Which one of the following events would be included in the expected return on Sussex stock?
A)The chief financial officer of Sussex unexpectedly resigned.
B)The labor union representing Sussex' employees unexpectedly called a strike.
C)This morning, Sussex confirmed that its CEO is retiring at the end of the year as was anticipated.
D)The price of Sussex stock suddenly declined in value because researchers accidentally discovered that one of the firm's products can be toxic to household pets.
E)The board of directors made an unprecedented decision to give sizeable bonuses to the firm's internal auditors for their efforts in uncovering wasteful spending.

Question

Quizplus · Accepted Answer

The expected return on a stock includes anticipated events, such as the retirement of the CEO, that are already known to the market and factored into the price of the stock. events such as unexpected resignation, labour strikes and toxic products have unexpected events which will influence the stock price while bonus given to internal auditors have nothing to do with the expected return on the stock.

Which One of the Following Events Would Be Included in the Expected