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IgorLugansk [536]
2 years ago
11

Suppose you find that prices of stocks before large dividend increases show on average consistently positive abnormal returns. i

s this a violation of the emh? yes no
Business
2 answers:
bearhunter [10]2 years ago
8 0

Answer: No

Explanation:

EMH an acronym for Efficient market Hypothesis is a theory that security prices reflects all available information making it impossible to beat the market by taking undue advantages.

The information provided in the scenario is not detailed enough to give an investor the opportunity to earn abnormal returns .It just show that good performance leads to higher dividends as better performing stocks pay higher dividends

RideAnS [48]2 years ago
5 0

Answer:

NO

Explanation:

The efficient market hypothesis (EMH) theory states that the market price of securities reflects all the public information regarding them, e.g. expected earnings, etc. One of the basic premises of EMH is that it is useless for investors to pick individual stocks to try to obtain higher than normal results. It places a lot of emphasis on the market as a whole, instead of individual stocks.

If the prices of stocks vary a lot just before dividends increase, it actually reflects and supports EMH. Since the market expects an increase in dividends, the price of stocks will rise, but generally stock prices will rise too much and must then be adjusted to reflect the real value. Also, in the short run prices will appear to be varying randomly, but that happens because the inflow of information is not constant and expectations will vary. But on the long run, the prices will adjust to the correct information.

You might be interested in
Spectra Scientific of Santa Clara, California, manufactures Q-switched solid-state industrial lasers for LED substrate scribing
SIZIF [17.4K]

The <u>amount of the unrecovered balance</u> immediately before Spectra Scientific of Santa Clara, California made the first payment at the end of year 1 is $49,680,000.00.

<h3>What is future value?</h3>

The unrecovered amount is the future value of the loan at the end of year 1 after the first year's interest has been added, and before subtracting the first payment.

The future value can be computed using the Future Value Formula below or an online finance calculator as follows:

<h3>Future Value Formula:</h3>

FV = PV(1+r)^{n}

FV = future value

PV = present value

r = annual interest rate

{n} = number of periods interest held

<h3>Data and Calculations:</h3>

N (# of periods) = 6 years

I/Y (Interest per year) = 8%

PV (Present Value) = $46,000,000

PMT (Periodic Payment) = $0

<u>Results:</u>

FV = $49,680,000.00

<u>Annual Schedule of Payment and Balance:</u>

Period       PV                   PMT             Interest                    FV

1 $46,000,000.00 $0.00 $3,680,000.00 $49,680,000.00

Thus, the <u>amount of the unrecovered balance</u> immediately before Spectra Scientific of Santa Clara, California made the first payment at the end of year 1 is $49,680,000.00.

Learn more about future value at brainly.com/question/24703884

5 0
2 years ago
April runs a small shop where she provides a service. She is able to process an average of 11 customers per hour. An average of
professor190 [17]

Answer:

5. Po= 0.36

6. Pn = 0.04

7. 0.16

8. 1.11

9. 1.75

10. 9.9

Explanation:

5. Computation for the probability that April will not be working with a customer

Using this formula

Po=1-(Average number of arrival per hour/Average number of customer served per hour)

Let plug in the formula

Po= 1-(7/11 )

Po=1-0.64

Po= 0.36

Therefore the probability that April will not be working with a customer will be 0.36

6. Calculation for the probability of 5 customers in the system

Using this formula

Pn= (Average number of arrival per hour/Average number of customer served per hour)* Po

Let plug in the formula

Pn= (7/11)^5* 0.36

Pn=0.104358*0.36

Pn=0.037

Pn = 0.04 (Approximately)

Therefore the probability of 5 customers in the system will be 0.04

7. Calculation for the average time a customer spends waiting in line

Time spend Waiting in line=7^2/11(11 – 7) /7

Time spend Waiting in line=(49/44)/7

Time spend Waiting in line = 1.11/7

Time spend Waiting in line= 0.16

Therefore the average time a customer spends waiting in line will be 0.16

8. Calculation for the average number of customers waiting in line

Customers waiting in line = 7^2/11(11 – 7)

Customers waiting in line=49/44

Customers waiting in line= 1.11

Therefore the average number of customers waiting in line will be 1.11

9. Calculation for the average number of customers in the system

Average customers in the system= 1.11 +(7/11)

Average customers in the system= 1.11 +0.64

Average customers in the system = 1.75

Therefore the average number of customers in the system will be 1.75

10. Calculation for the arrival rate in order for April to stay that busy

Arrival rate = 0.9 * 11

Arrival rate = 9.9

Therefore the arrival rate in order for April to stay that busy will be 9.9

4 0
2 years ago
Sunland Company has the following account balances: Sales Revenue $226,700, Sales Discounts $4,410, Cost of Goods Sold $129,600,
Kaylis [27]

Answer and Explanation:

The Journal entry is shown below:-

1. Sales revenue Dr,  $226,700

        To Income revenue $226,700

(Being close accounts with credit income balances is recorded)

2. Income revenue Dr, $134,010

         To Sales discount $4,410

         To Cost of goods sold $129,600

(Being close accounts with debit expenses account is recorded)

8 0
3 years ago
Mason and Kirsty purchase 30 shares of Apple stock on January 1, 2009 for $72.49 per share. Mason and Kirsty receive $0.36 per s
zmey [24]

Answer:

  • after-tax average annual return = 14.41%
  • after tax dividends per year = $38.88

Explanation:

initial investment = 30 shares x $72.49 per share = $2,174.70

- dividends received per year = 30 shares x $0.36 x 4 (dividends paid every quarter) = $43.20

after tax dividends per year = $43.20 x 90% = $38.88

- long term capital gains = (30 shares x $183 per share) - initial investment =  $5,490 - $2,174.70 = $3,315.30

taxes on long term capital gains = $3,315.30 x 10% = $331.53

To calculate Mason and Kirsty's after tax average annual return (interest rate) we can use the excel spreadsheet =RATE function, where:

  • PV = -2174.70
  • FV = 5490 - 331.53 = 5158.47
  • Pmt = 38.88
  • Nper = 7

=RATE (nper, pmt, pv, [fv])

=RATE (7,38.88,-2174.70,5158.47) = 14.41%

5 0
3 years ago
Suppose that you have placed money in 2 funds: fund a and fund
Harman [31]
8% effective. at the end of 10 years, the total of the two funds is 52,000. at the end of 8 years, the amount in fund b is three times that in fund
6 0
2 years ago
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