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Suppose that a share of MTN had a closing price yesterday of $85, but new information was announced after the market closed that caused a
Suppose that a share of MTN had a closing price yesterday of $85, but new information was announced after the market closed that caused a revision in the forecast of the price next year to go to $125. If the annual equilibrium return on MTN is 15%, what does the efficient market hypothesis indicate the price will go to today when the market opens? (Assume that MTN pays $10 dividends.).
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