If a company is expected to earn $1 per share this year and 2% more per share each subsequent year, the stock price in an efficient market will reflect
A. both of these pieces of information.
B. the $1 per share but ignore the 2% annual growth.
C. neither of these pieces of information.
D. the 2% annual growth but not the starting point of $1 per share.
Answer: A
You might also like to view...
Over the past two decades, the saving rate in China has been approximately ________%
A) 17 B) 80 C) 40 D) 5
Suppose the lowest-wage state in the United States is West Virginia and the highest-wage state is New York. Which of the following would be true?
a. If New York trades with West Virginia, consumers in New York will be worse off. b. If New York trades with West Virginia, wages in New York will fall until they equal the wages in West Virginia. c. New York would be better off if its state government imposed restrictions on the importation of goods made in West Virginia. d. Both New York and West Virginia will be better off if they are allowed to trade freely.
When carmakers began to cut the costs of producing cars by designing the chassis, engines, and transmissions so that different models could be produced on the same assembly line, production costs fell $240 per car. This idea best illustrates:
A. diminishing marginal product. B. diseconomies of scale. C. economies of scale. D. constant returns to scale.
Currency traders expect the value of the dollar to fall. What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?
A) Demand for dollars will increase, and supply of dollars will decrease. B) Demand for dollars will increase, and supply of dollars will increase. C) Demand for dollars will decrease, and supply of dollars will increase. D) Demand for dollars will decrease, and supply of dollars will decrease.