On a Particular Day, a Mining Company Reveals That, Due

question 39

Multiple Choice

On a particular day, a mining company reveals that, due to new extraction technology, the extractable yield from several of its mines has risen by 15%. Which of the following is the LEAST likely consequence of such an announcement?

• A) Investors would increase their forecast of future cash flows in that firm.
• B) Investors would revise their estimates of the net present value (NPV) of the firm.
• C) Investors would determine that the estimates of the firm's value on the date prior to the announcement were too high.
• D) The share price would rise due to the pressure to buy.

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Definitions:

Entitativity

The perception of a group as a single entity, possessing clear boundaries and a coherent identity.

Aggregate

A total or whole made up of distinct elements or individuals gathered together.

Morality

A system of values and principles concerning the distinction between right and wrong or good and bad behavior.

Formation

The process of coming into existence or the act of creating or developing something.