Arbitrage
Favorite Answer
It deals with the capital structure of the company. As the company has more debt and less equity, it's more highly levered and thus more risky, leading to a higher P/E. With more stock than equity, there's less risk, which would probably trade at a lower P/E.
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there ought to nicely be many factors affecting the cost of an fairness percentage. On a vast foundation there are macro and micro economic factors. Macro economic factors ought to nicely be like politics, regularly occurring econmic situations i.e. how the commercial equipment is appearing, authorities guidelines etc. Then there ought to nicely be different factors like call for and furnish situations that must be triggered by technique of the performance of the corporation and ofcourse the performance of the corporation vis a vis the market performance and the performance of the different gamers contained in the market.
Al
collectable debt and realizable equity!!
In Honor of Moja
You broke my brain with that one! As Forrest Gump said, "Stupid is as stupid does." I'm almost inspired to go jump in the lake.