Corporate Risk Management
Donald H. Chew
Columbia University Press, Aug 14, 2012 - Business & Economics - 480 pages
More than 30 leading scholars and finance practitioners discuss the theory and practice of using enterprise-risk management (ERM) to increase corporate values. ERM is the corporate-wide effort to manage the right-hand side of the balance sheet—a firm's total liability structure-in ways that enable management to make the most of the firm's assets. While typically working to stabilize cash flows, the primary aim of a well-designed risk management program is not to smooth corporate earnings, but to limit the possibility that surprise outcomes can threaten a company's ability to fund its major investments and carry out its strategic plan. Contributors summarize the development and use of risk management products and their practical applications. Case studies involve Merck, British Petroleum, the American airline industry, and United Grain Growers, and the conclusion addresses a variety of topics that include the pricing and use of certain derivative securities, hybrid debt, and catastrophe bonds.
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accounting airlines allocation analysis Applied Corporate Finance balance sheet banks capital structure cash flow changes Chief Risk Officer commodity price company’s comparative advantage contracts Corporate Finance Vol corporate risk management correlation cost of capital credit risk Culp currency customers debt decisions derivatives dollar earnings economic effect enterprise risk management estimate evaluate example exchange rate expected financial distress financial risks finite risk firm value firm’s firm’s risk foreign exchange fuel fuel hedging fund futures futures contracts hedging Hydro impact increase industry interest rate risk investment investors liabilities losses major manage risk million moral hazard operational risk options pension assets portfolio position potential premium price risk profits purchase put option reduce reinsurance risk capital risk exposures risk management program risk measurement risk transfer shareholders shortfall significant strategy swaps total risk trading transactions value at risk volatility