Corporations during the stock market crash of 1929 and later depression?
November 29, 2011 by tuwall
Filed under Other - Business & Finance
B asked:
Question for history class:
Many corporations survived the stock market crash of 1929 but failed during the ensuing depression. Explain how this could happen.
Question for history class:
Many corporations survived the stock market crash of 1929 but failed during the ensuing depression. Explain how this could happen.
I realize how they failed during the depression, but not exactly how they survived the stock market crash. Thanks for any help!
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Do your own research please.
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The biggest reason companies didn’t fail when the market crashed is that stock price has nothing to do with company success.
So just because a stock price falls by 70% does not mean that sales fell by 70%. During every market downturn some companies have falling stock prices in the face of rising sales. The depression is particularly acute because the lofty stock prices seen prior to the crash were due to speculation and low margin requirements, not due to economic performance.