If two companies have the same net income and the same level of risk,they must also have the same stock price or the market is not in equilibrium.

Question

Quizplus · Accepted Answer

The stock price of a company is not solely determined by its net income and level of risk. Other factors such as market demand, competition, and future growth potential can also affect the stock price. Therefore, two companies with the same net income and level of risk can have different stock prices based on these other factors, and it does not necessarily indicate that the market is not in equilibrium.

If Two Companies Have the Same Net Income and the Same