Important factors for expectation theory, Finance Basics

Important Factors for Expectation Theory

The following circumstances are essential for the expectation theory to hold.

i) Ideal capital markets exists where there are many sellers and buyers of security along with none having a important influence on the interest rates.

ii) Investors have homogeneous expectations for future interest rates and returns upon all investments.

iii) Investors are rational wealth maximizes

iv) Bankruptcy of firms because of use of borrowing is unlikely.

 

Posted Date: 1/30/2013 2:59:44 AM | Location : United States







Related Discussions:- Important factors for expectation theory, Assignment Help, Ask Question on Important factors for expectation theory, Get Answer, Expert's Help, Important factors for expectation theory Discussions

Write discussion on Important factors for expectation theory
Your posts are moderated
Related Questions
what are the qualitative factors to be considered when deciding on product mix

Elephant Company common stock has a beta of 1.2. The risk-free rate is 6% and the expected market rate of return is 12%. Determine the required rate of return on the security.

For any company that is quoted on the London Stock Market, you are required to write a report to existing shareholders on any TWO of the following issues. Each answer carries equal

Overlaps and Conflicts Overlaps - whenever attaining ONE MEANS achieving the another Conflicts - whenever attaining ONE CANNOT permit the achievement of another.

i ordered case study 1 susam and malcom. when i open the document is completely different, not the same case study an is only relivent in the usa not australia... do you have the c

Plastic Money or Credit Card Finance This is finance of a kind whereby a company will make arrangements for the use of the services of credit card organizations via the purcha


Debtors Collection Period - Formula Fomula is given below: Debtors collection period = 365/ Debtors turnover Or (365 x Average debtors)/ Annual credit sales This

Profitability Index or P.I. P.I. (benefit-cost ratio) = Present value of inflows / Present value of cash outlay Whether P.I. is greater than 1.0, invest and whereas less th

Pick a product of your choice and identify the stages of production