• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

June 2025 ACCA Exam Results

Comments & Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for June 2025 exams.
Get your discount code >>

General Stock market issues? e.g in Marengo December 2010

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › General Stock market issues? e.g in Marengo December 2010

  • This topic has 3 replies, 2 voices, and was last updated 11 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • April 18, 2014 at 7:11 pm #165605
    sameed
    Member
    • Topics: 40
    • Replies: 97
    • ☆☆

    Hi John, I read in the answer of the aforementioned question that if a company sells off a large block of shares at once it’ll drive down it’s share price? Why is that?

    Secondly it also was written in the answer, that the volatility of earnings can have an Impact on shareprice, can you also please briefly explain this aswell?

    And thirdly I am confused as to what signalling effect does issuing new equity has? Is it good or bad, what will be effect on share price, I mean don’t the investors and markets will think that company might be in difficulties hence it’s raising finance?

    cheers.

    April 18, 2014 at 10:18 pm #165613
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54704
    • ☆☆☆☆☆

    1 the stock market is like any ordinary market. If more people are buying than there are people selling, the the dealers put the prices up to persuade more people to sell. Similarly, if more are selling than buying, then the dealers mark the prices down to persuade more people to buy.

    2 the price people pay for shares is partly determined by the dividends they expect. The more uncertain the earnings are, then the more uncertain the dividends are in the future, and so they will not be prepared to pay as much.

    3 the signalling effect can be good or bad. If investors think it is because the company is desperate than it would indeed push the share price down. However they are more likely to think that the company is going to expand and do better – this would push the price up. (A company would not normally issue new shares because the were desperate because the issue would be likely to fail – who would buy new shares in a company that was likely to be going bankrupt?)

    April 18, 2014 at 10:21 pm #165614
    sameed
    Member
    • Topics: 40
    • Replies: 97
    • ☆☆

    Ok thanks a lot

    April 19, 2014 at 7:30 am #165631
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54704
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • verweijlisa on Financial performance – Example 2 – ACCA Financial Reporting (FR)
  • John Moffat on Linear Programming – Spare capacity and Shadow prices – ACCA Performance Management (PM)
  • John Moffat on The Statement of Financial Position and Income Statement (part d)
  • Salexy on Linear Programming – Spare capacity and Shadow prices – ACCA Performance Management (PM)
  • omerbasheer on The Statement of Financial Position and Income Statement (part d)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in