Will the cost of equity be zero
Will the cost of equity be zero if dividends paid to common stockholders will not be legal obligations of a corporation?
Expert
Even though common stockholders don’t have a contractual claim on dividends but the funds supplied by stockholders definitely have a cost. Equity investors are mostly paid last and thus they are under the greatest risk among all the capital suppliers. If a company is not earning a higher return rate on equity funds to pay off for the higher risk taken by equity investors, price of the stock is going to fall and consequently the value of the firm.
What is shadow Greeks?
Explain distribution of individual numbers or random numbers.
What is Volatility? Answer: It is annualized standard returns’ deviation.
Explain in brief capital rationing? What are reasons that a firm should practice capital rationing?
What is implied volatility? Answer: Implied volatility is number into the Black–Scholes formula which makes a theoretical price equal a market price.
Where are Monte Carlo simulations used?
How is hedging optimized when transaction costs are there?
What is stable Levy Distribution?
Why is Value at Risk important? Specified with reasons?
Illustrates an example of LIBOR Market Model?
18,76,764
1939152 Asked
3,689
Active Tutors
1436451
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!