You are CEO of a tech company, which is a C corporation Your companys stock is traded in the NYSE Your company issued $200 million 10 year investment grade bonds to public investors two years ago A month ago, your company issued $50 million 90 day commercial papers Your company wants to develop a new product You were told by the operations and marketing managers that the new project is very promising Your company needs $75 million to finance the project The finance department suggests three funding options (1) use the companys retained earnings, (2) negotiate a 5 year term loan from a bank, and (3) issue additional stocks to raise money You are considering these alternative options If the stock market is efficient in the strong form, then a your best guess of the unobservable true value of your companys stock cannot,on average, be more accurate than the current share price b your best guess of the unobservable true value of your companys stock mustalways be more accurate than the current share price c your best guess of the unobservable true value of your companys stock is likely,on average, to be more accurate than the current share price If the stock market is efficient in the semi strong form, then a your best guess of the unobservable true value of your companys stock cannot,on average, be more accurate than the current share price b your best guess of the unobservable true value of your companys stock mustalways be more accurate than the current share price c your best guess of the unobservable true value of your companys stock is likely,on average, to be more accurate than the current share price If the stock market is efficient in the strong form, then as company CEO, your objective is supposed to if the stock market is efficient in the semi strong form, then your objective is supposed to maximize current share price maximize current share price maximize current share price maximize share value and effectively communicate with investors to make share price stay close to share value maximize share value and effectively communicate with investors to make share price stay close to share value maximize current share price maximize share value and effectively communicate with investors to make share price stay close to share value maximize share value and effectively communicate with investors to make share price stay close to share value

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Posted on Oct 02, 2024

You are CEO of a tech company, which is a C corporation. Your companys stock is traded in the NYSE. Your company issued $200 million

You are CEO of a tech company, which is a C corporation. Your companys stock is traded in the NYSE. Your company issued $200 million 10-year investment-grade bonds to public investors two years ago. A month ago, your company issued $50 million 90-day commercial papers. Your company wants to develop a new product. You were told by the operations and marketing managers that the new project is very promising. Your company needs $75 million to finance the project. The finance department suggests three funding options: (1) use the companys retained earnings, (2) negotiate a 5-year term loan from a bank, and (3) issue additional stocks to raise money. You are considering these alternative options.

If the stock market is efficient in the strong form, then _____. a. your best guess of the unobservable true value of your companys stock cannot,on average, be more accurate than the current share price b. your best guess of the unobservable true value of your companys stock mustalways be more accurate than the current share price c. your best guess of the unobservable true value of your companys stock is likely,on average, to be more accurate than the current share price
If the stock market is efficient in the semi-strong form, then _____. a. your best guess of the unobservable true value of your companys stock cannot,on average, be more accurate than the current share price b. your best guess of the unobservable true value of your companys stock mustalways be more accurate than the current share price c. your best guess of the unobservable true value of your companys stock is likely,on average, to be more accurate than the current share price
If the stock market is efficient in the strong form, then as company CEO, your objective is supposed to _____; if the stock market is efficient in the semi-strong form, then your objective is supposed to _____.
1. maximize current share price; maximize current share price
2. maximize current share price; maximize share value and effectively communicate with investors to make share price stay close to share value
3. maximize share value and effectively communicate with investors to make share price stay close to share value; maximize current share price
4. maximize share value and effectively communicate with investors to make share price stay close to share value; maximize share value and effectively communicate with investors to make share price stay close to share value