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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.

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Matching Exercise: Match the type of bond to its definition. a)The Catastrophe Bond: b)A Warrant Bond: c)An Income bond: d)A Con
RUDIKE [14]

Answer:

Match the type of bond to its definition.

a)The Catastrophe Bond:

This bond is security emitted by a company to raise funds in the form of debt because it suffered a natural disaster and needs liquidity.

b)A Warrant Bond:

This type of bond is emitted by a company to favor the holder for the right to buy a stock at a price that will be decided by the company at the moment of the warrant bond expedition. This price is not linked to the market stock price at the moment of execution.

c)An Income bond:

This security is a bond that compromises the company to pay the established amount if the company makes enough earnings to issue the fraction established of the debt,

d)A Convertible bond:

This type of security provides a stable payment for the holder as payment for the lending of a certain amount of money. However, it has a special right to be converted in stock if the holder wants it.

e)A Put bond:

This type of security compromises the issuer to buy a certain stock from the holder at a certain price with a certain duration.

Explanation:

The reasons to back this answer are:

a)The Catastrophe Bond:

This bond is security emitted by a company to raise funds in the form of debt because it suffered a natural disaster and needs liquidity. This is a very effective bond to issue debt in any unexpected event.

b)A Warrant Bond:

This type of bond is emitted by a company to favor the holder for the right to buy a stock at a price that will be decided by the company at the moment of the warrant bond expedition. This price is not linked to the market stock price at the moment of execution. This is a very good bond to reward management for good results.

c)An Income bond:

This security is a bond that compromises the company to pay the established amount if the company makes enough earnings to issue the fraction established of the debt, This is a very good bond to not compromise to use a payment of a debt, and keeping it outside a bad scenario for the company.

d)A Convertible bond:

This type of security provides a stable payment for the holder as payment for the lending of a certain amount of money. However, it has a special right to be converted into stock if the holder wants it. This bond is very good to increase the stocks in the market and reduce the sare price to pump it.

e)A Put bond:

This type of security compromises the issuer to buy a certain stock from the holder at a certain price with a certain duration. This type of bond is very good to sell short the position of a company with bad performance.

3 0
3 years ago
Andrew owns land (adjusted basis of $94,400) that he uses in his business. He exchanges the land and $47,200 in cash for a diffe
Inga [223]

Answer:

Andrew did do a proper feasibility study about the land

Explanation: Andrew lots chunk of money  because he gave out his land half of the price he bought it initially. And bought another at a higher price

which is more than the  10,000 dollars

7 0
3 years ago
MOSS COMPANY Selected Balance Sheet Information December 31, 2018 and 2017 2018 2017 Current assets Cash $ 90,650 $ 32,800 Accou
Andru [333]

Answer:

 $65,250

Explanation:

The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net income $5,000

Adjustment made:

Add : Depreciation expense $48,000

Add: Decrease in accounts receivable $13,000 ($31,000 - $44,000)

Less: Increase in inventory -$10,700 ($66,000 - $55,300)

Add: Increase in accounts payable $10,700 ($42,400 - $31,700)

Less: Decrease in income tax payable-$750  ($2,650 - $3,400)

Total of Adjustments $60,250

Net Cash flow from Operating activities                       $65,250

8 0
3 years ago
Trading centers in other countries helped the mother country in all of the following ways except for
VMariaS [17]
Trading centers in other countries helped the mother country in all of the following ways except for...

Answer: Out of all the options that are shown above the one that is not a way that trading centers helped the mother country is answer choice A) becoming more self-sufficient.

I hope it helps, Regards.
7 0
3 years ago
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