Cash Flow and Risk Are the Key Determinants in Share

question 116

Multiple Choice

Cash flow 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:

Bonding Company

A company that provides financial assurance to a third party through a bond, guaranteeing the performance of an individual's or company's obligations.

Right of Reimbursement

The legal right to be compensated or repaid for costs, expenses, or losses that have been incurred on behalf of another party or as a result of certain conditions being met.

Promissory Note

A financial instrument or written promise in which one party agrees to pay a specified sum of money to another party under set conditions.

Artisan

A skilled craftsman who produces items by hand, often with a high degree of craftsmanship and specialization in a particular trade.