Based on your answer to this question, do you think equity investors will require higher or lower returns for their investments than debt investors, all other matters being equal?

There has been an increased risk of bankruptcy due to the coronavirus because of the increased lockdown and lack of profitability for more companies and there has been a significant risk associated with the lack of liquidity and lack of credit availability in the system because of lack of creditworthiness on the part of various companies, so it has improved the chance of bankruptcy for various companies who are small scale and they are having lower competitive edge, so the risk of bankruptcy is increased for the equity investors and it is also influencing the stock market performance during the coronavirus pandemic.

There has been increased risk premium which will be demanded by the equity investors because of the increased risk of bankruptcies of various companies and they will be trying to demand higher compensation for the risk which has been undertaken for investment into this companies and hence the stock market need to provide with a higher return to these investors in order to compensate for risk which is being undertaken.

Hence,it could be said that there has been an increased chance of bankruptcy for various companies due to which investors are demanding increased risk premium due to which the expected return on stocks are increasing and the expected stock market performance are also increased for compensation of additional equity risk premium.