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mars1129 [50]
3 years ago
9

Fundamental analysis determines that the price of a firm's stock is too low, given its intrinsic value. The information used in

the analysis is available to all market participants, yet the price does not seem to react. The stock does not trade on a major exchange. What concept might explain the ability to produce excess returns on this stock?A. January effectB. Neglected-firm effectC. P/E effectD. Reversal effect
Business
1 answer:
Allisa [31]3 years ago
8 0

Answer:

The correct answer is letter "B": Neglected-firm effect.

Explanation:

The Neglected-firm effect has the purpose to explain why small companies that are not well-known have better performances than the ones that are. The theory explains that smaller companies' stocks generate higher returns because they are unlikely to be studied by market analysis. In that sense, because no much information is provided by the smaller firms -even lesser than what is required by law, they are <em>neglected </em>by analysts since there are very few data to take a look at.

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During which phase in the process must a firm allocate its factors of production?
Burka [1]
<span>In economics, the three stages of production are increasing average product production, decreasing marginal returns and negative marginal returns. It would be during the first stage that a firm must allocate its factors of production. Hope this answers the question.</span>
4 0
3 years ago
Read 2 more answers
Grand River Corporation reported taxable income of $500,000 in year 1 and paid federal income taxes of $105,000. Not included in
kondor19780726 [428]

The corporation's current earnings and profits for year one would be (A) $354,000.

<h3>What is taxable income?</h3>
  • The base on which an income tax system levies tax is referred to as taxable income.
  • In other words, the income is subject to taxation by the government.
  • In general, it includes some or all elements of income before costs and other deductions are deducted.
  • Income, costs, and other deductions differ depending on the country or system.
  • Many systems stipulate that certain types of income are not taxable (also known as non-assessable income) and that certain expenses are not deductible when calculating taxable income.
  • Some systems base tax on current-period taxable income, while others base it on prior-period taxable income.
<h3>To find the current earnings and profit for one year:</h3>

Income + Installment sale = 500,000 + 25,000 = $525,000

Income taxes + tax-exempt income = 170,000 + 1000 = $171,000

525,000 - 171,000 = $354,000

Therefore, the corporation's current earnings and profits for year one would be (A) $354,000.

Know more about taxable income here:

brainly.com/question/26316390

#SPJ4

Complete question:

Grand River Corporation reported taxable income of $500,000 in year 1 and paid federal income taxes of $170,000. Not included in the computation was a disallowed meal and entertainment expense of $2,000, tax-exempt income of $1,000, and deferred gain on an installment sale of $25,000. The corporation's current earnings and profits for year 1 would be:

A) $354,000.

B) $524,000.

C) $500,000.

D) $331,000.

7 0
2 years ago
Suppose the real risk-free rate is 3.00%, the average expected future inflation rate is 5.90%, and a maturity risk premium of 0.
Kamila [148]

Answer:

The answer is 9.00%

Explanation:

real risk-free rate = 3.00%

average expected future inflation rate = 5.90%

Maturity risk premium = 0.10%

The expected rate of return on a 1 year treasury security would be = the average expected future inflation rate + maturity risk premium + real risk-free rate.

= 3.00% + 5.90% + 0.10%

= 9.00%

6 0
3 years ago
A study was done of all homicide convictions in the State of Florida between 1976 and 1980 in order to examine if the applicatio
saw5 [17]

Answer and Explanation:

This is an example of Simpson’s paradox

8 0
3 years ago
The fundamental relationship between savings and investment spending in an economy is that: A. savings will increase as investme
Romashka-Z-Leto [24]

The correct option is B

<u>Explanation:</u>

In an economy, planned investment spending is always equal to planned saving. If actual saving falls short of (exceeds) planned saving, then actual investment falls short of (exceeds) planned investment.

That is the other part of the saving paradox. If an economy produces too much, such that saving is greater than planned investment, inventory will build up, giving signal to producers to reduce output, to restore equilibrium. Such investment scheme is suitable only to communist countries. Keynes has another investment theory in his liquidity story. But investment theories are equally a posterior.

Therefore, Option B is correct

8 0
3 years ago
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