Tuesday, August 2, 2011

What are the assumptions of Perfect Capital Market?

Assumptions of Perfect Capital Market

The assumptions of perfect capital market are enumerated below : -
  • No transaction (brokerage) costs,
  • No taxes,
  • No cost to obtain information,
  • No cost with financial distress,
  • Large number of buyers and sellers, so the traded security's prices is affected with no one buyer or seller,
  • Both individuals and firms have equal access to market,
  • Every on has the same expectations,

Source: Here
 
 

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