The following graph represents the Cumulative Average Abnormal Return (CAAR) for the stocks of companies targeted for take-over.   Which of the following statements is true?   a. In a weak form efficient market, t* is the actual takeover event (i.e. the time when the legal takeover transaction is completed)   b. In a semi-strong form efficient market, t* is the takeover announcement event   c. In a strong form efficient market, t* is the acquiring company takeover decision event (i.e. the time when an acquiring company decides to launch a takeover)   d. (a) & (b)   e. (b) & (c)

Which of the following characteristics accurately describes the stock market? An active market that determines the price of a firm’s shares   A fixed-income market where participants buy and sell debt securities     The bid-ask spread in a dealer market represents the profit that a dealer would make on a transaction involving a security. Which of the following statements best describes the bid-ask spread? The difference between the closing price of the security and the opening price of the security on the day of the transaction.   The sum of the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it.   The difference between the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it.     Fernando, a trader, wants to buy 1,000 shares of XYZ stock, while a second trader, Ally, is willing to sell 1,500 shares of the same stock. Unfortunately, Fernando…

Consider each of the following statements, state whether you believe they are true orfalse and explain your choice of answer (I) The dividend valuation model can only be used for determining the shareprice if a company is currently paying dividends and those dividends areexpected to grow at a constant rate.(ii) The fact that share prices may be highly volatile does not necessarily meanthat the stock market is inefficient.(iii) Newly listed companies are much more difficult to value using the dividendvaluation model than are companies with a long history of being listed on the stock exchange.(iv) The dividend valuation model only takes account of financial payments to shareholders and as such does not take account of intangible factors such as brand loyalty, goodwill and patents) which are likely to impact on share value.

In a targeted stock repurchase, ... O A. ... a firm uses a tender offer to buy back a large number of own shares. O B. ... a firm buys back own stock from shareholders on the open market. O C. ... a firm distributes put options on its own shares to its shareholders. O D.... a firm buys back own shares from one or few major shareholders.