The Relationship Between Stock Price and Corporate Earnings.
This brief study looks at the relationship between earnings and stock prices. It concludes that, despite short-term shifts in stock prices, earnings are the key indicators of longer term stock performance. Earnings are linked to the perceived value of a company and are therefore critical components in investors' decisions to purchase or sell stocks. The earnings, however, do not necessarily have to be present earnings. As is the case with new economy companies, value is based almost solely on future earnings (in some cases very distant future earnings). 6 pgs. Bibliography lists 3 sources.
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