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IrinaK [193]
3 years ago
6

Clever tests to discriminate between alternative explanations. LaPorta, Lakonishok, Shleifer, and Vishny ("Good News for Value S

tocks," Journal of Finance, June 1997) study the returns on stocks on the few days surrounding their quarterly earnings announcements (relative to various expected return benchmarks). They find that on average, high-B/M stocks earn 0.9% around an earnings announcement. In contrast, low-B/M stocks earn an average of -0.1% around an earnings announcement. The difference is statistically significant.
Discuss whether the return pattern found by LaPorta et al. (1997) around earnings announcements is more consistent with the irrational expectations (behavioral) view, or the risk factor (efficient markets) view of the book-to-market effect, and explain your logic.
Business
1 answer:
yulyashka [42]3 years ago
8 0

Answer:

The answer to the above question is:

"The return patterns around earnings announcement is an example of behaviorial pattern exhibiting as more investors flock to buy the stock which has shown better earnings thus driving up the price. In an efficient market, this information would already be built into the price and thus there would not be any appreciable change in price post earning announcement".

Explanation:

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A project with an initial investment of $438,500 will generate equal annual cash flows over its 9-year life. The project has a r
motikmotik

Answer:

$70 194.95

Explanation:

The computation of the minimal annual cash flow needed for accepting the project is shown below:

As we know that

Present value of annuity = Annuity × [1 - (1 + interest rate)^ - time period] ÷ rate

$438,500 = Annuity × [1 - (1.08)^ - 9] ÷ 0.08

$438,500 = Annuity × 6.246887911

So,

Annuity = $438,500 ÷ 6.246887911

= $70 194.95

7 0
3 years ago
Harmony reports a regular tax liability of $15,800 and tentative minimum tax of $17,880. Given just this information, what is he
Ksenya-84 [330]

$2,000 is her alternative minimum tax liability for the year. Because Harmony's tentative minimum tax exceeds her regular tax, the $2,000 difference is her alternative minimum tax liability for the year.

<h3>What is Tax Liability?</h3>
  • The amount that a person, company, or other entity owes to a federal, state, or local tax authority is known as their tax liability.
  • The selling of an investment or other item that generates income generally results in the creation of a tax burden. When purchasing items, one may be required to pay a municipal or state sales tax. (Although several nations do, the United States does not impose a national sales tax.)
  • If a person's overall tax debt was nil or if their income was too low to necessitate filing tax returns, they might not have any income tax burden.

To learn more about Tax Liability with the given link

brainly.com/question/15394738

#SPJ4

5 0
1 year ago
Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 3.1 pound
photoshop1234 [79]

Answer:

Contribution margin per pound

K1  - $16.90

S5 - $8.60

G9  - $10.40

Explanation:

Both sales and variable cost are dependent on the number of units sold.

The sales less the variable cost gives the contribution margin. The contribution margin less the fixed cost gives the net operating income.

The contribution margin per pound for each of the three products is the ratio of the contribution margin per unit of a product to the number of pounds required per unit of that product.

                                           K1                  S5                        G9

Selling price                      $147.39        $112.64                 $215.56

Variable costs                     $95.00       $92.00                 $149.00

Contribution margin            $52.39       $20.64                 $66.56

Pounds per unit                       3.1                2.4                       6.4

Contribution margin/pound  $16.90       $8.60                   $10.40

7 0
3 years ago
If two or more users are waiting for the other user to release a lock before they can proceed, this is known as a ____.
ra1l [238]
The correct answer to go in the blank would be ''Deadlock''.

3 0
3 years ago
Read 2 more answers
Which of the following statements is not correct? Employees have limited protection against surveillance by employers.
babunello [35]

Answer: As with normal first-class mail, employers cannot read employee e-mail."

Explanation:

From the options given, the correct statements are that:

• Employees have limited protection against surveillance by employers.

• The large majority of organizations monitor employee Internet usage.

• The large majority of organizations use URL filtering.

• Employees should be aware that surveillance is legal.

The option that "as with normal first-class mail, employers cannot read employee e-mail" is incorrect. Employers can read the email of their workers.

3 0
3 years ago
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