Literature Review and Report Essay Example | Topics and Well Written Essays - 1000 words

Literature Review and Report - Essay Example The growth of wines in the market urged Fosters to move in these wine industries, and he earns more than expected compared to its previous business, the beer company. In the USA, it’s been stated that its continuous growth in the past 30 years has enjoyed and has never experienced two years of falling demand. But this summed up had changed when overcapacity in the production of wines occurred. And unfortunately, this instance is now the source of many of Foster’s problems. Beringer Blass Wine Estates (2004), for instance, consolidated some production and warehousing facilities, wrote down the book value of excess bulk wine inventory, and selected "non-strategic vineyards" in California and Australia to put up for sale. Same with what happened to Fosters when he encountered the overcapacity in his production, forcing Fosters to make changes before his wine business will automatically descends By the first half of 2003, Fosters earnings had dropped to 64 percent due to deep price cutting since other wine business, or its competitors had cut away their profit margins. The immediate fall of earnings of Fosters obliged him to cut costs levelled with the costs of its competitors. But Fosters didn’t engage immediately in planned change before its wine business got into trouble. Fosters was expecting that, sooner, the sales he produced on the preceding years will continue on the following years. But he rather experienced more difficulties and therefore cleared that Fosters needed to undergo significant changes to get back on track. The first he does was the appointment of a new chief executive, Trevor O’Hoy, which also headed the wine business. Their main focussed under the new chief executive, which are the biggest threats to Fosters successfully carrying out this change program, was focussed on cutting costs and improving efficiencies. An established company in a maturing market is

Applying the EMH Evaluate the Role That Government Played In Economic Essay

Applying the EMH Evaluate the Role That Government Played In Economic Recovery Using Recent Real-life Examples - Essay Example because of the market volatility due to the different government policy and the detailed study would tend to give a great learning opportunity about this adverse scenario. Efficient Market Hypothesis (EMH) Theory Efficient market hypothesis implies that, if any new information about a company is revealed it will be immediately incorporated into the share price rationally and rapidly, with respect to the direction of the share price movement and its size. In an efficient market except by chance, no trader will get an opportunity to earn abnormal return on a share or a return which is greater than the fair return for the risk associated to that share. The possibility of absence of abnormal profits arises because the past and current information is immediately reflected in the current share prices. The prices are affected only by the new information. EMH is concerned with under what conditions an investor can gain abnormal profits or excess returns in a stock. EMH claims that all the in formation available readily reflects in the price of the stock. According to EMH abnormal positive returns are not possible by any trader using the information available to public. Many people think that market efficiency means that it is impossible to outperform the market at any given point of time which is incorrect. Efficiency does not mean that prices will not apart from true value: At any point of time it is expected that prices will deviate from their true value, majorly because value depends on the future and future is unpredictable. Efficiency does not mean that no investor will be able to beat the market in any single time period. In an efficient market approximately one half of the shares purchased subsequently outperform not because of the skill but due to the fact that prices... This report stresses that market efficiency has been tested over a long period of time and it has been observed that movement of the stock prices follow a random walk. The random walk theory states that an investor can have a good chance of beating the market if they throw darts on New York Times stock listing pages. Investors who adhere to the random walk theory believe that searching for undervalued shares or predicting the future stock price is just a waste of time. Any new developments of government like restructuring the tax legislation, controlling the financial crisis and the inflation etc reflect in share prices of the different corporation. Followers of random walk theory believe that is impossible to predict future events and they are left with no other choice but to accept the efficient market hypothesis. This essay makes a conclusion that it cannot be denied that the government interventions play a crucial role in stabilizing the economies that were overturned due to the financial crisis as result of devaluation of properties or inability to service the debt obligations. Due to the global crisis, the investor confidence eroded which had adverse impact on the stock prices. The fluctuation in the stock prices was also due to drift in the present market condition. As a result of revised regulations and containing policies by the government, the economies started to revive and the interest of the investors were protected. This resulted in the decrease in volatility of share prices which reflects belief of the investors from their anticipation of future events in the economy. This follows the efficient market hypothesis.