How do changes in equilibrium price and quantity affect demand?
Question: Which of the following statements best describes how a change in a firm's stock price would affect a stock's capital gains yield? The capital gains yield on a stock that the investor already owns has an inverse relationship with the firm's expected future stock price. The capital gains yield on a stock that the investor already owns has a direct relationship
What determines a stock's market price?
Oct 09, 2016 · Which one of the following statements best describes how a change in a firm’s stock price would affect a stock capital gains yield: a) capital gains yield on a stock that an investor already owns has an inverse relationship with the firms expected future stock price. b) capital gains yield on a stock that an investor already owns has a direct relationship with the …
What is an event that affects supply and demand?
FinanceQ&A LibraryWhich of the following statements best describes how a change in a firm’s stock price would affect a stock’s capital gains yield? The capital gains yield on a stock that the investor already owns has an inverse relationship with the firm’s expected future stock price. The capital gains yield on a stock that the investor already owns has a direct relationship with …
What happens when demand and supply change?
Which of the following statements best describes how a change in a firm's stock price would affect a stock's capital gains yield? The capital gains yield on a stock that the investor already owns has a direct relationship with the firm's expected future stock price.
Why do long run earnings grow?
Long-run earnings growth occurs primarily because firms retain earnings and reinvest them in the business.
What was Citigroup stock price in 2006?
In November 2006, Citigroup's stock (NYSE: C) was trading at $49.59. Following the credit crisis of 2007-2008 and by the end of October 2009, Citigroup's stock price had plummeted to $4.27. Several banks went under, and others saw their stock prices lose more than 60% of their value.
What is the price of a stock based on?
A stock's market price is often based on investors' perceived risk in the company.
What is classified shares?
Classified shares have super voting rights, which give more control to a certain class of investors. Benjamin Graham, the father of value investing, once said, "In the short run, the market is a voting machine, but in the long run, the market is a weighing machine.". In this quote, Benjamin Graham was referring to the key difference between ...
When using a constant growth model to analyze a stock, if an increase in the required rate of return occurs
When using a constant growth model to analyze a stock, if an increase in the required rate of return occurs while the growth rate remains the same, this will lead to a decreased value of the stock.
Is Walter utilities a dividend paying company?
Mature companies with relatively predictable earnings. Walter Utilities is a dividend-paying company and is expected to pay an annual dividend of $2.65 at the end of the year. Its dividend is expected to grow at a constant rate of 6.50% per year.
When using a constant growth model to analyze a stock, if an increase in the required rate of return occurs
When using a constant growth model to analyze a stock, if an increase in the required rate of return occurs while the growth rate remains the same, this will lead to an increased value of the stock.
Where does the return on a stock come from?
The return on this type of stock primarily comes from capital gains.
Why do stockholders buy additional shares?
This protects common stockholders from the management team of a firm issuing a large number of additional shares and purchasing these shares themselves in an attempt to gain greater control over the company.
Why are common stockholders considered owners?
It is common to refer to common stockholders as the "owners" of a firm, because investors in common stock have certain rights and privileges generally associated with property ownership. Common stockholders bear most of the risk associated with a firm's operations, but they tend to benefit the most when a firm performs well. Each of the statements below describes a term associated with common stock. Identify which statement corresponds with each term listed in the table below:
Why is preferred stock preferred?
Preferred stock, because its has priority over debt in the payment of dividends and the distribution of liquidated assets
What is the formula for valuation of a preferred stock?
The formula for the valuation of a share of preferred stock is P0=D/rsP0=D/rs. In this equation, the variable rs represents the
Why is preferred stock not a sinking fund?
Debt, because its interest payments are tax deductible. Debt, because its interest payments are tax deductible. Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period.
How many steps are there in the supply and demand framework?
There is a four- step process that allows us to predict how an event will affect the equilibrium price and quantity using the supply and demand framework.
What does shift to digital communication mean?
A shift to digital communication will tend to mean a lower quantity demanded of traditional postal services at every given price, causing the demand curve for print and other traditional news sources to shift to the left, from to .
How does good weather affect supply?
Good weather is a change in natural conditions that increases the quantity supplied at any given price. Because of this, the supply curve shifts to the right, moving from the original supply curve to the new supply curve . You can see the shift in both the demand and supply model and in the table.
What does shift to digital news mean?
A shift to digital news sources will tend to mean a lower quantity demanded of traditional news sources at every given price, causing the demand curve for print and other traditional news sources to shift to the left , from to .
What is the new equilibrium?
The new equilibrium— —occurs at a lower quantity and a higher price than the original equilibrium—.
Why does postal compensation increase?
For example, more and more people are using email, text, and other digital message forms such as Facebook and Twitter to communicate with friends and others, and at the same time, compensation for postal workers tends to increase most years due to cost-of-living increases.
How much did jet fuel decrease in 2015?
From August 2014 to January 2015, the price of jet fuel decreased roughly 47%. Using the four-step analysis, how do you think this fuel price decrease affected the equilibrium price and quantity of air travel?
How are changes in real GDP determined?
E) changes in real GDP are determined by the changes in potential output
What is potential output?
A) potential output is adjusting to changes in factor supplies
Is factor price exogenous?
A) Factor prices are exogenous, and technology and factor supplies are changing.