Reference no: EM133441002

Question: The pricing of an organization's securities is a crucial benchmark because these prices are used to estimate the returns investors demand and expect, and consequently the costs organizations incur when attracting capital.

The equity markets were not kind in early 2016, but rebounded following the November 2016 US Presidential Election. The major indexes are now at record levels. Please comment on the fundamental factors that you believe influence the price of your organization's stock and its recent performance. Theoretically, stock prices are influenced by expectations about earnings and future prospects. But they are also heavily influenced by investors' required rates of return, which include all kinds of market-wide considerations and pressures including attitudes about risk.

Have you participated in, or are you are aware of any managerial or executive suite discussions about your organization's stock performance? Have you participated in or provided information for a shareholders' annual meeting? Is your compensation or that of executive management linked to stock performance in any way? In addition to these suggested connections between market performance and current and prospective operations and strategy, are you aware of any other strategic connections in your organization such as expansion or targeted markets?

Those of you who are associated with NPOs, governmental organizations, or private firms will not be able to address these questions directly. But you can reflect on how you participate in accountability and performance-reporting to your organization's important stakeholders and how your own compensation might be linked to organizational performance. Also choose a publically traded firm (maybe one whose stock you own directly or indirectly) and comment on the factors that you believe have influenced that firm's stock price and recent performance.