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16 May, 03:07

Company X is expected to earn $2.25 per share this quarter. Last quarter they earned $2.50 per share, and a year ago their earnings were $3.00 per share. Before the market opened this morning, they announced earnings of $2.30 per share. If there is no other news about this stock, and leaving out what the market as a whole is expected to do today, what should happen to the price of the stock when the market opens.

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  1. 16 May, 05:44
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    Price of the stock will go up

    Explanation:

    In order to predict future movements of stock prices, analysts use reported quarterly earnings, usually in the forms of earnings per share. However, analyst's estimation is only opinion, that may differ from what would really happen. If company's earnings exceed their own estimations, as in this case, we could expect stock value to rise. However, in the case where actual earnings are a bit lower than projected ones, the price of the stock will drop.
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Home » Business » Company X is expected to earn $2.25 per share this quarter. Last quarter they earned $2.50 per share, and a year ago their earnings were $3.00 per share. Before the market opened this morning, they announced earnings of $2.30 per share.
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