Why is it important for a corporation to maintain the confidence of the stockholder?
Date Submitted: 09/10/2006 02:21:55
Category: / Science & Technology / Transportation
Length: 2 pages (470 words)
Category: / Science & Technology / Transportation
Length: 2 pages (470 words)
Retaining the confidence of the stockholders is important in the effect that the market
value of the stock has on the corporation. Stock and the value of the corporate stock
does not necessarily provide the corporation with income. It provides the corporation
with capital. In turn, Capital becomes cash and collateral. The better the market value
of the stock, because of high stockholder cofidence, the more a corporation is able to
barter and trade in …
Is this Essay helpful? Join now to read this particular paper
and access over 480,000 just like this GET BETTER GRADES
and access over 480,000 just like this GET BETTER GRADES
…I think that when shareholders lose confidence and stock prices
drop then the ability to raise capital declines. Stock prices drop, the
amount of money they can borrow decreases, interest rates increase. The
general public tends to lose confidence in the company also. When the
general public loses confidence in the product or the service a
corporation is providing business slows down, revenue decreases, layoffs
happen. The ability to stay in business becomes increasingly harder.
Need a custom written paper? Let our professional writers save your time.