On a Particular Day, a Mining Company Reveals That, Due

question 10

Multiple Choice

On a particular day, a mining company reveals that, due to new extraction technology, the extractable yield from several of its mines has risen by 15%. Which of the following is the LEAST likely consequence of such an announcement?

• A)Investors would increase their forecast of future cash flows in that firm.
• B)The share price would rise due to the pressure to buy.
• C)Investors would revise their estimates of the net present value (NPV)of the firm.
• D)Investors would determine that the estimates of the firm's value on the date prior to the announcement were too high.

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Definitions:

Wage Rate

The amount of money paid to an employee per unit of time, such as an hour or week, for their work services.

Racial Prejudice

A bias against individuals based on their race, often manifesting in negative attitudes or unfair treatment.

Discrimination Coefficients

Discrimination coefficients quantify the level of differentiation or bias between groups in statistical analysis, often used to measure the extent of inequality in treatment or outcomes.

Labor Demand

The total number of hours that employers want to hire labor at a given wage rate, in a given time period.