Multiple Choice
How do stock prices act as a signal for the future value of the firm?
A) If firms merge, stock prices could rise indicating that the merger can result in greater profitability.
B) If stock prices rise, they could be indicating future profitability for the firm.
C) If stock prices fall, they could be indicating declining economic conditions.
D) All of these possibilities are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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