When the stock price decreases, it can have negative effects on the company's market capitalization, liquidity, and
Question:
When the stock price decreases, it can have negative effects on the company's market capitalization, liquidity, and overall financial health. Additionally, it can also make the company more vulnerable to hostile takeovers by competitors and investors.
A decrease in market capitalization can limit the company's ability to raise money and finance its growth, and lower stock prices can result in fewer investors buying the company's stock, leading to a decrease in stock liquidity. This can make it difficult for the company to raise capital and for investors to buy and sell shares.
Furthermore, lower stock prices can also make the company more vulnerable to hostile takeovers by competitors and investors, putting the company's long-term interests at risk and putting the decisions on how to run the company in the hands of the new owners.
How can a company protect itself from hostile takeovers when the stock price is low?
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr