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M is a listed company.

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M is a listed company. It is hoping to invest in a risky new venture. M has a substantial amount of cash to invest in the venture. M would have found it difficult to raise new finance as it has a high level of gearing. Which of the following statements about stakeholders' conflicting interests are true?

A.

M's shareholders would only be exposed to the systematic risk from the investment in the new venture.

B.

M's credit rating is likely to fall as a result of this new venture.

C.

The directors would only be exposed to the systematic risk from the investment in the new venture.

D.

M's diversification will mean less risk for the shareholders.

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