Which One of the Following Announcements Is Most Apt to Cause

question 31

Multiple Choice

Which one of the following announcements is most apt to cause the price of a firm's stock to increase?

• A)The firm met its quarterly earnings forecast.
• B)An unpopular CEO unexpectedly announced he is resigning effective immediately.
• C)A firm officially confirmed the rumors that it is merging with a competitor.
• D)The firm just lowered its projected earnings per share for next year.
• E)Analysts are expected to lower the firm's credit rating on its debt.

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Definitions:

Source Documents

Documents that provide evidence of a business's transactions, such as invoices, contracts, or receipts.

General Journal Entries

The records of financial transactions in the chronological order in which they occur, used as a preliminary step in building the company's financial statements.

Raw Materials

The basic materials that are used in the manufacturing process to create finished goods.

Direct Labor

The wages or costs associated with workers who are directly involved in the production of goods or services.