Answered: In your opinion, should a public listed…

In your opinion, should a public listed company pay attention to the market price of its common stocks traded on secondary markets? Justify your answers.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 22Q: What information do you need to calculate the weighted average common shares outstanding?

See similar textbooks

Related questions

Q: How do you carry out your investment strategy for stock securities?

A: The mainly followed investment strategies are value investing, growth investing, momentum investing…

Q: Which of the following statements is true? O The secondary market is important because its existence…

A: SECONDARY MARKET : market where the stock trades.

Q: Why might an investor-owned firm choose to issue different classes of common stock?

A: An investor owned firm issues different classes of common stock mainly due to the difference in…

Q: For investors, the function of secondary markets is to provide marketability for the shares of…

A: Secondary market is a type of market where investors buy and sell securities or assets from other…

Q: The way in which the price of securities determined in Financial Markets is:

A: The correct answer is b. Through frequent interaction between investors.

Q: How does eps affect the stock market

A: The earning per share of the company will be reflective of the total earnings made for each of the…

Q: Discuss the differences between the primary and secondary markets. when we buy stocks through…

A: Primary market is the market where new securities are issued in the market for the first time on the…

Q: Explain the statement “The money market is necessary but not sufficient for the liquidity of…

A: Money market instruments would be considered as investments under short term securities. These…

Q: Discuss similarities and differences between seasoned offerings and right issues for stocks.

A: Firm issues various securities to arrange the funds for the firm’s requirements. Stock or common…

Q: What factors are important when calculating the intrinsic value of a stock?

A: Intrinsic value is the current value of the stock. It is calculated by using the following formula:…

Q: According to our authors, when is the purchase of stock in one company by another classified as a…

A: Trading security- Classification of securities- There are three different classification: a) held…

Q: How does forward pe effect the stock market?

A: P/E refers to the price earnings ratio. It is one of the important valuation metrics that we use in…

Q: Indicate factors influencing the market price of a stock. Explain how changes in the factors will…

A: There can be many factors affecting the stock price, for example, the growth rate, the required…

Q: A fundamental analyst uses the discounted cashflow method to value firms, and has a short-term…

A: Fundamental Analysis is a technique to value firms on the basis of their fundamentals i.e. their…

Q: explain the statement"The money market is neccessary but not sufficinet for the liduiidity of…

A: Money market is an instrument used to provide flow of short term funds in the economy. It consist of…

Q: Discuss how changes in the general stock and bond markets could lead to changes in the required rate…

A: Required rate of return- is the minimum rate of return which an investor expects in return for a…

Q: Which one of the following is correct about individual stocks? Individual stocks are exposed to the…

A: Systematic risk is also known as non-diversifiable risk, and it exist for entire market. It arises…

Q: What are some similarities and differences between the NYSE and theNASDAQ Stock Market?

A: Answer: Financial market is a market for the sale or distribution of financial instruments. Often…

Q: What percentage of stock trading is done off-exchange? Onregistered exchanges?

A: The method of exchanging securities for businesses not registered in a structured exchange such as…

Q: What are the tools and measures that objectively measure the level of emotions among individual…

A: Individual investors are usually those who have a limited amount of investment. These investors…

Q: Both individuals and companies monitor the stock market. Explain how their reasons for doing so…

A: individual monitor their stock price by the following steps 1) keep updated about the latest news…

Q: What factors should a stock analyst think about indetermining the value of a share of stock?

A: Shares are financial instruments that give the holders the status of owners. They enjoy the right to…

Q: What is the most important factor affecting the price movement of common stocks? a. Aggregate market…

A: Following are the factors that affect the price movement of stock prices: Supply and Demand…

Q: n the general stock and bond markets lead to changes in the required rate of return on a firm’s…

A: Step 1 The required reimbursement rate is the minimum refund that an investor will receive from…

Q: i) Identify THREE (3) major differences between primary market and secondary…

A: Secondary markets transfer liquidity benefit to the primary market.

Q: stock markets protect a firms shares from liquidity? true or false

A: Stock markets are said to be amongst the foremost vital components of a free-market economy where…

Q: why is money market necessary but not sufficient for the liquidity of securities on the stock market

A: Money market (MM) is a place where short term (ST) securities are traded. Generally, governments or…

Q: Is stocks or bonds important to the company or just the investor?

A: The company issues ownership rights in the form of shares to the investors to raise the money from…

Q: Why are stocks categorized in terms of market capitalization

A: The total market worth of a firm expressed in dollars is its market capitalization, also referred to…

Q: Explain how financial rumors affect the efficiency of stock markets through two clear examples, at…

A: Rumours are one of the oldest mass mediums in the world. They are pieces of information that often…

Q: How does market cap effect the stock market?

A: Market capitalization is given by the formula: Market capitalization = Price per share x No. of…

Q: How does pe effect the stock market

A: PE reflects the price to earning ratio. It is the ratio of current market price to the earning for…

Q: Why do technical analysts look at the moving average of a company’s stock price, and why do they…

A: Moving Averages Analysis(MAA) is a tool which is helpful in determining the basic trend of the price…

Q: What factors are important when calculating the intrinsic value of a stock?

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Secondary Market can be best described in which of the following statement? a. It is a market for an…

A: Stock market there are buying and selling of securities are done depending on demand and supply of…

Q: Which one of the following is not a money market instrument? a. Equity Shares b. Bankers'…

A: money market instruments are short term liquid instruments which are highly liquid.

Q: What financial ratios would a credit rating agency such as Moody’s or Standard & Poor’s be most…

A: Credit analysts and equity analysts use financial ratios to analyze various aspects of a company.…

Q: Why is stock exchange referred to as a secondary market? What functions does it perform?

A: Primary Market: In primary market shares are directly offered to public for subscription . it is…

Question

In your opinion, should a public listed company pay attention to the
market price of its common stocks traded on secondary markets?
Justify your answers.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

What effect does the trend in stock prices (subsequent to issue) have on a firm’s ability to raise funds through: (a) convertibles and (b) warrants?
What information do you need to calculate the weighted average common shares outstanding?
explain the advantages and disadvantages of common stocks to the issuing firms?
Which of the following holds true about the Stock market? a. It is for Purchase and sale of goods. b. It facilitates Purchase and sale of securities continuously c. It is for New issue of Bonds d. It is a Market for New issue of Shares
Both individuals and companies monitor the stock market. Explain how their reasons for doing so might differ.
Secondary Market can be best described in which of the following statement? a. It is a market for an unlisted company to raise equity capital. b. It is a market where securities are issued through private placement. c. It is a market in which short-term money market instruments such as Treasury bills are traded. d. It is a market in which preowned securities are traded.
a. What determines stock market valuations? b. Is a stock's price primarily determined by the discounted sum of future cash flows, monetary policy, or fear and greed? c. Is market timing possible using sentiment indicators such as put/call ratios and Investor's Intelligence surveys? Please ensure to add references and citations.
Describe the features of a common stock and explain what you understand by primary and secondary markets.
How might an issue (negative or positive) within the overall stock market impact the company’s stock valuation numbers, other financial variables, or its overall portfolio management? please support by evidence
Which of the following characteristics accurately describes the stock market? An active market that determines the price of a firm’s shares A fixed-income market where participants buy and sell debt securities The bid-ask spread in a dealer market represents the profit that a dealer would make on a transaction involving a security. Which of the following statements best describes the bid-ask spread? The difference between the closing price of the security and the opening price of the security on the day of the transaction. The sum of the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it. The difference between the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it. Fernando, a trader, wants to buy 1,000 shares of XYZ stock, while a second trader, Ally, is willing to sell 1,500 shares of the same stock. Unfortunately, Fernando…
How does forward pe effect the stock market?
A stock market analyst is able to identify mispriced stock by analyzing the financial statements of the company’s stock. what is the efficiency form of this market? Explain.