EXPLORING ECONOMICS
8th Edition
ISBN: 2818000015614
Author: Sexton
Publisher: SAGE
expand_more
expand_more
format_list_bulleted
Question
Chapter 21, Problem 1P
To determine
To explain:
The reasons for firms do not want to issue new shares of stock when consumers or businesses are negative about the economic conditions.
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Explanation of Solution
The share prices are likely to fall when consumers or businesses are pessimistic about economic conditions. So,if there is a situation where consumers or businessmen are pessimistic, the firms should issue a larger number of stocks to raise some funds. Likewise, these firms are apt to spend in new capital or new expenditure when economic conditions are not in support of them.
Economics Concept Introduction
Stock:
The ownership on a company's assets and earnings in form of share is known as stock. The person having share can claim ownership for that part.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Is maximizing a firm’s profits always identical to maximizing the firm’s stock market value?
How economy plays a vital role in
controlling stock prices.
What effect might a fall in stock prices have on businessinvestment?
Knowledge Booster
Similar questions
Recommended textbooks for you
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, IncPrinciples of Macroeconomics (MindTap Course List)EconomicsISBN:9781305971509Author:N. Gregory MankiwPublisher:Cengage LearningPrinciples of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage Learning
- Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage LearningPrinciples of Macroeconomics (MindTap Course List)EconomicsISBN:9781285165912Author:N. Gregory MankiwPublisher:Cengage LearningBrief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305971509/9781305971509_smallCoverImage.gif)
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781285165875/9781285165875_smallCoverImage.gif)
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781285165912/9781285165912_smallCoverImage.gif)
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337091985/9781337091985_smallCoverImage.gif)
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning