Would a company’s share price benefit from having fewer traders and more fundamental investors among the company’s shareholders?
Answer to relevant QuestionsFollowing the investor model presented in this chapter, what returns do noise traders make on their investments in the long term: negative returns, returns around zero, or positive returns? What returns do fundamental ...Assuming that fundamental investors ultimately set a company’s share price, name two reasons why you could still expect the price to show significant volatility. Should a company operate a diversified portfolio of businesses? What are the arguments for and against? What are the pros and cons of measuring the success or failure of an acquisition by immediate stock price reactions to its announcement? When is this approach most likely to provide insights? A company intends to sell one if its larger business units to a strategic buyer. The company’s controller is concerned because the sale would result in overcapacity of 25 percent in the company’s information technology ...
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