Asked by Brooke Candia on May 16, 2024
Verified
Shareholders focus solely on the firm's expected profit to assign a price to its stock.
Expected Profit
The forecasted gain or loss from a business venture or investment, calculated by multiplying the potential outcomes by their probabilities.
- Recognize components impacting share price fluctuations and investment decision-making.
Verified Answer
JH
Jinan HoujeijMay 16, 2024
Final Answer :
False
Explanation :
Shareholders consider a variety of factors including expected profits, risk, market conditions, and broader economic indicators to assign a price to a firm's stock.
Learning Objectives
- Recognize components impacting share price fluctuations and investment decision-making.