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As the risk associated with equity is greater than debt & so the return is also greater,but as shareholder’s dividends are not promised always then how return is greater??
You really need to watch our free lectures on the valuation of securities.
Shareholders fix the share price so as to get the return (in % terms) that they require.
(Our free lectures are a complete course for Paper F9 and cover everything needed to be able to pass the exam well)
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