User Account

All Pages

Semistrong-form of efficiency in the markets

Assignment Help Finance Basics
Reference no: EM131669426

Consider that there is a semistrong-form of efficiency in the markets.

A pharmaceutical company announces that it has received Federal Drug Administration approval for a new allergy drug that completely prevents hay fever. The consensus analyst forecast for the company's earnings per share (EPS) is $4.50, but insiders know that, with this new drug, earnings will increase and drive the EPS to $5.00. What will happen when the company releases its next earnings report?

A. The stock price will not change, because the market already incorporated that information in the stock price when the announcement was made.

B. There will be some volatility in the stock price when the earnings report is released; it is difficult to determine the impact on the stock price.

C. The stock price will increase and settle a new equilibrium level.

Reference no: EM131669426

Questions Cloud

Find the payback period : During Year 3 the firm will receive $3,510 which is greater than $1850. Assuming that cash flows will be received gradually during year 3, it takes $1850/$3510
What is the definition of marginal investor : What is the definition of marginal investor, nominees and non-marginal investor. Explain.
What is the expected profit of granting credit : Assuming that there is no possibility of repeat orders and that the probability of successful collection from the customer is p = 0.95, answer the following.
Describe the recommendations you would present to the client : Recommendation: Describe the recommendations you would present to the client. (Be sure to base your recommendations on the collected data.)
Semistrong-form of efficiency in the markets : The stock price will not change, because the market already incorporated that information in the stock price when the announcement was made.
What was the disorder that alexii suffered from : Bio 100 - How many children did the Tsar and tsarina Alexandra produce and what was the disorder that Alexii suffered from
Find confidence intervals for the mean body temperature : Calculate 95% confidence intervals for the mean body temperature in each group and comment about the confidence intervals.
What is the company cost of equity capital : Weston Industries has a debt-equity ratio of 1.1. Its WACC is 7 percent, and its pretax cost of debt is 5.6 percent. The corporate tax rate is 35 percent.
Describe the development of rules regarding the rights : Discuss one hot topic in the hospitality industry in regards to hospitality law. Why is it a hot topic, what are the pros and cons?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd