llustrate illiquidity risk and small cap premium
My investment bank told me that beta given by Bloomberg incorporates the illiquidity risk and small cap premium since Bloomberg does well-known Bloomberg adjustment formula. Is it true?
Expert
No. The well-known “Bloomberg adjustment formula” is an arbitrary adjustment within order to converge computed betas to 1 and contains multiplying the calculated beta with 0.67 and adding 0.33 to this. Adj. Beta = 0.67 x raw beta + 0.33. This is significant to point out that such adjustment is fully arbitrary.
When valuing the shares of my company, I calculate the present value of the expected cash flows to shareholders moreover I add to the result obtained cash holdings and liquid investment. Is that correct?
Is the net income of a year money the company made that given year or is this a number whose importance is quite doubtful?
Effective Utilization of Funds: It is just the decision to maximize the return on investment of funds. When finance manager is not capable to raise the return by investing fund in profitable assets or other profitable projects, company’s busines
Liquidity Ratios: Such ratios comprise the Current Ratio and the Quick Ratio or the acid test ratio. Liquidity ratios demonstrate the Liquid position of a company in the short term that is the capability of a firm to pay its obligations in short term.
Sometimes, companies accuse investors of performing credit sales which they make their quotations fall. Is it true?
Our company (A) is going to buy the other company (B). We need to value the shares of B and, thus, we will use three options of the structure Debt/Shareholders’ Equity in order to obtain the WACC as: 1) Present structure of A
Describe the term Zero Coupon Bonds in Corporate Bonds?
Suppose that the two securities APPL and MSFT account for the entire large cap technology component of the S&P 500 (hypothetically – of course – there are really plenty of others). Further, suppose that their weights in the S&P index were as follow
Why classical option pricing with constant volatility required?
How can any industrial company inflate the value of its inventory so as to decrease net income and the taxes is has to pay in a year?
18,76,764
1939979 Asked
3,689
Active Tutors
1437707
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!