University of California Economics Discussion


Answer the following questions. There is no right or wrong. Just say your own opinions.1. How would you define “risk”? 2. Have you previously studied present value models? If so, how would you describe the intuition of present value and the time value of money?What about the dividend discount model, or bond pricing topics such as duration and convexity, have you studied those.3. Some companies pay dividends, and others do not. Why?4. Firms can raise additional capital, say to build a new factory or launch a new business line, in two ways. One way is raise equity by issuing more shares. But, if you are an existing shareholder, your ownership stake will be diluted by issuing more shares (if you owned 1% of the company before the new issuance, you will own <1% after). Why would existing shareholders ever support issuing new shares?5. What does it mean, if the "Expectations Hypothesis" is true, if the yield curve slopes down? Why would markets/investors care about an "inverted" yield curve? Explanation & Answer: 1 Page Tags: economics companies Risk User generated content is uploaded by users for the purposes of learning and should be used following FENTYESSAYS.COM ESSAY's honor code & terms of service.