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In a surprise announcement Downing Street released details of a major contract with I.P Morgan (P) that would increase JP's market value by 14 billion.
In a surprise announcement Downing Street released details of a major contract with I.P Morgan (P) that would increase JP's market value by 14 billion. It was widely expected by the stock market that this contract would be awarded to JP's major competitor Goldman Sachs (GS). GS has 750 million shares outstanding and JP has 375 million shares outstanding Prior to this announcement, the market felt and widely believed that the probability of G5 winning the contract was 70% and that IP's chance was 30% a. What do you anticipate will happen to Ps and GSs stock prices as a result of this surprise announcement? Effect on Price of JP Increase Decrease Effect on Price of GS Increase Decrease b. Evaluate the likely stock price respondes. JP Price Change GS Price Change
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