Question
The efficiency of stock markets is one of the crucial assumptions for the stock price maximization objective. Assuming that the markets are perfectly efficient which
The efficiency of stock markets is one of the crucial assumptions for the stock price maximization objective. Assuming that the markets are perfectly efficient which of the following is the correct stock price response after a surprise good news?
a.
An immediate increase in the stock price on the announcement but no price drift thereafter
b.
An immediate increase in the stock price and a gradual decrease in the days thereafter
c.
No change in stock prices
d.
An immediate increase in the stock price and a gradual increase in the days thereafter
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Fundamentals Of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 10th Edition
1337902578, 978-1337902571
