Identify the Types of Firm-Specific Factors That Increase a Firm's

question 17

Essay

Identify the types of firm-specific factors that increase a firm's nondiversifiable risk (systematic risk).Identify the types of firm-specific factors that increase a firm's diversifiable
risk (idiosyncratic risk or nonsystematic risk).Why do models of risk-adjusted expected
returns include no expected return premia for diversifiable risk?

---

Definitions:

Exchange of Assets

A transaction where companies swap ownership of assets without the use of cash, often to achieve operational efficiencies or strategic objectives.

Fair Value

is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Replacement Value

The cost to replace an asset with another of similar function and efficiency.

AASB 138

The Australian Accounting Standards Board standard that specifies the accounting treatment for intangible assets not covered by other standards.