What is the Portfolio Theory assumption?

Discuss the information effect or the signalling effect of dividends.

What are the two types of financial distress costs? Give an example of direct bankruptcy costs?

According to the CAPM, the expected return on a risky asset depends on three components.

Describe each component, and explain its role in determining expected return.

Explain the concept of 'homemade dividend policy'.

What is diversification? What is the variable that plays the most important role in reducing the portfolio risk?

Define the three forms of market efficiency. What do we mean when we say the markets are efficient?

What are the lessons learned from capital market history?

Relationship between risk and reward?

What is market risk premium?

What is CAPM? In equilibrium, what does CAPM implies?

What is the residual dividend policy?