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    Stockholders Indifference with Volatile Cash Flows

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    1. Give two reasons stockholders might be indifferent between owning the stock of a firm with volatile cash flows and that of a firm with stable cash flows.

    2. Discuss some of the techniques available to reduce risk exposures.

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    Question 1
    Two of these reasons are:
    1. The stock prices and hence the return to these stocks generally reflect the ...

    Solution Summary

    The solution examines stockholders indifference with volatile cash flows. The techniques available to reduce risk exposure is determined.