What is the effect on the stock price of a company

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What is the effect on the stock price of a company that announces it earned higher-than-expected quarterly profits?

  • The stock price will likely go up because it's a clear indication that the financial health of the company is strong.
  • The effect depends on what generated the profits and how analysts forecast this information.
  • The stock price will likely go up because the announcement suggests that the company is undervalued.
  • The stock price will likely go down because analysts do not like unexpected surprises from company financial reporting.

Reference no: EM133004043

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