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Preferred habitat theory (See Chapter 20 of the Vernimmen)
Preferred habitat theory, proposed in the mid-1960s by Franco Modigliani and Richard Sutch, states that Investors prefer certain Investment timeframes. Companies that wish to issue securities whose timeframe is considered undesirable, will thus have to pay a Premium to attract Investors. See also liquidity preference theory.
Preferred habitat theory (See Chapter 20 of the Vernimmen)
Preferred habitat theory, proposed in the mid-1960s by Franco Modigliani and Richard Sutch, states that Investors prefer certain Investment timeframes. Companies that wish to issue securities whose timeframe is considered undesirable, will thus have to pay a Premium to attract Investors. See also liquidity preference theory.
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