Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The CEO of High Tech International decides to change an accounting method at the end of the current year. The change results in reported profits

The CEO of High Tech International decides to change an accounting method at the end of the current year. The change results in reported profits increasing by 5%, but the company's cash flows are not changed. If the Capital Markets are efficient then: A- the stock price will increase due to higher profits, B-the stock price will not be affected by the accounting change, C-the stock price will decrease because accounting method changes are not permitted under generally accepted accounting principles, D- the stock price will increase only if the accounting change will also result in higher profits in the next year. from marycamillam@gmail.com

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik

10th edition

0-07-794127-6, 978-0-07-79412, 978-0077431808

Students also viewed these Finance questions