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question 4

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In a surprise announcement,NASA released details of a major contract with Lockheed-Martin (LMT)that would increase LMT's market value by $7.5 billion.It was widely expected by the market that this contract would be awarded to LMT's major competitor Boeing (BA).Assume that Boeing has 800 million shares outstanding and Lockheed Martin has 425 million shares outstanding.Prior to this announcement,the market felt that the probability of Boeing winning the contract was 90% and that Lockheed-Martin's chance was only about 10%.
-What are the implications of the efficient markets hypothesis for corporate managers?

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Definitions:

Enforceable

Capable of being imposed or applied, especially in legal contexts.

Procedurally Unconscionable Contract

A contract that is deemed unfair or unjust due to the process in which it was made, often involving lack of negotiation or imbalance in bargaining power.

Adhesion Contract

A contract created by a party to an agreement that is presented to the other party on a take-it-or-leave-it basis. Such contracts are legal but are sometimes rescinded on the grounds of unconscionability and the absence of one party’s free will to enter a contract.

Defamation

A false statement or an action that harms the reputation or character of an individual, business, product, group, government, or nation.