1. If the public expects a corporation to lose $5 a share this quarter and it actually loses $4, which is still the largest loss in the history of the company, what does the efficient market hypothesis say will happen to the price of the stock when the $4 loss is announced?
2. Your corporation has the following cash flows: Operating income $350,000 Interest Income 10,000 Interest Paid 45,000 Dividend Received 20,000 Dividend Paid 50,000 If the applicable income tax rate is 40% (federal and state combined), and if 70% of dividends received are exempt from taxes, what is the corporation’s tax liability? A. $ 83,980 B. $ 88,400 C, $ 92,820 D. $ 97,461 E. $192,600.