Asked by Monshadrik Hunter on May 12, 2024
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Companies that report good news earnings tend to have an upward drift in stock returns before the actual earnings announcement date.
Good News Earnings
Earnings reports that exceed investors' expectations, positively influencing the company's stock price.
Stock Returns
The returns a shareholder earns on their investment, including both price appreciation and dividends.
Earnings Announcement Date
The specified day on which a company publicly releases its financial performance results for a given period.
- Comprehend the influence of market efficiency and rationality on stock prices in relation to anticipated future earnings and cash flows.
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Learning Objectives
- Comprehend the influence of market efficiency and rationality on stock prices in relation to anticipated future earnings and cash flows.
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