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Free Case Study Example Provided by Proffessionals "MCI Communications Corp Case Study"
Definition of the Problem and Analysis
The problem with the MCI Corporation is the poor performance of its stocks in the stock market. This is portrayed by the stock prices which are performing poorly and their prices are going down. This shows that the value of the company is also going down. This has led to loss of investors’ confidence in the company shares. When the investors’ loses confidence in the shares of a company the demand of its stocks in market goes down. Due to the law of demand and supply in any perfect market this low demand of MCI stocks has forced the share price to go down.
This problem is making the shareholders feel uncomfortable with their investment as they feel as if they are losing part of their investment. The poor performance has also led to reduced returns of the shareholders investment. This is because the company has resulted to paying low dividends as compared to other competing companies in the same business. The problem of share holders losing confidence in the future returns of the MCI Company may cause them to off-load the shares the company hold in the market to avoid any further risk. Incase such a scenario happens in market the company stocks are likely to go down further which will have further negative impact to the companies market performance...
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