Question: John, who has just completed his first finance course, is unsure whether he should take a course in business analysis and valuation using financial statements,

John, who has just completed his first finance course, is unsure whether he should take a course in business analysis and valuation using financial statements, since he believes that financial analysis adds little value, given the efficiency of capital markets. Explain to John when financial analysis can add value, even if capital markets are generally seen as being efficient.

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The efficient market hypothesis states that security prices reflect all available information as if such information could be costless digested and tr... View full answer

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