management. It is an economic management work to organize enterprise financial activities and handle financial relations according to financial laws and regulations and financial management principles.

The theory of capital structure is a theory to study the relationship between corporate financing mode and structure and corporate market value. From 65438 to 0958, modigliani and Miller concluded that in a perfect and effective financial market, enterprise value has nothing to do with capital structure and dividend policy-MM theory. Miller won the 1990 Nobel Prize in Economics for MM theory, and Modleya won the 1985 Nobel Prize in Economics.

Modern modern portfolio theory and CAPM modern modern portfolio theory are theories about the best portfolio. 1952 markowitz (Harry

Markowitz) put forward this theory, and his research conclusion is that as long as the returns between different assets do not change the perfect positive correlation, the investment risk can be reduced through asset portfolio, for which Markowitz won the 1990 Nobel Prize in Economics. Capital asset pricing model is a theory to study the relationship between risk and return. Sharp and others come to the conclusion that the risk return rate of a single asset depends on the risk-free return rate, the risk return rate of market portfolio and the risk of risky assets. Sharp won the 1990 Nobel Prize in Economics.

Option pricing theory is a theory about determining the value or theoretical price of options (stock options, foreign exchange options, stock index options, convertible bonds, convertible preferred stocks, warrants, etc.). ). Scholes put forward an option pricing model in 1973, also known as B-S model. Since 1990s, option trading has become the main theme in the world financial field. Scholes and Morton won the 1997 Nobel Prize in Economics.

Efficient market hypothesis is a theory to study the degree of information reflected by securities prices in the capital market. If the capital market fully reflects all relevant information in the securities price, it is said that the capital market is effective. In this market, it is impossible to get economic benefits from securities trading. Fama is the main contributor to this theory.

Agency theory is to study the agency cost under different financing methods and different capital structures, and how to reduce the agency cost and improve the company value. The main contributors to this theory are Zhan Sen and McCullough. Asymmetric information theory (asymmetric

Information) refers to the different understanding of the actual operating conditions of the company by the internal and external personnel of the company, that is, the information asymmetry between the relevant personnel of the company will lead to different judgments on the company's value.