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Signal Cable Company

Case 1: Signal cable company 1. Why has the stock price fallen despite the fact that the net income has increased? Ans: The stock price for Signal Cable company could have fallen for a variety of reasons. Stock price is influenced by the performance of the company, investor expectations as well as general market/economic conditions. In the case of Signal, it is clear that the stock price fell despite an increase in the net income. This could be possibly because the company might have made incorrect investment decisions by investing in two manufacturing plants as well tying up more money in inventory. Shareholders may not be happy with this decision and consequently the demand for the stock may have decreased…