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American Airlines (AMR Corporation) - Research Paper Example
Author : dereckhermiston
Finance & Accounting
Pages 5 (1255 words)
American Airlines (AMR Corporation) Instructor Date American Airlines (AMR Corporation) 1 Stock trading has become one of the foremost enterprising projects in the business world today, and as a result, there is a lot of gains that can be made from trading in stocks of public companies (DePamphilis, 2009)…
This is because the business of stock trade holds no assurances and one has the potential to either enjoy large amounts of profit from their trades or suffer huge amounts of loss as well if things do go as expected (DePamphilis, 2009). The public companies whose shares are involved in this trade are able to profit as well in terms of stock value, which has the potential to raise the value of their company in general. This is to say that, the higher the price of their stock, the higher the value of the company. Due to this relation, senior management in such companies tends to focus on stock prices and ways that they can be increased on the market in the short term so as to raise the value of the company. This can read to unethical behavior as a result as the management may be tempted to trick individuals into thinking that their stock is worth more than it is in actuality (Sandage, 2006). The increase in the value of stock leads to an increase in demand for the stock which in turn raises the value of the stock even higher and it is this co relation that may tempt senior management to tamper with realistic value of their stock so as to cause a rise in demand which will in effect actually raise the value of the stock as a result. ...