APPLIED ASPECTS AND EFFECTS OF BEHAVIORAL FINANCE

Abstract

Purpose: Article is devoted to the application of the effects of behavioral Finance in portfolio theory, valuation of assets and businesses, determining the capital structure. Discussion: Under assumption that the existing financial theories and valuation models in the value of assets don’t explain the behavior of investors fully, market forecasts is weakly realistic, it is necessary to find an explanation for the status quo. In the financial area actors only partly rational, they make decisions un-der influence of prevailing prejudices, stereotypes, emotions and mistakes. Re-sults: In the analysis of information is proposed to apply the discoveries of behav-ioral finance, taking into account the effects of behavior on decisions. The assump-tion of a partial rationality of the economic entity and accounting for behavioral aspects in traditional models brings the predictions to reality.