The Price Of His Shares Will Rise If Robotroid Issues Additional Shares Of Stock.

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The Price Of His Shares Will Rise If Robotroid Issues Additional Shares Of Stock.

xpectations of a recession that will reduce economy-wide corporate profits will likely cause the value of Sean's shares to decline. -An increase in the perceived profitability of RoboTroid will likely cause the value of Sean's shares to rise. -The price of his shares will rise if RoboTroid issues additional shares of stock.
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-Expectations of a recession that will reduce economy-wide corporate profits will likely cause the value of Sean's shares to decline. -An increase in the perceived profitability of RoboTroid will likely cause the value of Sean's shares to rise. Explination: Corporations issue stock to raise money, a practice known as equity finance. Each share of stock represents partial ownership of the company, so investors' perceptions of the company's future profitability are reflected in the price of the firm's stock. The price of a stock is determined by the forces of supply and demand. If people expect a corporation to have unusually high profits in the future, demand for the stock increases, and its share price rises. A stock index represents an average of a group of stock prices. If optimism about corporate profits is economy-wide, we would expect the major stock indexes, such as the Dow Jones Industrial Average or the Standard and Poor's 500, to increase in value. An increase in the number of shares of stock a company issues represents an increase in the supply of the sharesÑit will reduce the value of each share since the value of the company is thereby split into smaller units. A firm can raise money only through an initial offering of its shares. Once the shares begin trading among stockholders on organized stock exchanges (like the New York Stock Exchange), the proceeds from selling a stock accrue directly to the stockholders.
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