Microhard announces, after markets close on Tuesday, that it expects to increase dividends by 3% because of increased sales and net profits this coming quarter. Before markets open, onWednesday,analysts announce that they have confirmed Microhards announcement.

1)If the public believes the analysts, what does the efficient market hypothesis say will happen to the price of the stockbeforethe end of the end of the quarter?

A) increase to reflect the 3% dividend increase.

B) increase to reflect 2% dividend increase.

C) will not change because everyone was expecting the 3% dividend increase.

D) will not change because the announcement is irrelevant market information.

After the first quarter, Microhard announces that it is increasing the dividend by 2%, the largest dividend increase in the company's history.

2)What does the efficient market hypothesis say will happen to the price of the stockafterMicrohards announcement?

A) decrease to reflect the 3% dividend increase.

B) decrease to reflect the 2% dividend increase.

C) will not change because everyone was expecting a 2% dividend increase.

D) will not change because the announcement is irrelevant market information.