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Dear Sir , kindly tell the difference of cost of equity and market value of equity.
Also kindly tell something about asset stripping.
The cost of equity is effectively the interest cost to the company of raising equity (but instead of interest they are paying dividends), and is the same as the shareholders required rate of return.
The market value of equity is the price at which it is trading on the stock exchange and is the present value of the future expected dividends discounted at the shareholders required rate of return.
This is all explained in detail in my free lectures.
Asset stripping is when someone buys a company with the intention of immediately selling off all of the assets of the company rather than intending for the company to carry on trading. They do it when they think that they can sell of all of the assets and get more than they have had to pay for the company.
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