Question: Two firms of the same size and risk release their
Two firms, of the same size and risk, release their annual reports on the same day. It turns out that they each report the same amount of net income. Following the release, the share price of one firm rose strongly while the other rose hardly at all. Explain how it is possible for the market to react positively to one firm’s annual report and hardly at all to the other when the firms are similar in size, risk, and reported profitability.
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