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Many possible reasons, a few of which are: 1) Negative outlook for that sector, thus market believes increases are anomalous, 2) Company is taking on new debts, 3) Company is not reinvesting those profits in a way which will promote eventual growth 4) Increased profit created by a one time deal/ or created by some means which is considered unsustainable...
Short term profitability changes do not drive long term value of shares. If overall value or growth potential of a company are not seen by the market to be increased, even with the occurrence of a recent increase of profitability, share prices will not rise! Remember, the price of a stock is based primarily on PEOPLE's subjective opinion, or what they are willing to buy/sell it for. So if people perceive that a company will begin to/continue to struggle, in spite of recent increases in profitability, there will be few buyers to support the price of that company's stock. A company might be increasing profits while at the same time fire-selling its assets, and thus the asset value of the company is decreasing. Profit increases/decreases are a small part of the overall picture!
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Does a reduction in share price decrease company profit?
No, a reduction in a company's share price has no effect on the company's profits.
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
Does share capital change when bonus share issued?
When bonus shares are issued share capital also change as amount from retained earnings or reserves is utilized to issue bonus shares and it increase the share capital while decrease the reserves or retained earnings.
What are the difference between equity share capital and preference shares capital and examples?
Preference share capital is type of capital which has preference on other type of share capital as preference share capital may have more profit ratio than other and it is paid first from profit of company and preference share holders get there share even if company has earn no profit. Equity share capital is share capital on which share holders get share from profit in the last after paying every other obligation on company. Detail answer available in related link.
How can the price of a company's share be less than the face value of the share?
How can the price of a company's share be less than the face value of the share?" How can the price of a company's share be less than the face value of the share?"
Does a reduction in share price decrease company profit?
No, a reduction in a company's share price has no effect on the company's profits.
Why the objectives increase profit by 10 percent and increase market share by 5 percent may be difficult to achieve at the same time?
Simply because - increasing the price to gain the 10% profit gain is easy. Selling goods at the inflated price may price you out of the market - thus you would fail to increase your market share. Customers will always want value for money !
When a firm is maximizing profit what else will it maximize?
When a firm maximizes its profit, it automatically maximizes its shareholder value. When both profit and the shareholder value increase, in course of time, the overall firm value will increase. All these would undoubtely increase its share price in the market as well.
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.
Can a company increase its share capital with its own profit?
No
Wealth maximization is a function of share price maximization discuss?
the difference between Profit maximisation and share price maximisation
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
What leads to an increase in the price of a companies stock?
Typical reasons include an increase in the company's earnings, or in the value of its holdings, or its percentage of market share for its products. Stock price increases when there is a demand for the stock (buying) and will usually decrease if there is less demand (net selling).
What can lead to an increase in the price of a company's stock?
Typical reasons include an increase in the company's earnings, or in the value of its holdings, or its percentage of market share for its products. Stock price increases when there is a demand for the stock (buying) and will usually decrease if there is less demand (net selling).
What is the definition of percent of increase?
Percent of increase is the product of changes in price over the original price with 100%. That is:percent increase = (changes in price/original price) x 100%.For example:In a year period, the price of a stock increased from 50 dollars a share to 59 dollars a share. To find the percent of increase in the share price, compare the change in price to the original price:percent increase = (changes in price/original price) x 100%.= (59 dollars - 50 dollars)/50 dollars x 100%= 18%
Will be increase or decrease suzlon energy share?
i guess it won't be increase . it will be in same state for coming 6 month
Define profit based organization?
These are the organizations, whose primary goal is to increase their profit margin. These organizations try to increase the value of their share by increasing the value of the company stock.
