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trapecia [35]
3 years ago
11

Interpreting stock price changes (LO 6-6)

Business
1 answer:
mezya [45]3 years ago
3 0

Answer: 1. Yes it will cause a change.

2. Magnitude of the stock price change will be greater under scenario (b) than scenario (a).

Explanation:

1. There is a negative $200 million discrepancy between what Analysts expected and what the company announced. This means that the company's revenue was less than anticipated and will cause a REDUCTION in stock price because the market will be open and the stock price will need to reflect this new information to signify that the stock is not as valuable anymore.

2. Scenario a represents a situation where the cause of the reduction in revenue was WELL KNOWN and so it will be expected. The financial analysts would have accounted for this but evidently, not very well. Therefore the magnitude of the change will not be as large because it was SOMEWHAT EXPECTED.

Scenario b though refers to a situation where investors DID NOT KNOW or ANTICIPATE the cause of the discrepancy and as such will react more to it. This will mean that the magnitude of change in stock price will be larger here than in Scenario a.

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uysha [10]

1. Annual percentage rate

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I hope this helps!

5 0
3 years ago
Read 2 more answers
A company wants to generate a forecast for unit demand for year 2017 using exponential smoothing. The actual demand in year 2016
zimovet [89]

Answer:

114

Explanation:

For computing the forecast value for the resulting year, we have to apply the formula which is shown below:

= Actual demand × alpha + forecast demand × ( 1-  alpha)

= 90 × 0.2 + 120 × (1 - 0.2)

=  18 + 96

= 114

To compute the forecast value we have to deduct the alpha from the forecast demand and multiply the alpha with the actual demand

8 0
4 years ago
Use the following to prepare the cash budget. What is the ending cash balance? Beginning cash balance $3,000; Cash receipts $50,
aleksley [76]

Answer:

 Ending cash balance = $13,000

Explanation:

<em>A cash budget is statement that shows the estimated cash receipts and the estimated cash payments for a forth coming accounting period. In addition, it provides information about the expected cash balance for the period to which it relates.</em>

With help of a cash budget, a business can plan ahead for  the usage of its surplus funds and how to finance its deficit cash position

Ending cash balance = Beginning cash balance + cash receipts - cash payment

             = 3,000 + 50,000 - 40,000

 Ending cash balance = $13,000

7 0
4 years ago
A sustained, long-term slow down in economic growth is called:.
Neko [114]

Answer: A sustained, long-term slow down in economic growth is called. Secular Stagnation.

Explanation:

hope this helps

8 0
2 years ago
A company received cash sales of $15000. They also collected $43000 in receivables during the same month.
Bezzdna [24]

Answer:

1.) D

2.)C

3.)D

Explanation:

3 0
3 years ago
Read 2 more answers
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