Question
I would like you to consider and comment on the stock price of this company and why that stock may trade in the range it
I would like you to consider and comment on the stock price of this company and why that stock may trade in the range it does. If you go onto Yahoo Finance, you would be able to determine that Warren Buffet's company Berkshire Hathaway (BRKA) trades at $267,000 per share. That's right, if you wanted to buy one share of BRKA, you would have to have $227,000 to do so. Meanwhile, you could buy one share of Apple, Inc. for $157 and one share of General Motors for a mere $35.
a. Why are there these discrepancies in the valuation of one common share vs. another and how do you the potential shareholder should evaluate these variances?
b. How do these variance reflect on the company's capital structure and perhaps other decisions the company has made concerning its share price?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started