Riskier firms have a lower risk-adjusted cost of capital resulting in lower share prices for those companies.

Name: Riskier firms have a lower risk-adjusted cost of capital resulting in lower share prices for those companies.
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Question

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Riskier firms have a higher risk-adjusted cost of capital as investors demand a higher return to compensate for the additional risk involved. This results in higher share prices for those companies that compensate for the additional risk.

Riskier Firms Have a Lower Risk-Adjusted Cost of Capital Resulting