What Is the Bystander Effect? What Factors Have Been Suggested

question 8

Essay

What is the bystander effect? What factors have been suggested to explain why it occurs?

---

Definitions:

Cost of Equity

The rate of return that a company must offer investors to compensate for the risk of investing in its equity.

Flotation Costs

Expenses incurred by a company in issuing new securities, including underwriting, legal, and registration fees.

Dividends Low

This term implies a situation where a company issues dividends at a lower rate or amount, possibly reflecting a strategy to reinvest earnings into the business or an indication of financial conservation.

Information Content Effect

The impact of news or information release on the financial markets, especially regarding the price of securities.