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Question Completion Status: O False QUESTION 18 Which of the following changes will decrease the value of common stock, other
Question Completion Status: •.0760 0.0746 0.0360 QUESTION 17 The constant dividend growth model is only meaningful for compan
lue False QUESTION 5 The capital asset pricing model cannot be used in the absence of a risk-free asset. True O False QUESTIO
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Answer #1

18)

If investors become risk averse, their required return will increase. If required return increase, value of common stock will decrease and vice-versa.

Hence, correct option is “In general, investors become more risk averse”

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