## A Decision Theoretic Approach to Optimal Investment Decisions and an Optimal Financial Structure Under Risk |

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### Contents

Decisions in risk situations | 12 |

Decisions under uncertainty | 35 |

Bibliography | 38 |

25 other sections not shown

### Common terms and phrases

alternative amount analysis annual assets assumed assumption average borrowing rate capital budget capitalisation cash-flow cash-outflows certainty equivalent chapter company's constant corporate cost of borrowing cost of capital cost of equity criteria debt capacity decision criterion decision maker decision problem decrease defined depends determined dividend economic enterprise equation equivalent investment estimated expected monetary value expected return expected utility expected value factors Figure financial risk forecast function future growth rate Harvard Business Review ibid income increase investment project investment proposals investor lease leverage limits Lintner Management Science marginal rate measure NCFD Net operating income net present value operating optimum P/E ratio particular payments period possible outcomes present value probability distribution profit project selection rate of return recession reinvestment relevant required rate result retention rate risk cost risk restraints shareholders simulation situation Solomon standard deviation TABLE Theory uncertainty variability variance wealth maximisation