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1. Suppose that a share of Microsoft had a closing price yesterday of $90, but new information was announced after the market closed that caused
1. Suppose that a share of Microsoft had a closing price yesterday of $90, but new information was announced after the market closed that caused a revision in the forecast of the price for next year to go to $120. If the annual equilibrium return on Microsoft is 15%, what does the efficient market hypothesis indicate the price will go to today when the market opens? (Assume that Microsoft pays no dividends.)
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