• • • Clean Energy Ltd announced $2 million of negative unexpected earnings news due to some supply chain problems caused by COVID. 
    • Clean Energy Ltd is a high-risk firm. SpaceX Ltd, a low-risk firm, announced $2 million of negative unexpected earnings news due to a change in depreciation policy from a straight-line basis to a reducing-balance, accelerated basis.
    • Organic Foods Ltd announced $2 million of negative unexpected earnings news due to an unrealized foreign exchange loss on the purchase of some organic wine from Brazil. Assume that no significant economy-wide events affecting share prices occurred on this day. 
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  • Rank the firms in order of expected change in share price on this earnings announcement day and explain the reason for this ranking?
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Answer rating: 100% (QA)

The ranking of firms in terms of the expected change in share price on the earnings announcement day ... View the full answer