All else equal, a more liquid equity will have a lower ________.

Question

Quizplus · Accepted Answer

A more liquid equity typically has a lower cost of capital because investors are less concerned about the ability to sell their shares without affecting the price. Additionally, liquidity itself doesn't directly affect beta, which measures a stock's volatility in relation to the market. However, a more liquid stock might be perceived as less risky, potentially leading to a lower cost of capital.

All Else Equal, a More Liquid Equity Will Have a Lower