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Please help me to answer all these questions! Thank you in advance. Choose all that are appropriate statements regarding the effects of signaling in the
Please help me to answer all these questions! Thank you in advance.
Choose all that are appropriate statements regarding the effects of signaling in the stock market.
- The announcement of increased profits cause an increase in the stock price.
- The stock price of a firm reporting earnings that are only a few cents below their previous estimates often go down by substantial amounts.
- The announcement of share buyback leads to an increase in the share price.
- The announcement of a tender offer causes an increase in the stock price of the target company.
- The issue of equity often cause a company's stock price to decrease.
Choose all that are appropriate.
- Private equity provides equity or debt financing to private companies outside the public capital markets.
- Most equity research analysts are employed by (and receive their paychecks from) industrial companies.
- When a firm is planning an IPO, the buy-side will help the firm sell the shares.
- Low-ranking analysts could make outlandish and contrary predictions, hoping that a lucky break will propel them to the top of the rankings
- Analysts are often afraid to recommend sell for a company's stock because that company may not do business with their employer in the future.
Which of the following is an example of a good incentive?
- Analysts are afraid to recommend sell for a company's stock because that company may not do business with their employer in the future.
- Investors want to make money so they invest in companies that are doing well.
- Pension funds invest in high-quality companies because they want to take care of their retirees.
- CEOs take large risks with their companies, because a good part of their annual compensation is tied to the share price.
- An investment manager has an incentive to imitate the strategies adopted by other managers, because the consequence of being wrong would be less severe.
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