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cupoosta [38]
3 years ago
6

Why would a decrease in a company's stock value make them nervous, even though the decrease might be small?

Business
1 answer:
Gemiola [76]3 years ago
3 0
A decrease in a company stock value will make the company nervous even if the decrease is small due to these following scenarios.

1) They don't have a stockpile of cash.
2) It will become a problem for companies that relies on outside financing to fund their operations. Decrease in stock value will make their creditors wary in letting them borrow more money.
3) Many stock companies use stock options as part of their employee benefits. If the value decreases, then employees will not be encouraged to stay on with the company.
4) Continuous decrease in stock value will result to disgruntled stakeholders which may prompt dismissal of the CEO and his/her team and replacing them with more capable people..
You might be interested in
Which tool of monetary policy allows the Federal Reserve to increase the
Alexeev081 [22]

Answer:

C. Reducing the reserve requirement on banks

Explanation:

The Federal Reserve( Fed) expects commercial banks to maintain a percentage of customer deposits in their custody. The amount that the banks keep is known as reserves. The Fed sets the percentage of deposits to be held as reserves. The Fed may adjust this percentage in line with its monetary objectives.

By reducing the reserve requirements percentage, commercial banks remain with a bigger portion of deposits that they lend out. It means banks will issues out more loans to customers. An increase in lending adds more money to the economy. Reducing the reserve requirement increases the money supply in the country.

3 0
4 years ago
EBook
KonstantinChe [14]

Answer:

Cost Flow Methods

Gross profit and ending inventory on April 30 using:

                                                          Gross Profit     Ending Inventory

(a) first-in, first-out (FIFO)                     $75                   $546

(b) last-in, first-out (LIFO)                       $71                   $542

(c) weighted average cost method     $73                   $544

Explanation:

a) Data and Calculations:

Item Beta   Cost

April 2  Purchase   $270

April 15  Purchase   272

April 20  Purchase 274

Total                      $816

Average cost per unit = $272  ($816/ 3 units)

Assume that one unit is sold on April 27 for $345

Gross profit and ending inventory on April 30 using:

                                                          Gross Profit            Ending Inventory

(a) first-in, first-out (FIFO)                 $75 ($345 - $270)  $546 ($816 - $270)

(b) last-in, first-out (LIFO)                   $71 ($345 - $274)   $542 ($816 - $274)

(c) weighted average cost method $73 ($345 - $272)  $544 ($816 - $272)

Ending inventory = Cost of goods available for sale Minus Cost of goods sold

Gross profit = Sales Minus Cost of goods sold

3 0
3 years ago
2. Nike, the US Sportswear company, produces all of its footwear in foreign countries (mainly in China, Vietnam, and Indonesia).
djverab [1.8K]

Answer:

Nike is the US Sportswear company, produces all of its footwear in foreign countries (mainly in China, Vietnam, and Indonesia). These countries are developing and labor is cheap there. In this way, the production is cheaper and maintain the price of their product competitive. This way, Nike follows and maintains a specific pricing strategy. Nike also follows a Cost Leadership generic business strategy to sustain a competitive advantage based on cost.

Nike also follows a competitive strategy of 'Product Differentiation', 'Focus on market Niche' and 'Strengthen customer and supplier intimacy' to improve its stand against its competitors. There is huge scope for varied market needs based on games played in different countries across the globe. Thus, there is a huge demand for Nike products outside of their national boundaries.

5 0
3 years ago
You work for xyz realty under the supervision of broker luke. your buddy in the next county gave you a referral fee. the check c
zavuch27 [327]

N<u>o</u><u>, because all </u><u>compensation</u><u> must come through your </u><u>broker</u><u>.</u>

Which of the following actions should be taken when holding an open house?

Schedule the open house soon after the property hits the market.

Which of these statements best describes the concept of procuring cause?

Procuring cause means the licensee's actions produced a ready, willing, and able buyer.

Which of the following is true regarding a broker's commission in a real estate transaction?

  • The commission must be stated in the listing agreement and is set by the broker.
  • Commissions are determined at a special meeting of the local realtor board once a year.

Learn more about compensation

brainly.com/question/13755469

#SPJ4

4 0
2 years ago
Consider the multifactor APT with two factors. Portfolio A has a beta of .5 on factor 1 and a beta of 1.25 on factor 2. The risk
Dovator [93]

Answer:

(B) 16.25%

Explanation:

Using the multifactor APT,

E(R_{A} ) = R_{f} + \beta_{1}.RP_{1} + \beta_{2}.RP_{2}

where E(R_{A} ) = expected return on portfolio A,

R_{f} = the risk free rate of return,

\beta_{i} = beta on factor "i"

RP_{i} =  risk premium on factor "i".

Therefore,

return on portfolio A = 7% + (0.5 * 1%) + (1.25 * 7%)

= 0.07 + (0.5 * 0.01) + (1.25 * 0.07)

= 0.07 + 0.005 + 0.0875

= 0.1625

= 16.25%.

7 0
3 years ago
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