It is crucial that firms evaluate the impact of their decisions on stock prices, as it can ensure shareholder wealth over time. This will allow organisations to make better decisions when it comes to selecting investments and taking on obligations, increasing the chances that they’ll achieve positive long-term returns.
Additionally, examining stock prices also helps provide an indication of a company’s overall performance which in turn gives investors greater insight into where their money is going & whether or not further adjustments/changes need to be made in order to improve results.
It is important to evaluate all financial decisions in terms of their effect on the stock price. This allows organizations to better utilize their resources and keeps stakeholders updated on progress.