BUSF_A01.qxd

Chapter 9 • The secondary capital market and its efficiency likely than not to rise again tomorrow: in other words, there are pr ...

Tests of capital market efficiency Each of the dots on the graphs is one day’s price movement for a particular security, plotted ...

Chapter 9 • The secondary capital market and its efficiency by the price increasing by a small but significant amount. It seems ...

Tests of capital market efficiency Bonus share issues Capitalisation or bonus share issues involve little more than a bookkeepin ...

Chapter 9 • The secondary capital market and its efficiency More recently, Busse and Green (2002) found that good news is typica ...

Conclusions and implications would be the outcome of an investment strategy based on selecting securities at random. For example ...

Chapter 9 • The secondary capital market and its efficiency Implications for investors Capital market efficiency implies that in ...

Conclusions and implications winner emerges. We know that a winner must emerge, but would we really believe that skill was invol ...

Chapter 9 • The secondary capital market and its efficiency managers’ actions. In other words, if managers act in a way that pro ...

Further reading l The current price of any security represents a consensus view of the security’s current worth – its price is t ...

Chapter 9 • The secondary capital market and its efficiency 9.1 What are the two roles of members of the LSE in respect of their ...

Problems There are sets of multiple-choice questionsand missing-word questions available on the website. These specifically cove ...

‘ 10.1 Introduction In Chapter 8 we took a brief look at typical sources of long-term finance of UK busi- nesses. Now we shall s ...

Cost of individual capital elements 10.2 Cost of individual capital elements An economic asset (which loan stocks, equities, and ...

discount rate 10 Cost of capital estimations and the Some readers may be puzzled as to why, when the original amount borrowed wa ...

Cost of individual capital elements from the capital market having changed its perceptions of the risk of default (by the busine ...

Chapter 10 • Cost of capital estimations and the discount rate The value of the lease at the date of its being taken out is the ...

Cost of individual capital elements Whenever the current market price of a share, pE 0 , is used in any equation relating to div ...

Chapter 10 • Cost of capital estimations and the discount rate If the first of these is adopted, a similar approach is taken to ...

Cost of individual capital elements If a fixed proportion (b) of funds generated by trading each year is retained (as opposed to ...