1. What were the risk factors that AES had come across in developing markets? In what way did these factors influence the company?
Risk factors AES had came across in developing markets are-
1.Political Risks - An emerging market has fluctuations in political governance as there is instability of politics. A company is exposed to such risks as it has to keep itself within political protection.
2. Bad corporate governance - In developing economies, there are growing risks of company committing frauds due to bad corporate governance. A good corporate governance fetches premium in share prices in developing economies.
3. Less liquidity in comparison to developed markets as there are less volumes so investors prefer such shares where liquidity is very high in developing economy so they could get an exit anytime they want to.
4. Insider trading are very high as regulations are not that transparent in comparison to developed countries.
1. What were the risk factors that AES had come across in developing markets? In what...