Both present and prospective shareholders are interested in the firm's current and future level of risk and return. These two dimensions directly affect share price.

Question

Quizplus · Accepted Answer

Shareholders are interested in the firm's risk and return because it directly affects the share price. High levels of risk may deter some investors, while high levels of return may attract more investors, which can affect the demand and supply of shares and ultimately influence the share price.

Both Present and Prospective Shareholders Are Interested in the Firm's