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Which of the following statements is INCORRECT about stock prices and shareholder value (or the intrinsic value)? A) In equilibrium, a stock's price should equal
Which of the following statements is INCORRECT about stock prices and shareholder value (or the intrinsic value)? A) In equilibrium, a stock's price should equal its "true" or intrinsic value. B) Intrinsic value is a short-run concept. C) To the extent that investor perceptions are incorrect, a stock's price in the short run may deviate from its intrinsic value. D) Ideally, managers should avoid actions that reduce intrinsic value, even if those decisions increase the stock price in the short run. The conflict of interest exists between stockholders and creditors in a corporation because stockholders may A) Increase the firm's investment risk level B) Decrease the amount of debt outstanding C) Decrease the risk of a firm's investment D) Increase the firm's net worth
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