How are cash flows and the firms stock price related?
In an ideal world, the value placed on a shares value is the current value of all future dividends issues. The greater a firms cash flow, the higher you would expect the dividend to be.
Not living in the real world, and not having a crystal ball, the actual share price is determined more by market sentiment and speculation.
Thus, there is often no real relationship between a firms cash flow, and its stock price.
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