Stock prices reflect the expected size,risk,and timing of future cash flow of the company.

Question

Quizplus · Accepted Answer

Stock prices are affected by various factors, including the performance and financial health of the company, market trends and conditions, and investor sentiment. However, the primary driver of stock prices is the expected size, risk, and timing of future cash flow of the company. Investors buy and sell stocks based on their assessment of the company's ability to generate revenue, earnings, and cash flow in the future. Therefore, stock prices reflect the market's expectation of the company's future prospects.

Stock Prices Reflect the Expected Size,risk,and Timing of Future Cash