【正文】 tation, legal costs and so forth. The expected cost of financial distress is E (F) =F * Pr ob{X l}. In our subsequent worked example, we show that calculation of E (F) is straightforward.The cost of capital k reflects market (not total) risk. The project’s present value equals the present value of expected cashflows minus the present value of financial distress costs: V0=μ1/ (1+k) –E (F)/ (1+k) (4)Note that this is analogous to the RPV formulation (3). Like the RPV model, our valuation formula takes account of the valueatrisk. However, we explicitly model this as financial distress, and we introduce it in the cashflow, rather than the discount rate.The NPV formula is: NPV=l+ (μ1E (F))/ (1+k) (5)The firm takes the project if NPV ≥ 0, since this will be valueincreasing.Like the RPV model, we can incorporate private valuations through the E (F) term. Let F represent the costs of financial distress to welldiversified investors, and let Fm represent the costs of financial distress to the firm’s management. Due to the arguments relating to welldiversified investors versus nondiversified managers set out previously, we would expect Fm F. Management may be tempted to incorporate the expected value E (Fm) into the NPV formula such that: NPVm=l*(μ1E (F))/ (1+k) NPV (6)If NPVm 0 NPV, selfinterested management may reject a valueincreasing project. We do not pursue this avenue in this paper. Instead, we assume that managers act in the interests of shareholders.“Sufficiently to eliminate financial distress”Riskmanagement and its effect on firm valueAssume that management can spend an amount C on riskmanagement activities. Furthermore, assume that this activity reduces total risk sufficiently to eliminate financial distress. If the management takes the project and carries out riskmanagement activities, the NPV will be: NPV=lC+μ1/ (1+k), (7) where the subscript rm signifies NPV after riskmanagement. If the management takes the project and does not carry out risk management activities, NPV is given by (5).Note that NPVrm NPV if E (F)/ (1 + k) C. This means that risk management activities are worthwhile if the elimination of the present value of financial distress costs exceeds the expenditure required on risk management activities.The project acceptance and risk management decision rules are as follows:Take the project, and risk manage if NPVrm0, and NPVrmNPV. Riskmanagement activities are valueadding, and the project has a positive NPV after such activities. Take the project, but do not riskmanage, if NPV0, and NPVNPV. Riskmanagement activities are valuereducing, but the project has a positive NPV without them.Reject the project if 0 NPVrm NPV, or 0 NPV NPVrm. In this case, we reject the project, whether riskmanagement activities are valueadding or valuereducing. Conclusion: Financial riskmanagement activities can reduce total risk. This may be valueadding if it reduces the cost of financial distress. If investors are welldiversified, and if CAPM is robust, then the reduction of total risk should not affect the cost of capital. Therefore, following Shapiro and Titman (1998), we have analysed the effects of riskmanagement on firm value through the cashflows, rather than through the discount rate. We develop a method of investment appraisal that takes account of total risk through expected financial distress costs. Such a method can result in three possible decisions relating to a new project:(1) Refuse to this project。 (3) Investment projects but no risk management.Source: Richard Fairchild,2002. “Financial risk management: is it a valueadding activity”.Balance Sheet,. 譯文：財(cái)務(wù)風(fēng)險(xiǎn)管理：這是一個(gè)增值活動(dòng)？財(cái)務(wù)管理風(fēng)險(xiǎn)是應(yīng)對(duì)財(cái)務(wù)市場(chǎng)導(dǎo)致的不確定性的過程。積極應(yīng)對(duì)財(cái)務(wù)風(fēng)險(xiǎn)能提高企業(yè)的競(jìng)爭(zhēng)力，確保管理層、業(yè)務(wù)人、利益相關(guān)者和董事會(huì)在有關(guān)風(fēng)險(xiǎn)的重大問題上達(dá)成一致。盡管風(fēng)險(xiǎn)管理可以降低總的風(fēng)險(xiǎn)，但這可能不會(huì)影響資本或公司價(jià)值的成本，投資者們已經(jīng)主張消除所有的特定風(fēng)險(xiǎn)和風(fēng)險(xiǎn)管理，這可以被看作是一個(gè)凈現(xiàn)值為零時(shí)的最好活動(dòng)，Welldiversified investors have already eliminated all of the specific risk, and riskmanagement may be seen as a zero NPV activity at best, and at worst, a valuereducing 。Welldiversified investors have already eliminated all of the specific risk, and riskmanagement may be seen as a zero NPV activity at best, and at worst, a valuereducing ,在最壞的情況，However, there is a role for risk ，風(fēng)險(xiǎn)管理有這樣一個(gè)作用，即 Reduction of total risk may reduce the expected costs of financial distress, hence increasing expected ，This increases firm 。這種方法在一個(gè)新項(xiàng)目中可能會(huì)導(dǎo)致三種決定：拒絕在該項(xiàng)目中投資；風(fēng)險(xiǎn)管理；或投資該項(xiàng)目，但沒有風(fēng)險(xiǎn)管理。具有代表性的金融工具比如說股票、債券、期貨和期權(quán)等，以獲取所需的財(cái)務(wù)分析（見史密斯和史密森的一個(gè)精辟的分析）。A firm39。 m