Sep 2005, q2 (ii)

Discussion in 'SA5' started by Edwin, Jan 27, 2015.

  1. Edwin

    Edwin Member

    April 2005, q2 (ii)

    It is not clear to me how a company faces equity risk by issuing equity, I would assume that the equity risk here is faced by investors?

    Also would it have been ok to state property risk (coming from investments in Europe industrial property) as an example of market risk?

    This is actually APRIL2005.
     
    Last edited by a moderator: Jan 28, 2015
  2. Colin McKee

    Colin McKee ActEd Tutor Staff Member

    The equity risk is that the equity market is volatile during the transaction, which would indeed cause a risk for the company. I suspect property was omitted because it is not as volatile as the equity markets.
     

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