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If you were a financial manager, would you focus on improving the company's stock market value or its intrinsic value? Explain your choice.

Sagot :

Answer:

It would be best to focus on improving the company's market value. Market value is determined by supply and demand. The price of a stock reflects the current demand for it. If there is a strong demand from investors for a particular stock, its market price will rise above its book value.

Explanation:

The goal for any investor is to buy low and sell high. If an investor believes that a stock can very likely be sold in the future for a higher price than its current market price, it may well be an excellent investment, regardless of the company's current intrinsic value.