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

question 16

Multiple Choice

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

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

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Definitions:

Conservation Tillage

Agricultural practices that minimize the disruption of the soil's structure and composition, aiming to improve water absorption, reduce erosion, and enhance soil health, ultimately supporting sustainable agriculture.

Terracing

An agricultural practice of creating terraces on steep slopes to reduce soil erosion and water runoff, while making steep land more usable for farming.

Wind Erosion

The process of removing soil particles by wind, leading to land degradation and a loss of soil fertility.

Canadian Prairies

A vast geographical region in Western Canada known for its flat terrain and grassy landscapes, crucial for agriculture and home to many species of plants and animals.