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What Most Likely Happened to the Stock for Apple Because

question 171

Essay

What most likely happened to the stock for Apple because of the iPhone and iPad? Explain using a demand and supply graph.


Definitions:

Cost of Capital

The rate of return that a company must earn on its project investments to maintain its market value and attract funds.

Dividend Irrelevance Theory

The Dividend Irrelevance Theory posits that a company's dividend policy does not affect its market value or shareholders' wealth in perfect markets.

Basic Earning Power

A measure of a company's operating profitability relative to its assets; calculated as EBIT (Earnings Before Interest and Taxes) divided by total assets.

Business Risk

The exposure a company or investor faces due to uncertainties in the market or failures in executing its operational strategies, affecting its profitability.

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