Consider a stock with average daily volume (Qt) 4,200 shares with 1,500,000 (Nt) total number of outstanding

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Consider a stock with average daily volume (Qt) 4,200 shares with 1,500,000 (Nt) total number of outstanding floating shares. The share current market price is $53.76. Assume, one of your clients hold 15,000 of these shares. To minimize trading impacts, the client's liquidation policy is set to 20% of the average daily market volume of the share.

Required:

a.Calculate market capitalisation, daily and annualized Turnover ratio and Client's liquidation ratio.

b. Briefly explain steps needed to be followed in liquidity risk management.

Related Book For answer-question

Foundations Of Financial Management

ISBN: 9781259265921

11th Canadian Edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

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Posted Date: Jul 22, 2023 03:38 AM

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Consider a stock with average daily volume (Qt) 4,200 shares with 1,500,000 (Nt) total number of outstanding

Question:

Expert Answer:

a Lets calculate the requested values step by step 1 Market Capitalization MC Market Capitalization is calculated by multiplying the current market price per share with the total number of outstanding ... View the full answer

Foundations Of Financial Management

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