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Why are shareholders more keen on investing in high-risk projects during times of financial distress?
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Why are shareholders more keen on investing in high-risk projects during times of financial distress?

User Steven Moseley
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1 Answer

30 votes
30 votes

Answer:

Because the shares price of that company will be reduced that gives shareholders to own more thus owning a greater percentage of the company

Step-by-step explanation:

Let's say Washer Ltd is high-risk and they have taken a stand to reduce their ordinary share price in order to attract investors, from R6,90 to R3, 90 per share

Instead of the shareholder paying the full price for less shares, he can buy more share for half the amount of money

User Alan Ocallaghan
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