Why Is the Stock Price of a Company an Indication

question 82

Multiple Choice

Why is the stock price of a company an indication of the performance of that company's senior managers?

• A)Well-run companies are invariably highly profitable,which leads to a higher share price.
• B)In general,people want to invest in a well-managed corporation,which will drive up the price of shares.
• C)Investors who can see that a company is well-run will hold on to their shares,even if the company faces temporary set-backs,since they know that the stock price will likely rise again.
• D)Larger companies tend to be better run and so have higher stock prices.

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Definitions:

Humane Treatment

The act of showing compassion and consideration, ensuring the welfare of others, especially in the care and treatment of animals and people.

Comanche

A Native American tribe historically known for their horse culture and prowess in the plains area of what is now the United States.

Freedom of the Press

The right of media to publish content without censorship or restraint by the government.