A Planned Project Is Predicted to Increase Shareholder Wealth but with an Associated

question 6

Multiple Choice

A planned project is predicted to increase shareholder wealth but with an associated increase in the level of risk. What will the shareholders reaction be?

• A) They will require a lower discount rate.
• B) They will adopt a longer time- frame.
• C) They will require a lower performance spread.
• D) They will require a higher discount rate.

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Definitions:

Unconditional Positive Regard

Unqualified caring and nonjudgmental acceptance of another.

Free Association

A method in psychoanalysis where the patient speaks freely to reveal unconscious thoughts and feelings.

Resistance

The refusal to accept or comply with something; the attempt to prevent something by action or argument.

Reactance

A motivational reaction to offers, persons, rules, or regulations that threaten or eliminate specific behavioral freedoms, often resulting in a desire to regain the restricted freedom.