Corporate Finance: Instructor\'s Manual Applied Corporate Finance

(Amelia) #1
Aswath Damodaran 76

Analyzing the investor bases...


Disney Deutsche Bank Aracruz (non-voting)
Mutual Funds 31 % 16 % 29 %
Other
Institutional
Investors

42 % 58 % 26 %

Individuals 27 % 26 % 45 %

These companies are predominantly held by institutions who also do much of


the trading on the stock. Insiders hold almost no stock in the company.... The


marginal investor is an institutional investor.... Aracruz has the highest


percentage of individual investors and it also has voting shares held by insiders.


We would be most cautious in extending the marginal investor is diversified


argument to Aracruz.

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