All other things being equal, the lower a company's cost of equity the higher its stock price should be.

Name: All other things being equal, the lower a company's cost of equity the higher its stock price should be.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A lower cost of equity means that investors require a lower rate of return to invest in the company, which should result in a higher stock price as investors are willing to pay more for future earnings. This assumes that all other factors remain constant.

All Other Things Being Equal, the Lower a Company's Cost