The required return by investors is important to financial managers except for which of the following reasons?
A) It influences the firm's cost of financing.
B) It influences their stock price.
C) It is the primary driver of their financial ratios.
D) It helps when pricing new issues of securities.

Question

Quizplus · Accepted Answer

The required return by investors does not directly drive the financial ratios of a firm, although it may indirectly impact them. The other options, A, B, and D, are all valid reasons why the required return by investors is important to financial managers.

The Required Return by Investors Is Important to Financial Managers