Why Is the Stock Price of a Company an Indication

question 57

Multiple Choice

Why is the stock price of a company an indication of the performance of the 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 setbacks, 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:

Competence

The ability of an individual to effectively perform a task or role to a specified standard or expectation.

Impact

The effect or influence that an action, event, or decision has on something or someone.

Empowering Leadership

A leadership style focused on providing team members with autonomy, resources, and support to make decisions and foster their personal and professional growth.

Service Performance Behaviours

Actions and behaviors exhibited by employees that directly impact the quality of service delivered to customers.