Explanation:
The divergence increases when economic growth from non-listed firms rises.
Reasoning:
Example: If private companies, startups, or state-owned enterprises experience strong growth while listed companies grow more slowly, the stock market will underperform the overall economy.
All else being equal, as economic growth from firms not listed on the stock market increases, divergence between total economic growth and the earnings growth of listed companies:
A
decreases.
B
remains unchanged.
C
increases.
No comments yet.