MARKET PRICES, VALUATION PRINCIPLE, NET PRESENT VALUE, INTEREST RATES AND BONDS

Market Prices, Valuation Principle, Net Present Value, Interest Rates and Bonds

Market Prices, Valuation Principle, Net Present Value, Interest Rates and Bonds

Explain why market prices are useful to a financial manager?

A competitive market is one which a good can be bought and sold at the same price. We can use prices from competitive markets to determine the cash value of a good. Whenever a good trades in a competitive market, the price determines the value of the good. Financial Managers must be able to evaluate costs and benefits in order to make ...