Cash Flows and Risk Are the Key Determinants in Share

question 68

Multiple Choice

Cash flows and risk are the key determinants in share price. Increased risk, other things remaining the same, results in ________.

• A) a lower share price
• B) a higher share price
• C) an unchanged share price
• D) an undetermined share price

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Definitions:

Cash Inflows

The total amount of money being transferred into a business, typically from operational, investing, and financing activities.

Control Costs

The process of monitoring and managing expenses to adhere to a budget and maximize efficiency.

Managers' Performance

The evaluation of how effectively managers achieve objectives, manage resources, and lead teams, often impacting company success and efficiency.

Investment Center

A business unit or division that is responsible for its own revenues, expenses, and investments in assets.