Business Finance
Saudi Electronic University What Is the Marketability Premium Essay

Saudi electronic university

Question Description

I’m trying to learn for my Accounting class and I’m stuck. Can you help?

What is the marketability premium?

Why should an issuing firm consider paying this premium?


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Final Answer

Attached.

Running head: MARKETABILITY PREMIUM

Marketability Premium
Name
Institution

1

MARKETABILITY PREMIUM

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Marketability Premium

The concept of marketability refers to the ease in which an investor can get a buyer for a
particular security at a minimal cost of transaction. As well, the buyer must be willing to pay for
the security at the market value. Notably, the aforementioned cost of transaction will include the
fee that will be charged in the process of searching for information. If a security has low
transaction cost, then it is considered to be more marketable. From a general perspective,
investors will, in many instances, prefer the securities that are more marketable since that implies
they do not have ...

Kishnewt2017 (32381)
Duke University

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