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A stock price falls. Where has the money gone that investors had paid for the stock?
Wiki User
∙ 11y ago
There are a two ways to look at this question:
- When a stock is purchased, funds are transferred from the buyer to the seller. Thus, the stock's reduction of value does not change the amount of money in the system. The decline in the stock's value is reflected as a decline in wealth for the stock holder but in a "non-currency" manner.
- If the stock purchased was from a short seller, than the decline in stock value decreases the wealth of the stock holder but increases the wealth of the short seller.
Wiki User
∙ 11y ago
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What does a company's stock price say about that company?
A company's stock price can show the following:The confidence and trust investors have on this companyThe profit making history of the companyThe probabilities of reaping capital appreciation on this stocketcRoughly: The higher a stocks price in the market when compared to its face value, the greater investors confidence in it.
Why do public companies want to maintain a high stock price How do they make money by keeping the stock up?
Maintaining a high stock price allows a company to access the capital markets by issuing more stock at these higher prices and bringing in more cash for the company to use in its business. A high stock price is also a sign of investor confidence in the company, as well as a necessary requirement to maintain a stock exchange listing or bring in institutional investors as holders of the stock.
What effect Enron conduct had on stock prices?
After the Enron accounting scandal came to light, its stock price plummeted to 0, which wiped out many investors who had purchased Enron's stock.
Which of the following is a true statement about the call option?
It is a way for investors to avoid paying a future higher price of a stock. NOVANET
What is the importance of the current price on stocks?
In isolation, the current stock price tells you how much money you have to produce if you want some of it. More important is the price of stock over time.
Why did Bill Gates lose his money?
Most of Bill Gates money is invested in Microsoft stock. Therefore, when the price of the stock rises he makes money and when the price of the stock goes down he loses money, just like all the other stock investors in the world. Also, when he transfers money from his own account into his charity, his own net worth goes down.
Can a firm increase its stock price by increasing dividends?
Probably not. Investors like companies to spend their money logically. If the company decides to increase its dividend for no other reason than to try to get the stock price up, it will probably go down.If a company wants to increase its stock price by spending money, the best way is to invest in technology of some sort. Investors know technology investments will eventually make the company more money, which will trickle down to the dividend at some point in time.
What kind of investors are risk - seeking investors?
These are the investors who are ready to take a risk of losing their capital while making investors. You can consider stock market investors as risk seeking investors because there is no guarantee of our money in the stock market. There is always a risk of losing our capital in our stock market and hence it is a risky investment.
The price of Kroger stock will rise if?
if the demand for Kroger stock falls
What was the danger of the stock speculation?
stock prices would decline and investors would lose money
What was the dangerous stock speculation?
stock prices would decline and investors would lose money
What do investors do?
Invest or let companies borrow money from you for exchange for stock.
What did investors buy when they lacked the money to continue purchasing stock?
farm
How much money do stock investors make in a year?
The amount of money made by stock investors depends on how much they have invested and how much gain they receive from these stocks. Also how much dividends their stocks give.
Investors who pooled money to put together a voyage?
Joint stock company
How can the Great Depression be traced to American investment in the stock market?
Investors borrowed money to buy rising stocks, but could not pay it back once the stock prices fell.
What does a company's stock price say about that company?
A company's stock price can show the following:The confidence and trust investors have on this companyThe profit making history of the companyThe probabilities of reaping capital appreciation on this stocketcRoughly: The higher a stocks price in the market when compared to its face value, the greater investors confidence in it.
