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Why is the goal of financial management to maximiize the current share price of the company's stock in other words why isn't the goal to maximize the future share price?
Maximizing the current share price is the same as maximizing the future share price at any future period. The value of a share of stock depends on all of the future cash flows of company. Another way to look at this is that, barring large cash payments to shareholders, the expected price of the stock must be higher in the future than it is today. Who would buy a stock for $100 today when the share price in one year is expected to be $80?
How do you purchase a portion of a company?
If the corporation is listed on the stock exchanges, then buying shares using a stock broker is the easiest way. If the company is private or closely held, then one must negotiate with the owners of the company and agree on a number of shares and a price.
What is the required amount of earnest money that must be included with the offer?
The required amount of earnest money that must be included with the offer is typically around 1-3 of the purchase price of the property.
What are the terms and conditions of an ESPP loan?
The terms and conditions of an Employee Stock Purchase Plan (ESPP) loan typically include the interest rate, repayment schedule, and any other specific requirements set by the company offering the loan. Borrowers must adhere to these terms to access funds for purchasing company stock at a discounted price through the ESPP.
What is the process for increasing authorized shares for a company?
Increasing authorized shares for a company involves a formal process where the company's board of directors must approve the decision to increase the number of shares that the company is allowed to issue. This typically requires an amendment to the company's articles of incorporation, which must be filed with the appropriate government agency. Shareholders may also need to vote on the proposed increase in authorized shares.
What is accounts receivables factoring?
Accounts receivable factoring is a transaction by which a business sells their invoices to another company at a discounted price. It must be taken into consideration that this transaction is not a loan.
What is the difference between sales price and purchase price?
Purchase price is what the employee time costs the company to provide the service. Hourly rate plus all costs to you for that employee.Sales price is what you charge the customer for that employee time.EX.Company X buy material 1001 from Company Y.SO I must maintain a Purchase contract of material 1001 of Company X, supplier is Company Y.Meanwhile, I have to maintain a Sale Price list of material 1001 of Company Y, customer is Company X.
What is a corporate credit score and how does it affect the stock price?
In order to invest in good credit score. You must look onto the security, and company that you are willing to trade within order to obtain a credit score of another business you must be willing to look into other peoples credit score, so you wont risk your own self and your company.
What do you call a company that owns another company?
A company that owns another is a Parent Company, while the one that is owned by another is a Subsidiary. The Subsidiary may be fully owned or partly owned. To qualify as a Subsidiary, the Parent must hold at least 25% of the shares of the Subsidiary.
What is price setter?
A price setter is a company or entity that has the ability to influence the price of its products or services in the market, typically due to a strong brand, unique offerings, or limited competition. Unlike price takers, which must accept market prices, price setters can adjust their prices based on demand, costs, and competition. This pricing power allows them to maximize profits and maintain market share. Examples include monopolies or firms in oligopolistic markets.
What are share prices when using stocks?
Share prices are also known as stock prices. It is the single price for a number of company stocks. To be qualified for NASDAQ, the stock price must be at $1.
Why is the goal of financial management to maximiize the current share price of the company's stock in other words why isn't the goal to maximize the future share price?
Maximizing the current share price is the same as maximizing the future share price at any future period. The value of a share of stock depends on all of the future cash flows of company. Another way to look at this is that, barring large cash payments to shareholders, the expected price of the stock must be higher in the future than it is today. Who would buy a stock for $100 today when the share price in one year is expected to be $80?
What happens to price of stocks when a corporation reduces authorized amount of stocks?
I believe what you are referring to is when a corporation buys back it's own stock resulting in less authorized shares in the marketplace. This doesn't have a direct effect on a stocks price but can typically indirectly cause a stocks price to increase. The reason that it is not direct is that the company must spend it's own money to buy back the stock. This results in less shares and each shareholder now holds a larger stake in the company but the resulting company now either has less cash in it's reserves or has issued debt to pay for the stock. Indirectly this can help the price of the stock. The fact that a company is buying it's own stock back would indicate that the company feels it's own shares are a bargin at the current price. It also adds support to a stocks price in that if the price begins to fall due to market conditions the company can step in and buy shares to prevent or limit continued stock depreciation.
What price must a price ceiling be less than for it to result in a shortage?
It must be less than the equilibrium price.
A pharmaceutical company has a monopoly on a new medicine. Under pressure by regulators and consumers the company is considering lowering the price of the medicine by 10 percent. The company has hired?
a market research firm to analyze the potential impacts of this price reduction. The research indicates that lowering the price could increase accessibility for patients, potentially boosting overall sales volume. However, the firm also warns that the price cut may erode profit margins and set a precedent for future price negotiations. The company must weigh these factors carefully to determine the best course of action.
What is the time frame within which a company must honor a warranty?
A company must honor a warranty within the specified time frame outlined in the warranty agreement, which typically ranges from a few months to a few years after the purchase date.
How do you purchase a portion of a company?
If the corporation is listed on the stock exchanges, then buying shares using a stock broker is the easiest way. If the company is private or closely held, then one must negotiate with the owners of the company and agree on a number of shares and a price.
