Question
12) Provide and briefly explain four thematically distinct reasons why a companys profits could go up next year but the price of a share of
12) Provide and briefly explain four thematically distinct reasons why a companys profits could go up next year but the price of a share of its stock could still fall during that year. (Examples on thematically distinct: a large fire, a flood, and an earthquake are not thematically distinct ways that a house can be destroyed as theyre all natural disasters. On the other hand, a natural flood and arson are thematically distinct ways that the house could be destroyed.) The safe yield is 3.5% A company has an annual Total Revenue of $20,000,000 and Total Costs of $16,500,000. Assume that the previous three numbers are expected to stay constant into the foreseeable future. The company has a total of 2,000,000 shares, and has been sending its profits to its shareholders in the form of dividends.
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