Give Two Conditions That Are Important to the Efficient Market

question 50

Essay

Give two conditions that are important to the efficient market theory. List one implication of the efficient market theory.

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Definitions:

Stock Dividend

is a dividend payment made in the form of additional shares rather than cash, potentially diluting the value of each share but not the total value.

Owners

Individuals or entities that possess legal rights and control over a company, property, or asset.

New Shares

Securities that represent ownership in a corporation, issued to the public for the first time.

Stock Splits

A corporate action that increases the number of a company's shares by dividing each share, which typically decreases the share price but does not change the overall market capitalization.