Suppose XYZ Corporation Is Traded on the New York Stock

question 88

Multiple Choice

Suppose XYZ Corporation is traded on the New York Stock Exchange.XYZ's closing price on Monday is $20 per share.After the market closes on Monday,XYZ makes a surprise announcement that it has obtained a major new customer.XYZ's stock will likely

• A) open at $20 per share on Tuesday and then increase as more investors read the announcement in the Wall Street Journal.
• B) remain at $20 per share because in efficient markets the price already reflects all information.
• C) open above $20 because the positive news will result in a higher valuation even though the stock has not yet traded.
• D) open below $20 because the surprise announcement creates more uncertainty.

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Definitions:

Market Share

The share of a market dominated by a specific company or product, frequently represented as a percentage.

Marketing Plan

A comprehensive document or strategy outlining an organization's advertising and marketing efforts over a period, including campaigns, goals, and target markets.

Operations Plan

A detailed plan outlining the day-to-day activities necessary for running a business, including production, inventory, and distribution strategies.

Lower Prices

Reduced costs of goods or services offered to consumers, often used as a strategy to increase demand or market share.