If the risk of a company increases the following will happen: a. The earnings yield will increase. b. The PE ratio will increase. c. The earnings per share will decrease. d. None of the options.
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When a company's risk increases, investors require a higher return to compensate for this increased risk. This could potentially lead to a decrease in the company's stock price, as investors may be less willing to pay a high price for the company's shares. a. Show more…
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