Many companies with equal risk; which will have the highest stock prices?

Related BrainMass Solutions

• Managerial Finance : Equal Risk and Stock Price

  15930 Managerial Finance : Equal Risk and Stock Price Assume you are looking at many companies with equal risk. Which ones have the highest stock prices?

• FINANCE calculations: NPV, ROE, MRP, CAPM, WACC, IRR, Beta and others

  Over the past 75 years, we have observed that investments with the highest average annual returns also tend to have the highest standard deviations of their annual returns.

• Stock Options and Internal Controls

  Many large companies have actually done away with stock options and instead compensate management in the form of annual bonuses (not tied to net income), or by some other means.

• Multiple Choice Questions

  d) All else equal, bonds with larger coupons have greater interest rate (price) risk than do bonds with smaller coupons.

• Market Efficiency

  As long as prices adjust instantly, new investors in these companies are still getting stocks with the same risk relative to return as prior investors believed that they were getting.

• capital budgeting technique

  The interest Rate Risk theory tells us that, all other things being equal, the longer the time to maturity, the greater the interest rate risk.

• Personal Finance Investing Bonds

  The highest rating an organization has the most stable the organization is financially. The Treasury bond gets the highest ratings and junk bonds have the lowest ratings (www.fool.com).

• Financial Market- Capital Asset Pricing Model

  -The CGM works okay with matured companies (companies that have been in business for many years and pay dividends regularly).

• abandonment option

  All else equal, bonds with larger coupons have greater interest rate (price) risk than do bonds with smaller coupons. If a bond is selling at a premium, its current yield will be greater than its yield to maturity.