Author Question: Suppose XYZ Corporation is traded on the New York Stock Exchange. XYZ's closing price on Monday is ... (Read 92 times)

fasfsadfdsfa · **on:** Jul 11, 2018

Suppose XYZ Corporation is traded on the New York Stock Exchange. XYZ's closing price on
Monday is 20 per share. After the market closes on Monday, XYZ makes a surprise announcement
that it has obtained a major new customer.

XYZ's stock will likely
A) open above 20 because the positive news will result in a higher valuation even though the
stock has not yet traded.
B) remain at 20 per share because in efficient markets the price already reflects all information.
C) open below 20 because the surprise announcement creates more uncertainty.
D) open at 20 per share on Tuesday and then increase as more investors read the announcement
in the Wall Street Journal.

Question 2

Financial ratios that are higher than industry averages may indicate problems that are as
detrimental to the firm as ratios that are too low.

Indicate whether the statement is true or false

mtmmmmmk · **Reply #1 on:** Jul 11, 2018

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