On 21 July 2017 CFM Ltd announced that its EPS for the year ended 30 June 2017 was $0.97. This was 16% lower than the previous year. On the day of the announcement the share price of CFM increased resulting in an abnormal return for shareholders on that day of 9.46%. No other abnormal returns were generated around that date. Discuss.

What does this outcome imply?

Is this result consistent with market efficiency?

Can you please explain what EPS means?

and how can this be linked to the equity capital market and the price efficiency of capital market?

Would behavioral finance explain this outcome?