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A recently story about a large public U.S. corporation that also recently reported and financial loss....

A recently story about a large public U.S. corporation that also recently reported and financial loss.

-How did the stock market react to the news.

-Would the financial loss affect the Yield. If, so why and how.

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Answer #1

The stock market will react to this news by punishing the stock, which would lead to a drop in the share prices of this public corporation.

Yes, the financial loss will affect the yield, the owners of this corporation will have to higher yield to the investors in the company.

As, the business has suffered a financial loss, the investors in this company will demand for a higher yield for investing into the stock of this company. As uncertainty and risk of default has risen for the investors, investing into this company.

A higher yield has to be offered to the investors.

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