The Value of a Stock Depends on the Ability of the Company

question 153

True/False

The value of a stock depends on the ability of the company to generate dividends and the expected price of the stock when the stockholder sells her shares.

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Definitions:

Infinitesimal Odds

Extremely small chances or probabilities of a specific event occurring.

Framing Effects

In prospect theory, changes in people’s decision making caused by new information that alters the context, or “frame of reference,” that they use to judge whether options are viewed as gains or losses relative to the status quo.

Specialty Shops

Retail businesses that focus on selling a particular type or category of product, offering a narrow but deep assortment of merchandise.

Big Box Stores

Large retail stores that offer a wide variety of goods and typically have a warehouse or warehouse-like design.