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What do expect will happen to the stock price

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Reference no: EM133004667

Problem 1: Super Pharmacy has just announced the development of a new drug for which the company is seeking approval from the Food and Drug Administration (FDA). If approved, the future profits from the new drug will increase Super Pharmacy market value by $1,125 million, Super Pharmacy has 75 million shares outstanding. If the development of this drug was a surprise to investors, and if the average likelihood of FDA approval is 15%, what do you expect will happen to the stock price when this news is announced? What may happen to the stock price over time?

Reference no: EM133004667

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