A firm's stock price most closely reflects which of the following?
A)Current interest rates
B)Expected risk,magnitude,and timing of future cash flows of the firm
C)The amount and maturity of debt held by the firm
D)current federal tax codes

Question

Quizplus · Accepted Answer

A firm's stock price is primarily based on the expected risk, magnitude, and timing of future cash flows of the firm. While current interest rates and the amount and maturity of debt held by the firm can affect the firm's financial performance, they do not have as direct of an impact on the stock price. Federal tax codes can have some impact on the firm's financial performance, but again, it is not as direct of an impact as the expected future cash flows.

A Firm's Stock Price Most Closely Reflects Which of the Following