Which of the Following Is a Significant Implication of Stock

question 19

Multiple Choice

Which of the following is a significant implication of stock market efficiency?

• A) The market offers managers an informed and objective critique of their performance.
• B) Timing of a new share issue is critical to its success.
• C) A search for undervalued businesses will provide lucrative take-over targets.
• D) Businesses must take seriously the setting of the level of risk and appropriate return on an investment.
• E) Altering the type of security may make the initial offering more appealing to investors.

---

Definitions:

Economic Profit

The split between a firm's entire proceeds and its total disbursements, embracing both acknowledged and veiled costs.

Normal Profit

The minimum profit necessary for a company to remain competitive in the market, equating to the opportunity cost of the resources employed.

Normal Profit

The minimum level of profit necessary for a company to remain competitive in the market, often considered the break-even point.

Marginal Cost

Marginal cost is the increase in total cost that arises from producing one more unit of a good or service. It is a critical concept in economics for decision-making regarding production levels.