1. Analyze the trend in Nike’s stock prices over the …

Business Questions

1. Analyze the trend in Nike’s stock prices over the past year and the last five years. 2. Is Nike classified as a small, medium, or large-cap company? How do you determine this? 3. Company B’s stock price is $500. A classmate claims that Company B’s value is higher than Nike’s based on the stock price. What could be incorrect about this statement? 4. If you were considering purchasing a stock, which time frame would you choose to evaluate its price history (1-day, 5-day, 1-month, etc.)? Why?

Short Answer

Nike’s stock has shown consistent growth both in the short and long term, reflecting positive investor confidence. With a market capitalization over $10 billion, Nike is seen as a financially stable company, making it appealing for investment; however, evaluating stock prices alongside other financial metrics is essential for a complete understanding.

Step-by-Step Solution

Nike Stock Performance

The trend in Nike’s stock prices has seen a consistent increase over both short and long timeframes. Over the past year, stock prices have risen, indicating positive performance. Similarly, when looking at a broader timeframe of five years, Nike has maintained an upward trajectory, reflecting long-term growth and investor confidence.

Nike’s Market Capitalization

As a large-cap company, Nike holds a market capitalization exceeding $10 billion. This classification highlights the company’s financial stability and substantial market presence. Investors often consider such metrics when assessing the reliability and growth potential of a stock, making it an attractive option for investment.

Classmate’s Comparison & Analyzing Stock Prices

It’s crucial to recognize that stock price alone does not equate to a company’s overall value. Factors such as the number of outstanding shares, earnings, and financial health play significant roles. To make informed investment decisions, it’s advisable to analyze stock prices over a mid to long-term timeframe, ideally between 6 months and 1 year, for a comprehensive assessment of performance.

Related Concepts

Stock Performance

The evaluation of a company’s stock price trends over time, indicating how well the stock has performed in the market, reflecting investor confidence and market conditions.

Market Capitalization

The total market value of a company’s outstanding shares, calculated by multiplying the stock price by the total number of shares, indicating the company’s size and financial stability.

Investment Analysis

The process of evaluating various factors, including stock prices, earnings, and financial health, to make informed decisions about buying or selling stocks, often focusing on mid to long-term performance metrics.

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