Question

Are there times in the year when we expect the company to do better than others?...

Are there times in the year when we expect the company to do better than others? If the company's success was expected, will it impact the stock price? Why?

Homework Answers

Answer #1

A company may do better in times which matches is seasonal Trend. This would depend upon the seasonal demand for the products of the company. So if the demand is higher in say winters the company will be able to reap higher profits during this time.

If the company success is expected it will increase the stock price. This is because the stock price represents the intrinsic value of the business which is calculated as per the free cash flows or dividends of the business. As the company is expected to succeed its free cash flows will increase and this will increase its stock price.

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