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QUESTION

The CEO of high tech international decides to change an accounting method at the end of the current year.

If capital markets are efficient then: a. the stock price will increase due to higher profits b. the stock price will not be affected by the accounting change c. the stock price will decrease because accounting method changes are not permitted under generally accepted accounting principles d. the stock price will increase only if the accounting change will also result in higher profits in the next year.

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