Little Rishi

.....a blog about personal finance, motivational stories, deals, and special offers

Web Domain Registration
Go Daddy $12.99 Turbo SSL Sale!
Trusted by over 7 million customers!
Saturday, May 1, 2010
Weekend Quote from a Book - Utility Stock Prices and Interest Rates
There are several reasons for the interdependence between utility stock prices and interest rates. First, owing to their customarily high dividend yield, utility stocks are often treated as substitute for bonds, whose price fluctuations are almost totally dependent on interest rate changes. Second, most utilities have large amounts of debt in their capital structure, on which they must pay interest. The amounts of such payments are critical to their profitability. Third, the utilities are dependent on easy availability of funds in the capital markets to finance the expansion on which theyir long term profitability depends. Given this dependence of all stock valuation on interest rates, it is not surprising that utility stocks frequently change trend ahead of the general market.

Source: Stock Market Logic

by Norman G. Fosback

Please also see Disclosures and Disclaimer

Labels: , , , ,

posted by Little Rishi @ Saturday, May 01, 2010  
Post a Comment
<< Home

See important Disclosure and Disclaimer

Favorite Quote
"Work is worship".
                - Author Unknown
This site, including blog posts, may contain reviews, links, banners, text and other forms of advertisements for products, services, courses, and so forth of companies of which we may be an affiliate member or for which we may get paid for referrals. This site may also contain blog posts for which we are paid, as well as blog posts regarding products or services of companies from which we may have received complimentary products or services.
Reward Surveys/Panels/Shopping/Contests
Job Search site
Indeed Jobs
Yahoo! HotJobs - Job Postings
Credit Cards
Health: eHealthInsurance

Phone Service
Investing 120x120 Best Seller Giveaway
Find the perfect babysitter at
Previous Posts
Disclaimers, Privacy Policy, and Disclosures
  • Disclaimer

  • Privacy Policy

  • Disclosures
  • Subscribe to Blog Posts
    Add to Google Reader or 

    Bookmark this blog site
    Contact Me