FIN 351 CHAPTER 6 QUIZ 16 TO 20
16. The crossover point on the life cycle curve is the point where companies sell stock in an initial public offering (IPO).
17. Stock prices increase as companies reach the crossover point, since the company's earnings are now more predictable
18. Stock prices plummet as industries move across the crossover point, because price-earnings ratios collapse as analysts lower growth expectations.
19. An industry reaches the maturity stage when its sales growth matches the rate of growth of the economy
20. The S&P 500 Index and Gross Domestic Product (GDP) seems to have similar long-term growth paths