answersLogoWhite

0

No, a reduction in a company's share price has no effect on the company's profits.

User Avatar

Wiki User

12y ago

What else can I help you with?

Continue Learning about Accounting
Related Questions

When is demand inelastic?

When a reduction in price results in a decrease in total revenue.


What is the impact of low profit margin on a company?

Means no expansion or further investment for the company because no cash is there, one more impact is the reputation of the company which could lead to decrease of the share price


Why does the gross profit increase when the value of closing stock increases?

It doesn't. Gross profit is the of a company is the profit it receives for the product or service produced after the cost of that service or product. It does not take into account any other expenses incurred by the company. Net profit takes this into consideration. Price of stock can increase or decrease the available money for a company to invest or use for generating income.


How can I profit from a decrease in the price of a stock by selling to open a put option?

You can profit from a decrease in the price of a stock by selling to open a put option because you receive a premium upfront for agreeing to buy the stock at a specific price in the future. If the stock price decreases below the agreed-upon price, you can buy the stock at the lower market price and then sell it at the higher agreed-upon price, making a profit.


What is likely to lead to a decrease in the price of a company's stock?

The price of a stock typically changes with demand for the stock, which results from the actions of buyers and sellers. Things that typically lead to a reduction in a company's stock price include: - a decrease in net profits - a loss of market share, or an increase for competitors - revaluation or loss of assets - loss of confidence in the company's leadership - failure of a key product, or failure to interest potential customers


What is the most likely to lead to a decrease in the price of a company?

Its annual profits decrease.


If a company raises its price for holidays over the equilibrium price the demand will decrease the supply?

decrease and the supply will increase.


What does 'jobber price' mean?

Jobber price is what one company would sell their goods to another retail company for. That company would then raise the price on that product and sell it for profit. Margins of profit when selling at jobber price is typically very low, think of it as a wholesale price.


How does the price of share is increased or decreased?

The fluctuation in price of shares stems from a company's profit or ability to earn profit. If profitability increases, then share price increases also.


What is most likely to lead to a decrease in the price of a company 's stock?

Its annual profits decrease.


How can one profit from a decrease in the price of a stock without actually owning the stock by buying put options?

By purchasing put options, an investor can profit from a decrease in the price of a stock without actually owning the stock. Put options give the holder the right to sell the stock at a specified price, allowing them to make a profit if the stock price falls below that price. This strategy is known as "shorting" the stock through options trading.


What is the difference between price off and discount?

Price off refers to a specific reduction in the price of a product, often expressed as a fixed amount (e.g., $10 off). A discount, on the other hand, usually refers to a percentage reduction from the original price, such as a 20% discount. While both terms indicate a decrease in price, "price off" specifies a set amount, while "discount" generally conveys a proportional reduction.