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True or false?
The existence of projects with positive expected net present values contradicts the idea that the stock market is strong-form efficient
The existence of information content in dividends contradicts the idea that the stock market is strong form efficient
1-false
2-true
Can you explain me question and answer? Thank you.If the market is strong-form efficient then shareholders will already have all relevant information (including knowing about these projects) and so the fact these projects exist does not contradict anything.
Information content in dividends means that the level of dividends is affecting shareholders expectations. If the market is strong-form efficient then this would not be the case because they already have all the information they need.
In strong market efficiency, it means shareholder have all information so they are not affected by dividends as they already know everything.
Sir, this is what you are saying, right?
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