Discuss the possible factors underlying differences in price for the same stock on two different markets, such as the spread between the London and New York prices for a share of Shell’s common equity stock.
Answer to relevant QuestionsWhy is it much more risky to take a short position in a stock than a long position? What does that mean for the likelihood of over- versus undervaluation of a company’s share price? Would a company’s share price benefit from having fewer traders and more fundamental investors among the company’s shareholders? Explain why the value of a business may differ under different owners. Compare and contrast the value driver approach to performance measurement with the balanced scorecard approach. Describe the circumstances under which the acquirer is better off paying in stock rather than cash. What are the implications for the acquirers’ shareholders of paying in stock?
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