It Has Been Found That the Share Values of Firms

question 22

Multiple Choice

It has been found that the share values of firms whose shares are traded publicly in an efficient marketplace is

• A) generally positively affected by diversification, because of the reduction in risk.
• B) generally not affected by diversification, unless greater returns are expected.
• C) generally negatively affected by diversification, because of the increase in risk.
• D) generally negatively affected by diversification, because of the increase in the required rate of return.