Suppose the broad stock market falls 20% in a year and Home Depot's stock price falls by

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Suppose the broad stock market falls 20% in a year and Home Depot's stock price falls by 10%.

a. Will the company's market value added rise or fall?

b. Should this change affect our assessment of the performance of Home Depot's managers?

c. Would you feel differently about Home Depot's managers if the stock market were unchanged and Home Depot's stock fell by 10%?

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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Question Posted: Jun 30, 2016 09:09 AM

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Suppose the broad stock market falls 20% in a year and Home Depot's stock price falls by

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a and b c Market value added MVA is the current value of the firm and the capital cont...View the full answer

Fundamentals of Corporate Finance

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