The following is a critical review of such literature. In addition, the discussion applies a synthesis of two approaches/models identified to predict the share prices for Tesco Plc from the publications of the firm’s financial statements for 2008 and 2009. Lastly, this discussion attempts to test the approach by comparing these two sets of predictions with actual share prices. A concluding remark, which comments on the results, winds up the paper. Approaches/Models for Predicting Share Prices In short-term or medium-term, different models or approaches are used in predicting the future prices of shares of various companies. Share prices of companies may take different forms such as linear, horizontal, cyclic, or seasonal as influenced by prevailing market and environmental factors (Hassan, et al., 2007). Due to lack of prediction methods that provide least prediction error, investors tend to apply numerous methods thereby comparing their results in a bid to finding the best model or approach to use (Chen, et al., 2003). ...Show more
Share Price Prediction and Analysis Institution Date Introduction Share valuation is the process of calculated the actual value of a given company through the use of its shares. Share valuation helps investors understand not only the performance of a given organization but also make appropriate decisions in as far as investment is concerned (Chen, et al., 2003)…
Analysis is based on the following principles, By analyzing the log returns, the key data that stood out was that the max value was generated by FTSE MID 250 (0.580766) and the minimum return generated was by MILAN COMIT GENERAL (-0.006832. The lowest mean value was generated by BRUSSELS ALL SHARE (-.00319).
The price of share of various companies may be influenced by several factors such as economic conditions, government and market regulations. Political climate, influence from directors, dividend policies, bank rates, environmental forces such as demand and supply, rates charged by banks among other factor (Fisher, 1961).
This aspect is examined below.
It was not until the late 1960s and early 1970s that a fully-developed, empirically-supported theory of share prices' behavior emerged in the form of the Efficient Markets Hypothesis (EMH).Prior to the development of the EMH , analysts assumed some degree of dependence across successful price changes.
The author states that providing dividends to the share holders in the form of cash is dragging out the money available in the firm and therefore the market capitalization of the firm should reduce by the same amount as the total dividends given, because the market capitalization is directly related to the share price.
Innovative techniques should be employed to ensure fairness in pricing to minimize risk to the government (Cibinic, Nash & Nagle, 2006). This is by using contract information that is currently available in the market or historical. A
So in order to prevent this problem of overpayment, analysis of pricing is very much needed so that actual amount of price can be paid without incurring losses. To compare different techniques to analyze prices, Federal Acquisition Regulation
Price Analysis Techniques usually involve a great deal of comparison, either with similar items and catalog prices or with own estimates of costs (Murphy 2009).
When it comes to finding the most reasonable price for your required good or service, a consumer has a number
The company also concentrates on investing money in renewable energy sources. BP PLC is divided into two segments, namely refining and marketing; and exploration and production. It is noticed that the share price of the company has
The reason behind choosing GSK for this particular essay pertains to the fact that it is one of the largest companies in pharmaceutical industry, whose market capitalization is notable and competitive in
According to the author, OPEC, the cartel of chief global oil producers, has at many times being stepping in to stabilize the prices by cutting production. This time round OPEC said that it was not willing to do so even if the oil slumped to $20 a barrel. The future markets indicate the prices will recuperate slowly to reach about $70 by 2019.
1 pages (250 words)Essay
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