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why are shareholder expectations important in developing the cost of common equity when the company has no control over the behavior of the stock market?
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because not all investors are equal as regards to risks and their individual goals, and age. These are just 3 factors. Some more are
1. Is the investor married? And if so how may childre? What theiages?
2. Does the investor have the resources to invest?
Are his or hers goals immediate or futer?
3. Are they willing to lose big, to win big?
6. Also one day the shareholder will retire-then conserbatism is more impo...
1. Is the investor married? And if so how may childre? What theiages?
2. Does the investor have the resources to invest?
Are his or hers goals immediate or futer?
3. Are they willing to lose big, to win big?
6. Also one day the shareholder will retire-then conserbatism is more impo...
Source: Federal Employees Reetirement System, Wall Street Journal, and I an investor myself
Answer Date: 10:18am 03/24/08
