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Based on the Finical accounting theory( William R. Scott)Ch1-CH5 please explain QuesLIVIT ZU11 PONTIL) Listen Company ABC is a large manufacturing company listed on a

Based on the Finical accounting theory( William R. Scott)Ch1-CH5image text in transcribed

please explain

QuesLIVIT ZU11 PONTIL) Listen Company ABC is a large manufacturing company listed on a major stock exchange. ABC reported their income for the year ended December 31, 2020 on March 1, 2021. Their reported net income is consistent with analysts expectations. No other information about ABC was released to the public on March 1, 2021. A significant economy wide event on March 1, 2021 resulted in a major increase in the stock market index. Would you expect a change in price of ABC's common stock on March 1, 2021 and why No, because firm specific risk can be diversified No, because there is no new information about ABC on March 1, 2021 Yes, because ABC is listed on a major stock exchange Yes, because the economy wide events on March 1, 2021 would cause an increase in the common stock price of ABC No, because the common stock price would have changed on December 31, 2020

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