Understanding Stock Price Movement

Abstract: A 12 page paper discussing growing instances of seeming inconsistencies between P/E ratios and stock value. The paper explores several possible reasons but concludes that it is the new economy most responsible for the phenomenon. While economists who should know better still need not proclaim the business cycle dead yet, this new economy does provide compelling evidence that accepted rules either already have been broken or are in the process. We are likely to continue to see some companies enjoy high price-to-earning ratios while the measure remains negligible for others. The result is that investors need to be more cognizant than ever before of the reasons possibly underlying aberrations in connections between stock price and earnings reports. Bibliography lists 13 sources.

Filename: KSstockPrice.wps

Pages: 12

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Catagory: Money & Banking / Corporate Finance

Subcatagory: Accounting & Personal Finance

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