Corporate Finance- M3 Discussion- Making Financial Decisions.docx

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What are the linkages among financial decisions, return, risk and stock value? Why are these linkages important? How does the financial manager incorporate these as s/he manages the assets and liabilities of the firm? Be sure to include examples to provide specificity for your answers. Companies depend on the best financial decisions to have the best outcomes that benefit the company. According to the text, financial managers use their financial statements to develop additional data and make their decisions based on their evaluation of the associate returns and risks. A return could be the total gain or a loss from an investment over a certain period. Risks are referred to the uncertainty surrounding an investments return, which could lead to be undesirable. Using these different concepts is important to a company when trying to increase their stock value. By making financial decisions when incorporating the risks and returns will have an affect on stock value, linking all of them together.

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