Choosing projects with returns equal to the company norm but having a higher level of risk will most likely lower the company's stock price.

Question

Quizplus · Accepted Answer

When a company chooses projects with higher risk, investors may perceive it as a deviation from the company's usual level of risk. This perception of increased risk could lead to a decrease in demand for the company's stock resulting in a lower stock price.

Choosing Projects with Returns Equal to the Company Norm but Having