LookGood,Inc

question 54

Multiple Choice

LookGood,Inc.has just announced the bad news that its earnings have dropped by 30%.In fact,its investors had anticipated even worse results (a decrease of 40%) .As a result,LookGood's stock price:

• A) increases.
• B) remains the same.
• C) decreases.
• D) follows a random walk as usual.

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold in an open market.

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders and held in the company's treasury, reducing the amount of outstanding stock.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing shareholders' ownership interest.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash, increasing the number of shares owned by shareholders.