Studies on the Timing of Corporate Issues of New Equities

question 22

Multiple Choice

Studies on the timing of corporate issues of new equities suggest that corporations tend to offer

• A) New issues after stock price increases. This behavior is consistent with the weak form of the efficient market hypothesis.
• B) New issues after stock price increases. This behavior is inconsistent with the weak form of the efficient market hypothesis.
• C) New issues randomly with regard to stock price changes. This behavior is consistent with the weak form of the efficient market hypothesis.
• D) New issues randomly with regard to stock price changes. This behavior is inconsistent with the weak form of the efficient market hypothesis.

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Definitions:

Warning Signs

Indicators or symptoms that signal a potential problem or risk, urging preventive action to mitigate adverse outcomes.

Social Network

A structure made up of individuals or organizations that are connected by one or more types of interdependencies, such as friendships, kinships, common interests, or social support.

Positive Consequences

Outcomes that are viewed as beneficial or desirable following certain actions or behaviors, often used in the context of learning and behavior modification.

Negative Consequences

Undesirable or harmful outcomes resulting from specific actions or inactions.