Basic theory of enterprise financial management

(1) The capital structure theory is a theory to study the relationship between the company's financing mode and structure and the company's market value. Modigliani and Miller's conclusion in 1958 is 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.

(2) Modern modern portfolio theory and CAPM modern modern portfolio theory are about the best portfolio theory. In 1952, markowitz put forward this theory, and his research conclusion is that as long as the returns between different assets are not perfectly positive, we can reduce the investment risk through asset portfolio. Markowitz thus 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 of a single asset depends on the risk-free return, the risk return of market portfolio and the risk of risky assets. Sharp thus won the 1990 Nobel Prize in Economics.

(3) Option pricing model 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 the 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

(4) Efficient Market Hypothesis (EMH) Efficient Market Hypothesis is a theory that studies the degree to which securities prices reflect the information of the capital market. If the capital market fully reflects all the relevant information of securities prices, 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.

(5) agency 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.

(6) Information asymmetry theory Information asymmetry theory means that people inside and outside the company have different understandings of the actual operating conditions of the company, that is, there is information asymmetry among the relevant personnel of the company, which will lead to different judgments on the company's value.