Question: Stock prices are much too volatile for financial markets to
Stock prices are much too volatile for financial markets to be efficient. Comment.
Answer to relevant QuestionsMaximizing stock prices does not make sense because investors focus on short-term results and not on the long-term consequences. Comment. Reader's Digest has voting and nonvoting shares. About 70% of the voting shares are held by charitable institutions, which are headed by the CEO of Reader's Digest. Assume that you are a large holder of the nonvoting shares. ...The following equation is reproduced from the study by Fama and French of returns between 1963 and 1990. Rt = 0.0177 − 0.11 ln (MV) + 0.35 ln (BV∕MV) where MV is the market value of equity in hundreds of millions of ...A prominent beta estimation service reports the beta of Comcast Corporation, a major cable TV operator, to be 1.45. The service claims to use weekly returns on the stock over the prior five years and the NYSE composite as ...Boise Cascade also had debt outstanding of $1.7 billion and a market value of equity of $1.5 billion; the corporate marginal tax rate was 36%. a. Assuming that the current beta of 0.95 for the stock is a reasonable one, ...
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