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question 77

Essay

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In a surprise announcement,NASA released details of a major contract with Lockheed-Martin (LMT)that would increase LMT's market value by $7.5 billion.It was widely expected by the market that this contract would be awarded to LMT's major competitor Boeing (BA).Assume that Boeing has 800 million shares outstanding and Lockheed Martin has 425 million shares outstanding.Prior to this announcement,the market felt that the probability of Boeing winning the contract was 90% and that Lockheed-Martin's chance was only about 10%.
-What do you anticipate will happen to Lockheed-Martin and Boeing's stock prices are a result of this surprise announcement?

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Definitions:

Adjusted Trial Balance

A version of the trial balance that reflects account balances after adjustments, serving as the basis for preparing financial statements.