Edison Ltd, a publicly listed electric car manufacturer, is being sued by one of their...
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Accounting
Edison Ltd, a publicly listed electric car manufacturer, is being sued by one of their customers. The customer is claiming compensation for the loss of their house after an electric car manufactured by Edison exploded while charging in the customers garage. If found guilty Edison will have to pay a significant amount in compensation. Edison denies all responsibility, but they are aware their batteries tend to overheat when charging. Thus far Edison has been able to keep this lawsuit quiet; no outside parties have learned about it yet. Edison does comply with all relevant accounting standards. Assuming semi-strong market efficiency, this lawsuit will influence the market price of Edison shares when its next financial statements are released if the lawsuit is disclosed.
(a) True or false?
(b) Give brief reasons for your answer
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