Scholes argues that financial technology will make it easier for companies to become private or remain so. They will insure themselves through hedging in the futures and options markets. And by reducing their risks, they will need less of a safety cushion of equity. Scholes cites Cargill as a company that has managed to remain private through hedging. It has been quite a while since the days of green eyeshades and No.2 pencils.
Innovation is everywhere.
The McGraw-Hill Companies Inc. All rights reserved.