Investors expect a company to announce a 5% decrease in earnings. Instead, the company announces that earnings decreased by 2%. Question 4 options: The stock's price will fall after the announcement because the company had negative earnings The stock's price will rise after the announcement because the company's earnings weren't as bad as expected The stock's price will not change because it will have already fallen due to expectations of negative earnings, so the announcement will have no affect
Investors expect a company to announce a 5% decrease in earnings. Instead, the company announces that earnings decreased by 2%. Question 4 options: The stock's price will fall after the announcement because the company had negative earnings The stock's price will rise after the announcement because the company's earnings weren't as bad as expected The stock's price will not change because it will have already fallen due to expectations of negative earnings, so the announcement will have no affect
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Investors expect a company to announce a 5% decrease in earnings. Instead, the company announces that earnings decreased by 2%.
Question 4 options:
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|
The stock's price will fall after the announcement because the company had negative earnings |
|
|
The stock's price will rise after the announcement because the company's earnings weren't as bad as expected |
|
|
The stock's price will not change because it will have already fallen due to expectations of negative earnings, so the announcement will have no affect |
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