Financial Instruments disclosure Dissertation Example | Topics and Well Written Essays - 12000 words

Financial Instruments disclosure - Dissertation Example Transparency allows the users to view the implication and results of judgments, estimates and decisions undertaken by the management of an organization. Full disclosure of financial instruments refers to the exposure of all the necessary information followed while taking decisions, which would provide the investors with reasonable assurance and belief on the activities performed by the organization. Financial Statements and instruments published and issued by an organization must be comparable both with the industry standards and cross-sectional among firms over a given period of time (Pownall and Schipper, 1999, pp. 259-280). Eccher and Healy (2000), Gelb and Zarowin (2002) and Lang, Ready and Yetman (2003) investigated the relationship between accounting quality and share prices. Lang, Ready and Yetman (2003) stated from the research evidence that cross-listed firms as compared to non-cross-listed firms have higher accounting quality as the accounting data of cross-listed firms are more highly associated with price (Lang, Ready and Yetman, 2003, p.375). The relationship between share price and accounting quality is also found in different market segments around different culture, since share prices are affected by the financial disclosure of an organization. Gelb and Zarowin (2002) examined the relationship between the level of corporate disclosure of financial instruments and stock prices. This study found that organizations with more financial instruments disclosure attain higher Earnings Response Coefficient [ERC’s] (i.e. greater price information) in future as compared to organizations with less disclosure (Gelb and Zarowin, 2002, p.33). A controversial issue related to financial instruments is its valuation at fair value. Although fair value accounting is considered to be the most relevant information for predicting future cash flows, yet the reliability of the fair value measures has been questioned (Hitz, 2007, pp.323-362). Barth (1994) investig ated and found how disclosed fair value estimates of investment securities of bank, and gains and losses of securities are reflected in share price on being compared with their historical cost (Hassan and Mohd-Saleh, 2010, pp. 246-247). 1.1 Disclosure of Non-Proprietary Information Proprietary information is a type of information whose disclosure affects a company’s future earnings potentially and is beneficial to the shareholders occasionally (Dye, 1985, p.123). Managers are generally reluctant to disclose non-proprietary information about financial instruments since they feel that such disclosure may affect the annual earning and the share prices of the company (Dye, 1985, p.124). As market value of a company’s shares is affected with disclosure, so the shareholders may try to implement incentive contracts which encourage managers to suppress unfavourable information and release that information which could lead to rise in the market value of the shares. In this cont ract, when the investors are

Business math project Speech or Presentation Example | Topics and Well Written Essays - 1500 words

Business math project - Speech or Presentation Example d function implies that if the competitors come together into a merger, the resultant monopolist product may not have more brands than the merged firm may, because more brand competition is internal. Nevertheless, it is not likely that just a single brand will be developed after the competitors’ merger. Producing more brands with a wide range of prices and properties is one technique for breaking up the market demand into sets of different clients with a variety of price elasticity, which also serves to stimulate the overall market demand. The monopolist product function is made up of the quantity or the number of brands in the market, the average cost per unit of the brands produced and the price or the value of the product brands. The questions will thus be solved by inputting the prices in the Mathematica codes and then applying the demand function below: to generate the 2 dimensional plotting of the first question. In the second question, the data input in Mathematica code s will be the quantity of products. In Question 3, the data input will be the same as in question 1 but will have a fixed price of 1 in calculating the demand elasticity. Question 4 will be treated in the same way as question 2 but will have a fixed quantity of 1 to calculating the marginal cost. Question 5 will calculate the profit function as the difference between the price and the marginal cost of the products. The sixth question will produce the 3D plots of the profit function, with two input variables, the prices and the product quantities. From this, it will be possible to locate the maximum profit to answer question 9, and select the quantity and the price that produces it, to answer question 7 and 8 respectively. The study was successful in testing all the numerical questions presented. From the results generated, it was clearly evident that the price and the demand were inversely proportional. As the price increased, the demand for the products was seen to be reducing. At the same