Market price of equity shares ________ if the benefits from a decision exceed the cost involved.

increases

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decreases

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equalizes

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both a and c

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Solution

The correct option is A increases
Market price of equity shares will increase because if benefit from a decision exceeds the cost involved, wealth maximization will increase hence if revenue covers the cost then ultimately earning per share will increase.

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Similar questions

P = \frac{D + \frac{R_{a}}{R_{c}} (E - D)}{R_{c}}

P =

D = D P S

E = E P S

E - D =

R_{a} =

R_{c} =

14 %

Q8. Consider the following statements about Equity Markets:

1. An equity market is different from a share market.

2. Equity market is the aggregation of buyers and sellers of stocks.

Select the correct answer using the codes given:

100

500

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