Question: Your CEO has just come to you with a problem. He is concerned because the company stock price is falling, despite consistently healthy profits. When

Your CEO has just come to you with a problem. He

Your CEO has just come to you with a problem. He is concerned because the company stock price is falling, despite consistently healthy profits. When you investigate his concern, you see that your company beta has risen considerably in the last few years. Explain to your boss 1) why the beta may have changed, 2) why this means a falling stock price, and 3) what can be done to improve the situation. (30 points)

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