Assume firms are all-equity financed. Do you agree with the following statements?

Select one of the following: Yes (Y), No (N), or Uncertain (U).

Part (A)

Diversifying a firms business is always desirable since it helps to reduce its shareholders risk.

Part (B)

A firm held by mostly short-term investors should avoid long-term projects in order to better match with shareholders time preferences.

Part (C)

Maximizing a firms current market value benefits all of its shareholders.

Part (D)

Taking on very risky but positive NPV projects will hurt the firms most risk averse investors.