which of the following statements regarding students' future earning potential is true? course hero

by Bonnie Kerluke 3 min read

What happens when an investor discovers new publicly available info about a firm?

by the time an investor discovers new publicly available info about a firm, the market already knows it and has responded with a price adjustment.

What is the price that should be observed in a well-functioning stock market?

It is the price that should be observed in a well-functioning stock market; It is the present value of the cash payoffs anticipated by the investor who buys the stock.

What is it called when a firm sells its shares directly to investors?

When a firm sells its shares directly to investors and receives that proceeds from the sale, this is called a .... transaction. primary market. When investors sell shares of a firm's stock to each other on an exchange or though an electronic network, this is called a ... transaction. secondary market.