On a particular day, a mining company reveals that, due to a new extraction tech

Question

On a particular day, a mining company reveals that, due to a new extraction technology, the extractible yield from several nickel/lead mines has risen by 15%. Which of the following is the LEAST likely consequence of such an announcement.

A. The price of the stock would rise due to the pressure to buy

B. Investors would determine that the estimates of the firm’s value on the date prior to the announcement were too high

C. Investors would increase their forecast of the future cash flows of that firm

D. Investors would revise their estimates of the NPV of the firm

Explanation / Answer

B. Investors would determine that the estimates of the firm’s value on the date prior to the announcement were too high

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