Acta Oeconomica Pragensia 2005, 13(4):80-112 | DOI: 10.18267/j.aop.208

Some Remarks On the Impact of Risk Management on Firm Value

Jiří Hnilica
Ing. Jiří Hnilica, Ph.D. - tajemník katedry; Katedra podnikové ekonomiky na Vysoké škole ekonomické v Praze.

The paper focuses on how risk management may influence the value of a company. Situation is discussed with models of Modigliani - Miller - Fama and their assumptions in the background. After the basic explications of the afore mentioned models and of the decision-making rule for investments, particular states where risk management may add value are analyzed. An attention is paid mainly to costs of taxation and financial distress, underinvestment and asset substitution.

Keywords: risk management, hedging, firm value
JEL classification: G30

Published: December 1, 2005  Show citation

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Hnilica, J. (2005). Some Remarks On the Impact of Risk Management on Firm Value. Acta Oeconomica Pragensia, 13(4), 80-112. doi: 10.18267/j.aop.208
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