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1. Case study instructions Kindly peruse and analyze the case thoroughly so you can answer...

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Finance

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1. Case study instructions Kindly peruse and analyze the case thoroughly so you can answer any questions from the this case study. Please make limited but reasonable assumptions where necessary. Financial economists state it more simply "A security's price fully reflects all available information in an efficient market. Amazon Company Limited has just announced a 4-for-1 stock split, effective immediately. Prior to the split, the company had a market value of GHC 6 billion with 200 million shares outstanding. Assuming that the split conveys no new information about the company. Two years after, Amazon Company Limited recorded a huge loss leading to bankruptcy. a) If the actual market price immediately following the split is GHC 18.00/share, what does this tell us about market efficiency? [5 Marks ] b) How is it possible that a firm can announce a record-breaking loss, yet its stock price rises when the announcement is made? [5 Marks] c) Explain what the market reaction will be in an efficient market if a firm announces a fully anticipated filing for bankruptcy? (5 Marks] [15 Marks]

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