StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Principles of Finance Paper - Assignment Example

Cite this document
Summary
Principles of Finance Name: Institution: Introduction Certain fundamental principles recur in the conduct of commerce since the beginning of time. Emery, Finnerty & Stowe refer to them as the major principles of finance (Emery, Finnerty and Stowe, 2007). They provide three major categories with four minor subdivisions: competitive financial environment, value and economic efficiency and financial transactions…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.2% of users find it useful
Principles of Finance Paper
Read Text Preview

Extract of sample "Principles of Finance Paper"

Download file to see previous pages

Discussion The first principle discusses the competitive financial environment. This principle outlines four factors that affect the business environment. These are: the principle of self-interest behaviour, the principle of two-sided transactions, the signalling principle and the behavioural principle (Emery, Finnerty and Stowe, 2007). The principle of self-interest means that the company will always look out for its best interests. BP develops new and innovative technologies for oil exploration and drilling.

This technology is used to further the company’s interests. New drilling techniques are not revealed to competing companies. The principle of two-sided transactions means that BP often cooperates with minor companies around the world in the provision of its services. These collaborations are mutually beneficial to both parties. The signalling principle explores the concept of a company’s decisions’ influence on the public. BP’s investment in research on renewable energy creates a positive impression on the public, making them more willing to invest in an environmentally-conscious company.

The behavioural principle means that a company utilises market information to make rewarding investments. BP’s investments have grown to include alternative energy, shipping and treasury services. This is in addition to its wide variety of oil and gas investments. This wide portfolio caters to a wide range of market needs, cementing BP’s position as one of the largest companies in the world. The four principles of value are: The principle of valuable ideas, the principle of comparative advantage, the options principle and the principle of incremental benefits (Emery, Finnerty and Stowe, 2007).

BP’s research and development department produces innovations in solar power, biofuel and wind power. These fresh and new ideas keep the company ahead of its competitors. Following the principle of comparative advantage, BP has established a reputation as a success in its field. This public perception as a financial giant gives them an edge over their competitors. The company also gains incremental benefits when it invests millions in green energy and renewable energy. Though these amounts may seem a waste, the investments pay off in scientific discovery and public approval of the company’s efforts.

BP also ensures it has a variety of business options to invest in, cushioning them against serious losses should one option fail (Benninga, 2008). The principles that emerge from observing financial transactions are: the principle of risk-return trade-off, the principle of diversification, the principle of market capital efficiency and the time-value-of-money principle (Emery, Finnerty and Stowe, 2007). Investing large amounts of money in ventures such as offshore drilling pays off with great dividends.

Energy industries are a high-risk, high-return enterprise. BP also diversifies its investments in multiple securities, ensuring maximum returns. The capital market runs on an efficient system, with up-to –the minute coverage of stock prices. BP is registered on high-profile stock exchanges such as the London Stock Exchange (LSE) and the New York Stock Exchange (NYSE). Updates on stock are relayed internationally

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Principles of Finance Paper Assignment Example | Topics and Well Written Essays - 1000 words”, n.d.)
Principles of Finance Paper Assignment Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/finance-accounting/1447771-principles-of-finance-paper
(Principles of Finance Paper Assignment Example | Topics and Well Written Essays - 1000 Words)
Principles of Finance Paper Assignment Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/finance-accounting/1447771-principles-of-finance-paper.
“Principles of Finance Paper Assignment Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/finance-accounting/1447771-principles-of-finance-paper.
  • Cited: 0 times

CHECK THESE SAMPLES OF Principles of Finance Paper

Comparison of Generally Accepted Accounting Principles and International Financial Reporting Standards

The research paper highlights the major areas of similarities and differences between Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).... The objective of this research paper is to find out those particular differences that are believed to be mostly encountered during practice.... It has been international from the time it was originated. International accounting can be The accounting standards form the principles for the preparation and presentation of financial statements created by the International Accounting Standards Committee (IASC)....
6 Pages (1500 words) Research Paper

The Concept of Islamic Banking

The concept of Islamic banking revolves around the principles of Islamic Law and is put into application through the development of Islamic economics.... Our paper focuses on the concept of Musharaka and the diminishing Musaraka.... The problem associated with the application of diminishing Musharaka is also studied in the current paper.... Interest free finance is one of the basic guiding principles in Islamic banking.... Among all forms of interest–free finance contract, mudaraba was considered the most suitable and practical mode for mobilizing financial resources to Islamic banks....
19 Pages (4750 words) Research Paper

Relationship between Principle and Agents

The main reasons in the conflicts between the principles and the agents are, the principles lack trust in their agents because the information and motives are different of both parties, principles, whether rightly or wrongly, they think that the information that is being passed on by their agents is not accurate, and there is no uniformity of motives between the both parties....
9 Pages (2250 words) Research Paper

The Equator Principles and Their Effects on Project Lending

The principles suggest that the project financing banks should finance companies that conform to the ten principles of equator principles.... The present paper "The Equator Principles and Their Effects on Project Lending" underlines that global sustainability is a very important concept.... Equator principles are voluntary guidelines developed to guide the transactions of project financing banks and their clients1.... The principles discourage project-financing banks from lending money to companies that destroy the environment or harm people....
18 Pages (4500 words) Research Paper

Is Islamic Banking in the United Kingdom Really Islamic

The study demonstrates how the UK public has not fully understood the principles of Islamic banks.... This paper "Is Islamic Banking in the United Kingdom Really Islamic?... nbsp; … The paper has used a survey questionnaire to gather the perceptions of 33 purposively sampled Islamic banking clients.... 0) stated that Islamic banks in operation have failed to devise a mechanism that could finance government debts and consumer loans without interest....
28 Pages (7000 words) Research Paper

Features of Islamic Finance

The author of this research paper examines the characteristics of Islamic finance by highlighting its key features and comparing with conventional finance.... It then makes the detailed study of the impact of Islamic finance on mortgage finance products… Islamic finance can also prove to be a panacea for wider financial issues.... Islamic finance is inherently an equity-based system that can fulfill this need The Holy Quran (2:275) states, “Allah has allowed the sale and has prohibited interest”....
17 Pages (4250 words) Research Paper

The Principles of Islamic Finance: the Primary Source of Global Finance

This paper seeks to analyse the elements of the international financial crisis which has engulfed the world over the past 3 years and ask whether the core principles of Islamic finance have sheltered the Islamic finance industry from the worst of this crisis.... hellip; Examining the core causes of the crisis, how it developed and the key players such as rating agencies and subprime lenders, the paper suggest that elements of Islamic finance have prevented many of the negative repercussions that have swept through the Western financial industry....
20 Pages (5000 words) Research Paper

Effectiveness of Project Finance in Wealthy Countries

The paper “Effectiveness of Project Finance in Wealthy Countries” presents Qatar's ambitious plans to become one of the most advanced states in the world by 2030....  It outlines with its winning the bid to host the 2022 FIFA World Cup.... But the state needs to improve and expand its infrastructure....
21 Pages (5250 words) Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us