In Project Risk Management, Risk Response may include actions to?

the right choice

E. All of the other alternatives apply

 

 

which process has the greatest ability to direct influence the project schedule??

Risk of a company is related to its stock , Interest coverage and Debt service coverage ratio practically otherwise there are market risk, politcal risk Geo political risk, industry risk etc which are exteral factors to a firm and non diversifiable and uncontollable. 1. Risk of a stock is denoted by beta. It is the volatility of return of stock in accordance with market return. Market beta is considered1 and stock beta is compared to market beta for calculating volatility in returns of stock. For example if a company stock beta is1.2 it means that the stock is% more volatile or riskier than market return. A stock of beta0. means it is% less riskier than market return. 2. Risk is aaociated with interest coverage of a firm for example interest coverage ratio EBIT/interest gives information about the company whether it is generating enough core operating income to cover its fixed interest for bank otherwise may become a potential defaulter in short term. Debt service coverage ratio gives information about the company whether it is generating enough net income to cover its interest as well as principal payment. It is the long term liquidity position of the company. 3. Risk of a firm can also be evaluated from FCFF( free cash flow available to the firm). Higher the FCFF lower the risk associated and vice versa. Hence while evaluating risk we basically consider short term and long term iquidity position of the company. Ratio analysis is a popuar tool for risk evaluation. How does minimise risk? Companies minimise risk by following the ways as described. 1. Making intercorporate investments and taking position Minority active, Passive , proportionate and controlling. 2. Linking performance of employees to stock performance through SBC. 3. Through forward and backward integration 4. Investing in T Bills, Sovereign bonds, Debentures for assured returns. 5. In project financing companies evaluate risk by calculating NPV, IRR and Payback period of the project. Tool used : A financial model is prepared based on assumptions and based on forecasted company financials risk is evaluated using valuation techniques

Answer: E ---------------------------------------