...How does the stock market effect the economy? Movements in the stock market can have a profound economic impact on the economy and everyday people. A collapse in share prices has the potential to cause widespread economic disruption. Most famously, the stock market crash of 1929 was a key factor in causing the great depression of the 1930s. Yet, daily movements in the stock market can also have less impact on the economy than we might imagine. During the great recession of 2009-13, the stock market performed quite strongly. This rise in share prices was rather misleading to the state of the economy. Also, a fall in share prices doesn’t necessarily cause an economic downturn. There is a saying: Stock markets have predicted 10 out of the last 3 recessions. For example, the stock market crash of 1987, didn’t cause any lasting economic damage. (though it did influence monetary policy. UK cut interest rates in fear the stock market crash would cause a recession. Instead, low interest rates caused a boom. Plummeting share prices can make headline news. But, how much should we worry when share prices fall? How does it impact on the average consumer? and how does it affect the economy? Economic effects of the Stock Market 1. Wealth effect The first impact is that people with shares will see a fall in their wealth. If the fall is significant it will affect their financial outlook. If they are losing money on shares they will be more hesitant to spend money; this can contribute...
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...WIL Report D Semester 1, 2015 WIL Report D Semester 1, 2015...
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...PRICE SETTING Worksheet Things to Take in Consideration When Setting Price| You should consider setting prices above your competitor’s prices if…|Yes|No|?| Your market is not sensitive to price changes.|||| Your market consists mainly of growing commercial customers.|||| Your product is an integral part of an established system.|||| Your reputation for status, service, and other positive perceptions in the market increases your products’ perceived value.|||| Your customers can easily build your price into their selling price.|||| Your product is only a tiny percentage of your customers’ total costs.|||| You should consider setting your prices just below your competition if…| Your market is very sensitive to price changes.|||| Your customers need to reorder parts or supplies.|||| Your business is small enough that a lower price will not threaten your larger competitors and start a price war.|||| You have the option of economical production runs which decrease your unit cost.|||| You have not reached full production capacity.|||| Estimating Demand| 1. Which products/services do customers shop around for?| 2. Which products/services are in greater demand even at higher prices?| 3. Are certain products/services in greater demand at one time of the year than another? If so, which? And what is the duration of the demand?| 4. Do your customers expect a certain price range?| 5. What is the balance between price and quality in your market?| The Competition| ...
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...Effect Of Dividends On Stock Prices 1 EFFECT OF DIVIDENDS ON STOCK PRICES Effect of Dividends on Stock Prices– A Case of Chemical and Pharmaceutical Industry of Pakistan Kanwal Iqbal Khan University of Central Punjab, Lahore Proceedings of 2nd International Conference on Business Management (ISBN: 978-969-9368-06-6) Effect Of Dividends On Stock Prices 2 Abstract In Pakistan corporate sector is adversely facing competition due to economic downturn in the world and making efforts to survive in a competitive and uncertain economic environment. This study will help to improve dividend decisions of corporate sector through proper implementation of their dividend policies. This paper is an attempt to explain the effect of dividend announcements on stock prices of chemical and pharmaceutical industry of Pakistan. A sample of twenty five companies listed at KSE-100 Index is taken from the period of 2001to 2010. Results of this study is based on Fixed and Random Effect Model which is applied on Panel data to explain the relationship between dividends and stock prices after controlling the variables like Earnings per Share, Retention Ratio and Return on Equity. Results indicate that Cash Dividend, Retention Ratio and Return on Equity has significant positive relation with stock market prices and significantly explains the variations in the stock prices of chemical and pharmaceutical sector of Pakistan while Earnings per Share and Stock Dividends have negative insignificant...
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...Factors affecting on stock price 1. Introduction The stock market has become an essential market playing a vital role in economic prosperity that fostering capital formation and sustaining economic growth. Stock markets are more than a place to trade securities; they operate as a facilitator between savers and users of capital by means of pooling of funds, sharing risk, and transferring wealth. Stock markets are essential for economic growth as they insure the flow of resources to the most productive investment opportunities. In essence, a large number of economic variables like gross domestic product, interest rates, current account, monthly supply, employment, their information etc. have an impact on daily stock prices (Kurihara, 2006). This paper reflects how stock price is determined by considering the effect of different factors and outlines whether the internal, external and economic factors have impact on stock pricing. This study is about to know whether Dividends, paid up capital, market capital, corporate social responsibility, lawsuits, Retained Earnings, AGM, EGM, Earning Per Share, Rumors, Margin Loan, Net Income, Face Value, Return on Investment, Goodwill of the firm, Company News, Analysts Report, Sentiment, Rumors, etc. depends on stock price or merely some special factors like stock dividend, P/E ratio, government policy, macroeconomics fundamental, investors sentiment...
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...What are Share Prices? • Share prices are current prices of shares that one can purchase from the different companies participating in the share market. • Share prices may indicate how companies are doing and how external markets and investors view the performance of the companies. • Despite these market indicators, share prices alone do not give conclusive insight on how businesses are performing. Investors must also understand the underlying context of share activities in the stock market. What Affects Share Prices? Internal Factors • Companies issue dividends to their shareholders. share prices drop in the same value as the dividends paid to the company shareholders. • share bonuses that some companies give to their shareholders. Share bonuses are given in place of cash dividends. • warrants exercise to their existing shareholders. Warrants give shareholders the privilege of purchasing shares in their respective companies at a predetermined date and specified share prices. External factors • uncontrolable factors • When more investors buy shares in a company, share prices would consequently go up. On the other hand, when investors are selling shares and stocks, stock and share prices would fall down • . Competitor activities may also affect share prices. • How the media, economist and analysts perceive the market have huge impact on the share prices. • Positive perception of the trading activities on the stock...
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...one position according to the sales unit as at third quarter in 2013 (Gartner Inc. 2013). Samsung mobile have both Smartphone’s as well as featured phones. Samsung Smartphone leads the Smartphone sectors as well holding 32.1% market share. Their main competitors are Apple in Smartphone and Nokia in featured phones. Samsung Mobile highly trusts on innovations and they have introduced many innovative ideas to the mobile phone users. Their latest innovation is the Galaxy Round, a Smartphone with a curve screen. The business philosophy of Samsung Corporation is very simple and their goals include creating the best products and services and contributing the society. Purpose of the Study Customer of mobile communication largely looked for new applications to match their demand for high data range, complex applications and switch between complex network solutions. Mobile phone manufacturers are highly investing their money on research and development activities, human knowledge and creativity and intellectual assets to develop innovative solutions to enhance consumers’ expectations competitively. They have experienced that consumers always prefer new product designs with innovative ideas. Therefore, investigation of the impact of innovations on the market share will be a vital aspect of the organization because this will enable them to effective utilization of their human resources, intellectual properties, knowledge and technology. This will enable them to understand consumers’ requirements...
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...Introduction Bonia Corporation Berhad was established in 1974 and listed on the Main Market of Bursa Malaysia. The company operates in segments of manufacturing, marketing, and retailing of fashionable apparels, footwear, accessories and leather goods. Bonia Group has a network of over 700 sales outlets and 70 boutiques all over the world that include countries like Singapore, Malaysia, Japan, Taiwan, China, Thailand, Myanmar, Vietnam, Indonesia, Brunei, Philippines, Kingdom of Saudi Arabia, Syria and Oman. Successful brands such as SEMBONIA and CARLO RINO was under leading label of BONIA. There are 3 share valuation methods we used to calculate the values of the company per shares, which are I. Net Assets Method of share valuation Net asset value is a method that based on the firm’s assets. Intangible assets which including goodwill should be excluded as the intangible assets include the brand name of the company which is indefinite assets. Unless there are definite assets like patents and copyrights which has limited life, then it can be include in when using this method to calculate the values of company per share as the assets can be sold. The data use to perform the valuation are also easily available as it is based on the firm, firms that have heavy tangible investments. Year | 2006 | 2007 | 2008 | 2009 | 2010 | | RM'000 | RM'000 | RM'000 | RM'000 | RM'000 | Non-current assets | | 79,886 | | 66,240 | | 74,546 | | 88,563 | | 81,042 | Current assets...
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...and gas exploration and production company. It is a Public Sector Undertaking (PSU) of the Government of India, under the administrative control of the Ministry of Petroleum and Natural Gas. ONGC produces around 69% of India's crude oil. On 31 March 2013, its market capitalisation was INR 2.6 trillion (US$ 48.98 billion), making it India's second largest publicly traded company. In a government survey for FY 2011-12, it was ranked as the largest profit making PSU in India. ONGC has been ranked 357th in the Fortune Global 500 list of the world's biggest corporations for the year 2012. It is ranked 22nd among the Top 250 Global Energy Companies by Platts. ONGC was founded on 14 August 1956 by Government of India, which currently holds a 69.23% equity stake. It is involved in exploring for and exploiting hydrocarbons in 26 sedimentary basins of India, and owns and operates over 11,000 kilometers of pipelines in the country. Its international subsidiary ONGC Videsh currently has projects in 15 countries. ONGC has discovered 6 of the 7 commercially-producing Indian Basins, in the last 50 years, adding over 7.1 billion tonnes of In-place Oil & Gas volume of hydrocarbons in Indian basins. During FY 2012-13, ONGC had to share the highest ever under-recovery of INR 494.2 million (an increase of INR 49.6 billion over the previous financial year) towards the under-recoveries of Oil Marketing Companies (IOC, BPCL and HPCL). ONGC FROM 1961 TO 2000: Since its inception, ONGC has been...
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...INTRODUCTION Investment instrument is a document such as bond and share certificate that has monetary value through agreement that agrees make payment of money to another parties for purpose gain equity capital or loan capital. An investment instrument give a promise of earnings and return to the holders or recipient. It also called as financing instruments. There are three common types of investment instruments in the market which are money markets, bonds and common shares. Money market is the short-term loan market which is less than one year maturities with relatively liquid and low-risk debt due to short duration. Governments and large corporations are usually issued the money market securities in forms of banker’s acceptance, certificates of deposit and commercial papers. The money market instruments have a lower risk compare to others instruments. As a result of lower risk and relatively liquid instrument, thus money market instruments get a lower return compared to others investment. Money markets also called as cash investment. Bond is a long-term debt instruments which is more than one year maturities with the purpose of lend money for raising capital at specific period at fixed interest rate. Bonds are usually used by companies or government to finance a different type of activities and project. The risk level of bond instrument is considered lower risk than common shares. However, if an investor investing in junk bonds can be very risky to investor. The return of...
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...approximately 26 supermarkets across the country for the month of April. The firm will attempt to pinpoint an estimate of our consumer demand to aid us in making our next move. First, we will compute the elasticities of all independent variables in our demand regression equation: QD= -5200-42P+20Px+5.2I+0.2A+0.25M. Those independent variables include quantity demanded, price of our product, price of the competitor’s product, income, advertising expenditures, and microwave oven sales. We will determine what is the best short and long-term pricing strategies moving forward as well as determine if we should cut our prices. The firm will identify all factors that could potentially impact our business both positively and negatively in terms of both demand and supply for our low-calorie, frozen microwavable food. Elasticities of Independent Variables In order to accurately estimate the consumer demand for our low-calorie, frozen microwavable food, we must first find the elasticity of each of the independent variables listed. However, before we can find elasticity, we must first determine the quantity demanded. We are told that the price of our product is 500 cents for a 3-pack (P). Our income based on the standard metropolitan area is $5,500 (I). Our competitors charge 600 cents for a 3-pack (Px). We spend $10,000 monthly on advertising expenses (A). The standard metropolitan area that has the 26 supermarkets sells 5,000 microwave ovens (M). The demand equation would come out to be: Q = -5200-42(500)+20(600)+5...
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...Options Markets Options Markets Prepared By: Daniel Bielewicz Jomark Manglicmot Juan Mendez December 1, 2014 Prepared By: Daniel Bielewicz Jomark Manglicmot Juan Mendez December 1, 2014 Table of Contents Page Introduction 2 Options Market 2 Market Makers 4 Equity Market 6 Conclusion 9 Works Cited 10 Introduction The options market is directly linked to the U.S. economy in many ways. It plays a huge role in various markets and institutions and is reflective of its underlying assets. In this case we will discuss the various issues regarding the options market and how it affects U.S. markets and institutions. This includes a breakdown of the options market, the market makers’ role, and how the options market affects the equity market. Options Market Nowadays, many investors’ portfolios include investments such as mutual funds, stocks, and bonds. But that is not all there is for investors to invest in. Another method of investment is called options, and it brings a world of opportunities for investors. However, options are complex securities and can be extremely risky. Options, as the name implies, give the option to the buyer to either sell or buy a stock for a given price. The right to buy stock at a given price is called a “call option” and the right to sell it is called “put option”. Options were designed to take advantage of the volatility in the market and are used by investors to speculate...
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...management is described in different market structures. Just as it pertains to any for-profit business organization, the goal is to cut and maximize profits in each type of market structure. Based on the information provided in the simulation, Quasar Computers were involved in an extensive research in developing a pioneer product “the Optical Notebook.” In 2003, the company launched the first all-optical notebook computer and branded it the “Neutron”. This product is described as an energy saving optical technology with its rechargeable batteries capable of lasting up to three days; hence, transcending it into a leading technological product in its unique class. With the assistance of senior executives in the company, the decisions on operational and business strategies relative to a variety of market conditions are taken and discussed. Monopoly Quasar emerged as the only player in the market for its unique optical notebook computer; therefore, establishing a monopoly market structure. Within this monopolist market structure, maximizing profit tends to occur at the point where marginal cost equals marginal revenue based on the result shown by toggling the demand curve. In the initial scenario, it was presented that Quasar had the patent rights on all-optical technology for three years from the launch year leaving the company faced with the objective of maximizing profit in this monopolistic situation. In order to accomplish this, the price per unit is set at $2,550.00, as this...
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...is a dominant player of most smokeless tobacco, or most sniff, controlling approximately 77%. Also, UST expanded the category and continued to rise prices, smaller players eroded UST’s market share primarily by cutting price. However, it is not able to compete and against price-value brands. (which raised small companies concerns) price-value brands. P.64 d) The EPA report classifying environmental Tobacco smoke as a known human carcinogen. e) There is chance that hard to expand the tobacco to international market due to cultural issues tobacco 2) Evaluate the business risks of UST from the viewpoint of a credit analyst or potential bondholder. Issue a,b) UST had seven pending health related lawsuits at the end of 1998, which is uncertain about the result. It the company lost in the lawsuit, it will lost lots of money. Also, the tobacco will be push by the new law of settle state Medicaid, which prevents youth to use tobacco. Since there are lots of litigation and research against tobacco companies, it will affect the tobacco industry development in the future then affect the future cash flow of UST more risky. Issue c) The UST sales strategy of launching similar product is not able to against with the price –value brands. On the other hand, it still rise the price while the business is performing well in the sales market....
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...OF STOCK SPLIT ON MARKET PRICES OF SHARES Introduction & Overview: In today's financial markets, the distinction between stocks and shares has been somewhat blurred. Generally, these words are used interchangeably to refer to the pieces of paper that denote ownership in a particular company, called stock certificates. However, the difference between the two words comes from the context in which they are used. For example, "stock" is a general term used to describe the ownership certificates of any company, in general, and "shares" refers to a the ownership certificates of a particular company. So, if investors say they own stocks, they are generally referring to their overall ownership in one or more companies. Technically, if someone says that they own shares - the question then becomes - shares in what company? Bottom line, stocks and shares are the same thing. The minor distinction between stocks and shares is usually overlooked, and it has more to do with syntax than financial or legal accuracy. A stock split or stock divide increases the number of shares in a public company. The price is adjusted such that the before and after market capitalization of the company remains the same and dilution does not occur. Options and warrants are included. Take, for example, a company with 100 shares of stock priced at $50 per share. The market capitalization is 100 × $50, or $5000. The company splits its stock 2-for-1. There are now 200 shares of stock and each...
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