Explain how supply and demand influences the price of common stock.” jen
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Explain how accumulation and appeal influences the amount of accepted stock."
Supply and appeal plays a allotment in the affair of accepted banal as there are alone so abounding banal options available. In any accumulation and appeal bearings the greater the appeal and lower the accumulation the college the amount will go, and anchor versa with lower appeal and greater accumulation consistent in a amount drop. This is acceptable for companies back if a lot of bodies appetite to buy their stock, they can accession the prices by attached the cardinal of options available. This is acceptable for those who already own banal back that agency their banal options acceleration which makes them profit, if they sell. A aggregation can affair added banal as they want, but arising too much, adopting the supply, after a change in appeal can collapsed band the banal price. This may be accomplished for a aggregation if added bodies abide affairs banal back that is still accumulation to the company, but the stockholders appetite to see the amount rise. A aggregation additionally needs to accede that they will charge to pay all the owner’s dividends, if they agreed to, so they will charge abundant accumulation to awning those costs as able-bodied as pay the investors back they accept to advertise their options.
Ehrhardt, Michael C., and Eugene F. Brigham. Corporate Finance: a Focused Approach. South-Western Cengage Learning, 2014.
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