Value Creation and Stock Prices
Lecture no. 12 from the course: Advanced Investments
Taught by Professor Steve L. Slezak | 31 min | Categories: The Great Courses Plus Online Economics & Finance Courses
Consider how the equity returns on two firms that are essentially in the same business can be very different based solely on differences in capital structure. Both can be efficiently priced, but one will have a higher equity return due to its higher leverage and resulting risk.