Fundamental Analysis Shows That Quadrangle Company Is Fairly Valued

question 127

Multiple Choice

Fundamental analysis shows that Quadrangle Company is fairly valued. Then Quadrangle Company unexpectedly improves its production techniques and unexpectedly hires a new CEO away from another very successful competitor. Suppose this has no effect on the price of the stock of Quadrangle Company.

• A)Fundamental analysis would now show the corporation is overvalued.The fact that the price was unchanged is consistent with the efficient markets hypothesis.
• B)Fundamental analysis would now show the corporation is overvalued.The fact that the price was unchanged is not consistent with the efficient markets hypothesis.
• C)Fundamental analysis would now show the corporation is undervalued.The fact that the price was unchanged is consistent with the efficient markets hypothesis.
• D)Fundamental analysis would now show the corporation is undervalued.The fact that the price was unchanged is not consistent with the efficient markets hypothesis.

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Definitions:

Marketing Message

The core idea or message that a company wants to convey to its target audience through marketing efforts.

Financial Value

Financial value quantifies the monetary worth of an asset, service, or company, often gauged through pricing, market demand, and investment return.

Persuasive Presentation

A type of speech or slide show designed to convince or influence the audience regarding a specific viewpoint.

Audience

The group of people for whom a message, piece of writing, or entertainment is intended.