A firm makes an unexpected announcement that losses of $10 million will be taken today, against a deal that was previously expected to provide profits of $20 million. The firm has 10 million shares outstanding. If the market is semi-strong form efficient, what stock price reaction is expected? No loss or gain, as the market is efficient Unknown price impact, as the income impacts are unclear. $1 per share loss $2 per share loss $3 per share loss

A firm makes an unexpected announcement that losses of $10 million will be taken today, against a deal that was previously expected to provide profits of $20 million. The firm has 10 million shares outstanding. If the market is semi-strong form efficient, what stock price reaction is expected? No loss or gain, as the market is efficient Unknown price impact, as the income impacts are unclear. $1 per share loss $2 per share loss $3 per share loss

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter15: Capital Structure Decisions

Section: Chapter Questions

Problem 8P

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