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Why should you ensure stock prices reflective potential risk

Why should you ensure stock prices reflective potential risk

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Stock price of a company reflects the true position of the company.The stock price incorporate all risk faced by company whether market risk, industry risk, product risk and any other risks.We should ensure all potential risk must be disclosed by the company so that share price of the company reflects such risk as various stakeholders of company rely on stock prices of the company to judge the performance of company.If the share price of the company bdeos not reflect its true position then it can lead to insider trading also.The actual performance of company can't be ascertained.

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