Impacts to Common Stock Prices

For this discussion, you are the CFO who accompanied the CEO to the annual shareholders' meeting. The CEO gave an excellent speech that outlined the company's strategic plan, for which he received thunderous applause and praise. Later that week, the CEO calls you, angrily demanding that you, as the CFO, explain to him why the price of the stock was unmoved by his performance and, in fact, dropped.

In your post, provide an explanation to the CEO about what impacts the stock price and what factors cause stock prices to rise and fall. Plus, you will need to indicate why actual market stock prices sometimes vary greatly from academic stock valuations via formulas.