Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

On the basis of interim results from a clinical trial, Merck pulled Vioxx off the market. The results indicated that patients who have been taking the drug for 18 months have twice the risk of suffering a heart attack or stroke than those taking a placebo. Vioxx had worldwide sales of $2.5 billion last year. While Merck's action was generally lauded, critics argue that earlier studies indicated this issue as well. The stock market reacted swiftly, reducing the price from $45 to $33. Merck and its investors braced for the inevitable lawsuits from those who believe they were harmed by the drug. Beyond the legal liabilities, Merck also faced challenges from expiring patents on successful drugs and the risky business of developing and marketing new drugs. (Key words: Efficient Capital Markets, Risk and Return)

1. Why did Merck's price fall so significantly? Try to incorporate concepts from session 4 and current session

2. As CEO of Merck, Raymond Gilmartin made the decision to stop sales of Vioxx. Should he have withheld this information since it would have a clear negative effect on share price and he had an obligation to maximize the value of these shares?

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M924144

Have any Question? 


Related Questions in Basic Finance

What is the expected return and standard deviation of a

What is the expected return and standard deviation of a portfolio that is invested in stocks A, B, and C? Twenty five percent of the portfolio is invested in stock A, 40 percent is invested in stock C, and the remaining ...

Toynbspcorp produces and sells pinball machines its average

Toy Corp. produces and sells pinball machines. Its average selling price is currently $5,400 per game. Based on a review of its projected financial statements, the company's variable costs are $2,800 per unit sold and to ...

Apple inc is currently equity-financed only with a beta of

Apple Inc. is currently equity-financed only with a beta of 1.1. Its tax rate is 35%. Risk-free rate and market risk premium are both 7%. Calculate the cost of equity if Apple Inc's capital structure consists of 30% debt ...

1 how has the mne evolved how have the changes in mnes

1. How has the MNE evolved? How have the changes in MNEs affected HR? 2. What are the various choices that MNEs have for entry into IB? How do the functions of HR vary with these various choices? 3. How can IHR help to e ...

A news story reported that the former ceo of homebuilder kb

A news story reported that the former CEO of homebuilder KB Home was convicted "of four felony counts in a stock option backdating scam." The article goes on to note: A stock option allows an employee to purchase a compa ...

Write 3-5 pages on the implementation of dodd-frank and the

Write 3-5 pages on the implementation of Dodd-Frank and the qualified mortgage rules in Dodd-Frank: specifically, concentrate on how small community banks have been treated relative to other institutions since the onset ...

A student remarks 135000000 shares of general electric were

A student remarks: "135,000,000 shares of General Electric were sold yesterday on the New York Stock Exchange, at an average price of $15 per share. That means General Electric just received a little over $2 billion from ...

1 although economists generally discredit mercantilism can

1. Although economists generally discredit mercantilism, can you find any examples in the popular press where politicians or business leaders use similar arguments to protect an industry? 2. Identify some products initia ...

There is an old saying on wall street sell in may and go

There is an old saying on Wall Street: "Sell in May and Go Away." This saying means that stock prices typically do not do well over the summer months. A blogger at the Wall Street Journal explains the reasoning: What's u ...

A nut having an effective length of 2 in and a 12-16 un

A nut having an effective length of 2 in. and a 1/2-16 UN thread is snug tightened and then turned 308. How much preload will that create in the bolt? Is that an acceptable preload? Describe the typical torque-turn tight ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro