If the Expected Future Earnings of a Company Goes Up

question 158

Multiple Choice

If the expected future earnings of a company goes up, you would expect the price of its stock to

• A) rise.
• B) fall.
• C) be unaffected.
• D) fall to zero.

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Definitions:

Connector Division

A specialized department within a company focused on the production or distribution of connector components for various applications.

Idle Capacity

The portion of a company's resources or production capability that is not being used to generate revenue or output.

Transfer Price

The price at which goods and services are sold between units of the same company.

Pump Division

A sector within a company that specializes in the production, sales, or maintenance of pumps.