Q

UESTION

 From the e-Activity, determine whether stock prices are affected more by long-term or short-term performance.

From the e-Activity, determine whether stock prices are affected more by long-term or short-term performance. Provide one (1) example of the effect that supports your claim.

From the scenario, value a share of TFC’s stock using a growth model method and compare that value to the current trading price of a share of TFC. Determine whether the stock is undervalued or overvalued. Provide a rationale for your response.


A

NSWER


   No. Of Words: 455
   Pages 1.82
   Type: Essay
   Price: $5.00

Stock prices

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Stock Prices

Determine whexxxxxxr stock prices xxxxxx xxxxxxed xxxxxx by xxxxxx-term or short-term perxxxxxxmance.

Stock prices xxxxxx xxxxxxed by xxxxxx xxxxxxces of demxxxxxx xxxxxx supply. xxxxxx xxxxxx xxxxxxed xxxxxx by xxxxxx term perxxxxxxmance of xxxxxx business xxxxxx xxxxxx short term perxxxxxxmance (Ziemba & Gregory, 2007). Txxxxxx is because xxxxxx short term price swings xxxxxx as economic climate, rumors xxxxxx news tend to get smooxxxxxxned with xxxxxxe xxxxxx become less important in xxxxxx stock market in xxxxxx xxxxxx run. Long term stock prices xxxxxx thus driven by xxxxxx earnings of xxxxxx company xxxxxx xxxxxx growth. If xxxxxx company is earning xxxxxx, it xxxxxx attract xxxxxx investors to xxxxxx with it thus xxxxxxreasing xxxxxx stock prices.

xxxxxx xxxxxx scenario, value a shxxxxxx of TFC’s stock xxxxxx a growth model method xxxxxx compxxxxxx xxxxxx value to xxxxxx current trading price of a shxxxxxx of TFC.

Growth model method is used to calculate xxxxxx value of xxxxxx stock of a company without xxxxxxing xxxxxx current market conditions. It assumes a constant growth xxxxxx xxxxxx it’s thus