Question

Of the following factors influenced by managers that affect stock price, which one is incorrect? a....

Of the following factors influenced by managers that affect stock price, which one is incorrect?

a. Dividend policy

b. Projected cash flows, as well as any associated risk

c. Timing of cash flow streams

d. Executive compensation

e. Use of debt or capital structure

Homework Answers

Answer #1

Answer is c) Timing of cash flow streams

Dividend policy affects the stock price based on Dividend yield. Executive compensation does have a bearing on affecting the stock price. A company led well by executives will see its price going up. Projected cash follow affect the profitability and hence have a bearing on share price. Use of debt or capital structure affects the share price based on the proportion of usage and its financial leverage impact on Earnings per share

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