If you were an investor, what are your expected impacts of the announcement (the appointment of...

If you were an investor, what are your expected impacts of the announcement (the appointment of new CFO) on the share price (up or down, good news-bad news) and justify your arguments.

Expert Solution

ANSWER DOWN BELOW. FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

It mainly depends on 3 factors:

1. The track record & background of the CFO.

2. The Industry which the company belongs to.

3. Why did the old CFO resign?

1. If the track record & background of the CFO is excellent. He is bringing a lot of experience & connections to the company's table. Then it's a good sign & stock price will go up.

2. If the company is in the banking sector, then usually it will go down because the new CFO will be making, the old NPA which were hidden by the old CFO, public.

Because he doesn't want to take responsibility for that old bad loans.

The share will go down & it's a bad sign.

In the case of FMCG, Pharma sector there is the minimal impact of the Industry factor.

3. If the old CFO was forcefully removed or resigned due to unreasonable reasons then Share will go down & it's a bad sign.

If it is due to age or health issues or statutory requirements then there is a neutral reaction.

jeff jeffy answered 2 years ago

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