Question

In late 2009, you purchased the common stock of a company that has reported significant earnings increases in nearly every quarter since your purchase. The price of the stock increased from $12 a share at the time of the purchase to a current level of $45. Notwithstanding the success of the company, competitors are gaining much strength. Further, your analysis indicates that the stock may be overpriced based on your projection of future earnings growth. Your analysis, however, was the same one year ago and the earnings have continued to increase. Actions that you might take range from an outright sale of the stock (and the payments of capital gains tax) to a straight holding action. You reflect on these choices as well as other actions that could be taken. Describe the various actions that you might take and their implications.


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  • CreatedMarch 27, 2015
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