"Discounting" an announcement into a stock price means:
A) The market has expected it an already incorporated it into the stock's price
B) The announcement affects the future and therefore is given less weight in present terms.
C) The announcement is less relevant to the stock price than other information regarding the company.
D) The announcement affects the discount rate and therefore stock valuation in the DDM model.
E) The announcement reflects the company's unsystemic risk and doesn't affect other stock prices.

Question

Quizplus · Accepted Answer

"Discounting" an announcement into a stock price means that the market has already expected and incorporated it into the stock's price. This is because the market is always looking ahead and pricing in expected future events. Therefore, choice A is the correct answer.

"Discounting" an Announcement into a Stock Price Means