You are a major stockholder of a large corporation. You have news from a credible source that the company's earnings report is going to indicate record losses
If you and other major stockholders receive the same news, what is your likely behavioral response and what impact will that have on the price of the company's stock?
You and the other major stockholders may likely opt to sell either large chunks of your stock or perhaps all of your holdings. Either way the effect of all of this stock suddenly hitting the market all at once should have the effect of lowering the company's stock price.
You might also like to view...
Suppose the figure shown represents the production possibilities frontier for Country A. Country B offers to trade four trucks for every airplane. Assuming Country A specializes in airplane production, which of the following combinations of goods could Country A consume?
A. (15 airplanes, 20 trucks)
B. (10 airplanes, 20 trucks)
C. (10 airplanes, 30 trucks)
D. (5 airplanes, 20 trucks)
The Federal Reserve System was established in
a. 1980. b. 1913. c. 1864. d. 1791.
Economists define capital as the
a. accumulation of goods produced in the past that are being used in the present to produce new goods and services. b. goods and services that are most affected by changes in technology. c. factors of production that can be rented by firms. d. factors of production that can be purchased by firms.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher