1. LookGood, Inc. has just announced the bad news that its earnings have dropped by 30 percent. In fact, its investors had anticipated a decrease of 20 percent. As a result, LookGood's stock price: A. increases. B. remains the same. C. decreases. D. follows a random walk as usual. 2. What is the current price of a share of stock for a firm with $5 million in balance-sheet equity,

 

 

500,000 shares of stock outstanding, and a price/book value ratio of 4?

  

Answer rating: 100% (QA)

1 The stock price of LookGood Inc is influenced by the difference between the announced ... View the full answer