Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 3

Given that a wealth of data compiled by market analysts demonstrates that, over the long run, stock prices follow corporate earnings, which piece of information would you find more important when deciding whether to buy or sell Quaker stock: (a) forecasts relating to the company's total debt-to-total capitalization ratio or (b) forecasts relating to the company's real earnings growth?