Question

How might an issue (negative or positive) within the overall stock market impact the company’s stock valuation numbers, other financial variables, or its overall portfolio management? Be sure your response is supported by evidence.

Answer 1

Issue of the stock will be impacting the valuation of the company because issue of the stock will be meaning that there would be a large number of equity share into market and it will also mean that there would lower amount of Earning per share which will be reported by the firm and which would lead to a lower amount of valuation also.

It will also be discounted by shareholders that the company wants to add new share holders to this existing equity portfolio so they will be trying to be sceptical about the valuation of the company because they will be losing their control over the company.

A positive or negative issue if it is taken for an incidences, will be affecting the overall price of the company because company is a unit which is performing within the stock market and an issue within the stock market will be like a macro event which will be impacting the overall company and the valuation of the company will be adjusted accordingly at according to the beta and other factors which has correlated it with the market.

it can be seen in recent coronavirus crisis that a large number of companies has crashed because the stock market has crashed.