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Cisco, an IT company, has announced a plan to invest in a new factory, and on the same day, the company's stock price jumped up by 1%.
(1) Describe a situation where this increase of the stock price may be interpreted as indicating that investors view the new plan as a bad idea.
(2) If the company's stock price went down by 1% on the day the plan was announced.Describe a situation where this decrease of the stock price may be interpreted as indicating that investors view the new plan as a good idea.
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Consolidated Enterprises issues €10 million face value, five-year bonds with a coupon rate of 6.50 percent. At the time of issuance, the market interest rate is 6.0 percent. Using the effective interest rate method of amortization, the carrying value..
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