Answered

Discover the best answers at Westonci.ca, where experts share their insights and knowledge with you. Our Q&A platform offers a seamless experience for finding reliable answers from experts in various disciplines. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.

2. Why might it be a plus for a company to have such a high share price that trading in its stock is discouraged? What drawbacks might there be for a company in this situation?

Sagot :

anthougo

While a high share price discourages trading in the company's stock, it advertises the company's stellar performance to existing and potential investors.

 

A high share price also discourages corporate takeovers, assuring the jobs of senior management. Existing investors can realize some quick gains by selling their shares at high profits.

 

2. The drawback of having a high share price is that investors willing to sell off their shares cannot do so because potential buyers are discouraged. Another disadvantage is that it puts much pressure on the management to maintain the entrenched performance level. Any subsequent fall in prices will not meet favorable reviews.

 

Thus, there are pluses and minuses to having a high share price.

Learn more: https://brainly.com/question/19717466

Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.