Suppose You Own 100 Shares of Apple Stock Which You

question 40

Essay

Suppose you own 100 shares of Apple stock which you intend to sell today.Since you will sell it in the secondary market,Apple will receive no direct cash flows as a consequence of your sale.Why,then,should Apple's management care about the price you get for your shares?

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Definitions:

Noneconomic Damages

Compensation awarded in a lawsuit for losses that do not have a direct monetary value, such as pain and suffering, loss of companionship, or emotional distress.

Negligence

The failure to take reasonable care to avoid causing injury or loss to another person, resulting in legal liability.

Disclaimer

A term in a contract whereby a party attempts to relieve itself of some potential liability associated with the contract. The most common example is the seller’s attempt to disclaim liability for defects in goods that it sells.

Recovery

The act of obtaining something of value through legal means, often in compensation for damages or loss.