If unexpected news raised people's expectations of a corporation's future dividends and price,then before the price changes this corporation's stock would be
A)overvalued,so its price would rise.
B)overvalued,so its price would fall.
C)undervalued,so its price would rise.
D)undervalued,so its price would fall.

Question

Quizplus · Accepted Answer

If unexpected news raises expectations of future dividends and price, the stock is undervalued relative to its new expected value, leading to a price increase.

If Unexpected News Raised People's Expectations of a Corporation's Future