Asked by NDIVHUWO SANDRA on Jun 03, 2024
Verified
In the long run,stock prices tend to follow a company's profits.
Stock Prices
The current price at which a share of a company is traded on the stock market.
Company's Profits
The financial gain generated by a business, determined by subtracting total expenses from total revenue.
- Provide a definition and outline the importance of secondary markets.
Verified Answer
WL
Watson LewisJun 05, 2024
Final Answer :
True
Explanation :
Over time, a company's stock price is generally influenced by its earnings and growth prospects. If a company consistently increases its profits, it is likely that its stock price will also rise as investors value the company's ability to generate earnings. Conversely, if a company's profits decline, its stock price may also fall. This relationship is based on the fundamental principle that a stock's value is derived from the present value of its future earnings.
Learning Objectives
- Provide a definition and outline the importance of secondary markets.
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