Stock price behavior is often accompanied by substantial controversy, uncertainty, and speculation.
Select one of the following NBC News videos:
Oprah Sends Weight Watchers Stock Soaring.
Wall Street Goes Wild for Twitter.
Respond to the video you've selected as follows:
How did the stock price immediately respond following these events? How has the stock price changed in subsequent years? What is it trading for today?
How might the present value-free cash-flow method have been used to assess the fairness of the stock price?
What are the challenges of using the present value-free cash-flow method in practice? How can accountants overcome these challenges?