In common stock valuation, any action taken by the financial manager that increases risk will cause an increase in value.

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Quizplus · Accepted Answer

In common stock valuation, any action taken by the financial manager that increases risk will generally cause a decrease in the value of the stock. This is because investors require a higher return to compensate for the higher level of risk, which reduces the present value of the expected future cash flows.

In Common Stock Valuation, Any Action Taken by the Financial