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  • Kitrel Muipon

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    Jeo Adrian Ling
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    The group decided to hold onto stocks of companies that had set capital expenditure plans for the year because large capital budgets that fund long-term investments can boost a company's profitability and market position over many years. While capital investments are irreversible and faults can hurt a company until dissolution, planned expansions from the companies' capex budgets were expected to yield higher stock returns through increased growth and market strength.

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    The group decided to hold onto stocks of companies that had set capital expenditure plans for the year because large capital budgets that fund long-term investments can boost a company's profitability and market position over many years. While capital investments are irreversible and faults can hurt a company until dissolution, planned expansions from the companies' capex budgets were expected to yield higher stock returns through increased growth and market strength.

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    17 views1 page

    Kitrel Muipon

    Uploaded by

    Jeo Adrian Ling
    The group decided to hold onto stocks of companies that had set capital expenditure plans for the year because large capital budgets that fund long-term investments can boost a company's profitability and market position over many years. While capital investments are irreversible and faults can hurt a company until dissolution, planned expansions from the companies' capex budgets were expected to yield higher stock returns through increased growth and market strength.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    With each of the company’s CapEx plans set for the year, the group thought it would be

    wise to witness how the year would unfold, thus, the group held onto these stocks. Capital
    budgeting is important for a company because a sizable volume of money is at stake, affecting
    the company's profitability. Once a long-term investment is made, it cannot be undone without a
    significant capital loss. The investment gets sunk, and faults frequently cannot be fixed until the
    company's dissolution. For many years, it will affect the way business is conducted. On the other
    hand, capital expenditures (CapEx) are costs that often yield long-term benefits to a company.
    Due to the planned expansions and investments on expenditures set for the aforementioned
    companies, the group believed that the prospect of the company’s growth and position in the
    market would yield a higher return. As far as finance is concerned, the greater the capex budget,
    the higher the expected value of a stock should be.

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