Suppose Exxon-Mobil Announces That Its Profits in the Third Quarter

question 46

Multiple Choice

Suppose Exxon-Mobil announces that its profits in the third quarter of 2016 were $40 billion.This will cause the price of Exxon-Mobil stock to

• A) rise.
• B) fall.
• C) remain unchanged.
• D) rise, fall, or remain unchanged depending on the expectations of market participants before the announcement.

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Definitions:

Dividends Payable

This refers to the amount of declared dividends owed by a company to its shareholders but has not yet been paid out.

Stockholders

Individuals or entities that own shares in a corporation, giving them a partial ownership interest in the company.

Accumulated Depreciation

is the total amount of depreciation expense that has been recorded for a fixed asset since it was put into use.

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations, investment, and financial activities.