Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 31, Problem 11E
To determine
To explain:
The reason for decline in stock prices and the reason for increase in the stock prices again.
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What happens to interest rates in the market if the stock brokerage commission declines? Explain the reason for your answer!
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Suppose that the initial dividend on a stock is £1. The interest rate is 3 percent and the growth rate of dividends is constant at 2 percent. What is the price of the stock?
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- Explain briefly why stock prices are a leading economic indicator.arrow_forwardA company has announced a profit, but why is the price of stock still falling? Is the market inefficient? Explain.arrow_forwardwhy do stock prices constantly change? Doesn’t this go against the law of supply and demand?arrow_forward
- Give your opinion on the current situation of stock market right now. Would it be profitable to invest in stocks?arrow_forwardWhy might a company’s stock price fall after record earnings are announced? Conversely, why might the stock price increase after losses are disclosed?arrow_forwardWe have had similar reductions in stock prices to those in 1929 before and after the Great Depression. What historical events took place that directly led to the prolonged depressed conditions like those of the 1930s?arrow_forward
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