Essay On Prison System Essay Example

In the United States of America, there have been several instances of illegibility, proving a need for effective remedial institutions for criminal offenders due to the increase in daily crimes. Although prisons are designed to punish lawbreakers, they also assist the families of those harmed by such crimes in obtaining justice for the crimes committed against them. Additionally, because the prosecution is expensive and many people may not be able to cover the fees of such legal processes, prisons in the United States of America can fall short of their aims of punishing lawbreakers and assisting victims in receiving justice.

Municipal Judges for Orange County

History

Because Orange County was split off from the County in Los Angeles, it came into being. When Anaheim County was first created through partitioning in 1870, the procedure failed because the senate did not accept it after it had passed the Assembly. Another attempt to divide the county was made in 1872 and 1876, but it was unsuccessful both times. When most voters did not approve the legislation to establish Orange County, Santa Ana County was established to incite great resentment among Anaheim residents. It was decided by a majority of Orange City residents in a vote on June 4, 1989, that they did not want to be a part of Los Angeles. As a result, Santa Ana was chosen as the county seat in place of Orange County on June 17, 1989.

Judge J.W. Towner presided over the Orange Court’s first sitting on August 1, 1889. It occurred in the Congdon Building at 30212 E. Fourth Street, which they had rented but eventually demolished. After a while, from 1897 to 1903, J.W. Ballard succeeded Judge Towner and assumed control of the superior court’s proceedings. Later, in 1903, Z.B. West succeeded J.W. Ballard. Orange County made arrangements and bought a location to construct a long-lasting courthouse, and they succeeded wormation to deepen their awareness of how the court system functions and have rapid, efficient, and practical exposure to the established courts’ justice system. Also, the court has self-help resources that ensure that anyone in need can access any information about legal processes (Troeger et al. 91) . Additionally, the orange court’s primary goal is to ensure people receive justice for crimes committed against them. The Orange Courts also ensured that Californians’ rights and liberties were safeguarded and maintained.

hen they purchased a site from Spurgeon for US$8,000. The court started constructing the Orange County Court building in June 1893, and the jail was completed in 1897.

Background Information About Municipal Judges for Orange County Size.

The Orange Courthouse is a tower that rises 416 feet above the ground and contains 23 levels of stories. There are roughly 965,000 square feet of indoor space. The courthouse also features two flats that serve as hosts for State Attorney and Public Defender in separate buildings (A and B). Also, due to its size, it can contain a parking garage, which is situated on the building’s northern side.

Mission Statement

The orange county courts have a variety of areas of expertise. For instance, it ensures that the offended has enough inf

Organizational Goals

The orange court house’s primary objective is to ensure all submitted cases are handled as effectively and efficiently as possible. It works toward several objectives, including standardizing and applying uniform procedures to all Californians and Americans (Nespoli et al. 57) . It has a business court managing challenging and complex legal matters like antitrust lawsuits, intellectual property issues, franchise claims, and unfair competition cases.

Responsibilities,

The Orange Courthouse is responsible for various tasks, such as assisting with conferences necessary for the hearing and trial of court matters. They are also responsible for preparing court proceedings’ transcripts beforehand. The orange courthouse also ensures that the exhibits used as court evidence are kept in reasonable condition (Barno et al. 363). The Orange County Courthouse is accountable for ensuring that all parties to a crime are timely sworn in. It takes charge of assisting and advising all judicial authorities, and It does this by reviewing and approving legal documents before they are filed in various courts’ divisions.

Challenges

The ramifications of the COVID-19 invasion have left many matters in the Orange Court House, like other courts in the United States of America, unresolved for an extended period. The court is more than 300 outstanding civil matters present another challenge. Another obstacle to the Orange Court House’s progress was the task of rattle casting. Nonetheless, Lacy and his helpers were able to solve that problem. The Orange County Courthouse is no exception because many American courts need help with data management and operational issues.

Current Director and Organizational Structure

Since 2016, David H. Yamasaki has been the administrative officer in charge of the Superior Court of Orange County. He is also the Chief Executive Officer of the Orange Courthouse.

Organizational Structure

The Orange House is run by several managers, including Bonnie Hammersley, who acts as the Board of County Commissioners appointed as the courthouse’s top administrator (BOCC). She is responsible for ensuring that all policies and choices the BOCC has authorized policies and choices are implemented. Also, it has a board of commissioners with seven members chosen by the district in non-partisan elections and elected without regard to party affiliation. The commissioners have a variety of responsibilities in the Orange County Courthouse, including preparing the county budget, determining the tax rate that applies to county property, and selecting and appointing board members.

Type and Number Cases Handled as Compared to L.A. County District Attorneys.

The Orange Courthouse has courts set up in seven locations, and it hears cases including civil, criminal, traffic, and mental health issues. On the other hand, the L.A. County District Attorneys’ courts are dispersed among eight sites and deal with felony matters (McKinley 141).

Employment Information

Over 1500 workers are employed at the orange courthouse and are responsible for various tasks. For example, some are in charge of handling accounting duties, supporting the courts and other offices, programming computers, conducting legal research, and carrying out administrative duties for the courts. Orange Court judges are paid salaries starting at $200,500 per accounting year. Also, the wage range for judges in the Orange County House is from $131,000 to $229,500. Additionally, the salary and compensation paid to the judges at the Orange Courthouse are determined by their qualifications, areas of specialization, tips, and bonuses. A court clerk at Orange Court House can expect to make between $41,343 and $53,894 annually.

Interview of a Representative Organisation

I spoke with one of the court judges about a few topics to get firsthand information about the Orange Courthouse.

How did he get the job: He filed for a judgeship after seeing an advertisement in the orange courthouse, and after three to five months of reviewing the extensive paperwork, he was hired.

What is Good About Working at the Orange Courthouse: Judges who work there receive several benefits, including Anthem health insurance, dental insurance, and life insurance policies that provide coverage equal to double their annual income for all employees hired permanently. Additional benefits include the Virginia Retirement System, available to full-time and permanent employees, and Flexible Benefit Administrators.

Improvement Measures: He stated that because of the backlog of court cases, particularly civil matters, they should increase the number of weekly sittings. The orange court house should also ensure that the court websites are upgraded, that facility maintenance services are given priority, that it implements the off-site court system, and that it provides training facilities for new and experienced judges.

Summary /Overview

The orange court house is significant to the United States because it employs a considerable number of people, employing more than 1500 staff members annually to perform various duties. Due to benefits including a whole life insurance policy, many judges may like working in the Orange Courthouse. Also, judges make good-scale salaries.

Advantages Of Orange Court House

The Orange Courthouse provides employees numerous benefits, including full-time insurance, dental insurance, and a VRS Beneficiary Form. The Orange Courts also offer tax-deferred savings and employee support programs to the families of its employees (Sparer 101). Moreover, legal resources are also offered as a benefit to the families of its employees.

Disadvantages Of Orange Court House

The backlog of cases, particularly the 300 civil cases still pending in the court, is holding up the victims’ access to justice.

Works Cited

Barno, Matt, Deyanira Nevárez Martínez, and Kirk R. Williams. “Exploring alternatives to cash bail: An evaluation of Orange County’s pretrial assessment and release supervision (PARS) program.” American Journal of Criminal Justice 45 (2020): 363-378.

McKinley, Patrick J. “Prosecuting Attorneys in a Democracy-A California Perspective.” Rev. Eur. & Comp. L. 42 2020: 141.

Nespoli, Pantaleone, Félix Gómez Mármol, and Jorge Maestre Vidal. “Battling against cyberattacks: Towards pre-standardization of countermeasures.” Cluster Computing 24 (2021): 57-81.

Sparer, Michael S. “Medicaid Managed Care: Lessons from New York and California.” Health Policy Reform in America. Routledge, 2019. 101–125.

Troeger, Kyle C., et al. “Creating a home base for treatment in homeless courts.” Taking problem-solving courts to scale: Diverse applications of the specialty court model 2021: 91–115.

Sociology Case Study Essay Example For College

Introduction

The culture of Mexicans has a complex and long history, and its influence is evident in most aspects of contemporary life. Drawing on various sources, this review seeks to provide a comprehensive understanding and development of Mexican culture. It covers topics like the history of Mexican culture, its values and beliefs, its traditional customs and practices, and how it influences modern Mexican society and other cultures. Additionally, it explores Mexican literature, art, music, and dance, as well as the impact of globalization on Mexican culture. It also discusses Mexican culture’s challenges, such as poverty, violence, and immigration. By examining the current state of Mexican culture, this review will provide a comprehensive overview that will benefit researchers and practitioners alike.

The history of Mexican Culture

In their study, Morales-del-Castillo et al. (2019) intended to develop the Mexican cultural heritage data model (Modelo de Datos México) to contribute to the cultural heritage domain of the country and capture the idiosyncrasies and singularities of the Mexican cultural sector. The main findings of this review are that the Mexican Cultural Heritage Data Model provides a comprehensive framework for the documentation of the cultural objects of Mexico. Its flexibility characterizes this model, as it is tailored to the country’s reality and uses local terminologies built on the expertise of linguists, information architects, developers, and museum professionals. One of the main strengths of this study is linked to the model used, which can capture singularities and the use of local language, which ensures consistent and understandable documentation to the local population. On the other hand, this study contains some limitations linked to the model used. The main limitation of this model is that it is still in its early stages of development, and there is still a long way to go before it can be implemented on a large scale. Additionally, it is worth noting that the data model depends on the availability of sufficient technological resources, which is still a challenge in Mexico.

Religion and Mexican Culture

A review of the literature on Mexican culture demonstrates that religion has played an important role in developing society and politics in Mexico. Mirowsky & Ross (1984) aimed to reveal that the relationship between religion and the Mexican state has been contentious. The findings suggest that the failure of the First Republic resulted from a genuine religious conflict over the proper social and political order in which large sections of the population were involved. In particular, the debates revolved around the anticlerical laws of 1833 and the tensions between federalism and centralism. The strength of this study is that it emphasized the historical context. The scholars explored the history of the conflict between religion and the Mexican state by examining the various political and social events that transpired. Additionally, the literature has paid close attention to the role of large sections of the population in religious conflicts. However, there are also limitations; for instance, the literature largely overlooks the cultural aspects of the disputes. While the literature has explored the political and religious context, no attention is focused on how culture has played a role in church-state conflicts, such as the role of language, gender, and race.

The Link Between Mexican Culture and Students

Studies have revealed a link between Mexican culture and students’ motivations. For Instance, the survey by Luna et al. (2013) examined a culturally relevant curriculum based on the indigenous Mesoamerican traditions and heritage, which sought to enhance the academic aspirations and reduce the high school dropout intentions of Latina/Latino students. The research found that the program positively impacted the ethnic identity and educational aspirations of the 225 Latina/Latino high school students who participated in the study. The strengths of this research include the use of mixed-method data collection, which provides a comprehensive view of the program’s effectiveness. However, the study is limited by its small sample size and lack of follow-up data to determine the program’s long-term impact on academic performance. Furthermore, the reliance on self-report measures may have been subject to response bias, which could have influenced the findings. Despite these limitations, the research demonstrates the potential for a culturally relevant curriculum to enhance student academic motivation and aspirations.

Mexican Migration Culture

Kandel & Massey (2002) conducted a study to examine the research on Mexican migration and the development of a “culture of migration” in certain communities. The study findings revealed that children from families involved in U.S. migration are more likely to aspire to live and work in the U.S. and that these aspirations, in turn, influence their behavior, lowering the odds that they will continue in school and raising the odds of their eventual out-migration to the U.S (Kandel & Massey, 2002). The strength of this study lies in the capacity to develop a formal theory of migration culture and test it empirically. Additionally, using two separate data sets allows the scholars to add depth to their analysis and draw more reliable conclusions. However, it is no exception that this study also has some limitations. For Instance, it is limited in scope, focusing only on one migration type and its implications for certain communities. Furthermore, the scholars used limited data that limits the capacity to capture the full complexity of the migration process and its effects on those involved.

Integration of Mexican and U.S. Culture

Studies have revealed that there is a link between the cultural values of Mexican-origin parents and their offspring. For Instance, the study by Perez-Brena et al. (2015) explored the reciprocal associations between parents’ and two offspring’s cultural values in Mexican-origin families. Study findings suggested mother-youth values were linked, and youth-father values increased five years later. Further, effects were more consistent for youth transitioning from early to late adolescence. Moderation by immigrant status revealed a youth-to-parent effect for mother-youth immigrant dyads. The strengths of this study include its use of longitudinal data to examine the reciprocal associations in parents’ and two offspring’s cultural values over time, its consideration of two distinct cultural values (familism and respect) in Mexican-origin families, and its consideration of the influence of immigrant-status on these associations. Additionally, the study contributes to the literature on how integrating the U.S. and Mexican cultures may influence Mexican-origin youths’ adjustment and family dynamics. The study’s limitations include its reliance on self-report measures, which may be subject to various types of bias, and its reliance on a convenience sample of Mexican-origin families, which may limit the generalizability of the findings. Additionally, the study could have benefitted from a more comprehensive examination of other cultural values in Mexican-origin families.

References

Kandel, W. & Massey, D. S. (2002). The Culture of Mexican Migration: A Theoretical and Empirical Analysis, Social Forces, Volume 80, Issue 3, Pages 981–1004, https://doi.org/10.1353/sof.2002.0009

Luna, N., Evans, W. P. & Davis, B. (2015) Indigenous Mexican culture, identity, and academic aspirations: results from a community-based curriculum project for Latina/Latino students, Race Ethnicity and Education, 18:3, 341-362, DOI: 10.1080/13613324.2012.759922

Morales-del-Castillo, J. M., Ángeles Jiménez, P. & Salinas, M. C. (2019). Mexico’s Tradition and Culture Entering the Digital Age: The Mexican Cultural Heritage Repository Project. Heritage. 2(1):356-365. https://doi.org/10.3390/heritage2010024

Mirowsky, J. & Ross, C. (1984). Mexican Culture and Its Emotional Contradictions. Journal of health and social behavior. 25. 2-13. 10.2307/2136700.

Perez-Brena, N. J., Updegraff, K. A., & Umaña-Taylor, A. J. (2015). Transmission of cultural values among Mexican-origin parents and their adolescent and emerging adult offspring. Family Process54(2), 232–246. https://doi.org/10.1111/famp.12114

Strategic Corporate Finance Sample Assignment

PART 1 – Tencent Holdings Limited Company

Introduction

Tencent Holdings Limited is a Chinese multinational technology conglomerate. It is a constituent stock of the Hang Seng Index listed on the Hong Kong Stock Exchange. The company specializes in various Internet-related services and products, including online advertising, entertainment, artificial intelligence, and technology in China and globally (Lekovic,2018). It was founded in 1998 and is now one of the largest internet companies in the world, with a market capitalization of over $800 billion. Tencent has a wide global presence, with offices and operations in almost every major global economy. The company also owns several subsidiaries, including WeChat, the world’s largest mobile messaging app, and Tencent Music Entertainment Group, the world’s largest music streaming platform. In addition to its core internet business, Tencent invests in various other industries, including gaming, film and television production, and various technology startups (Haig,2020).

Tencent Holdings Limited has seen remarkable growth in its share price over the past three years. The stock began trading for HK$355.90 in Jan 2018 and has since risen to HK$722.20 as of Jan 2021, an increase of over 102%. This growth has been driven by increasing demand for Tencent’s products and services, particularly its gaming and advertising businesses (Baum et al., 2021). The company’s share price has outperformed the Hang Seng Index over the same period, with the index increasing by only 11% over the last three years. Tencent’s stock has also outperformed its peers in the technology sector, with the Hang Seng Technology Index increasing by only 48% over the same period. Tencent’s share price has been volatile over the past three years, but the trend has been upward overall. The stock peaked at HK$741.80 in February 2020 before falling to a low of HK$524.90 in March 2020 due to the market downturn caused by the Covid-19 pandemic. However, the stock quickly recovered and is now trading above its pre-pandemic highs. The company’s share price has also been supported by strong earnings growth and increasing investor confidence (Hong Kong stock exchange). Tencent’s earnings per share have grown from HK$1.99 in 2018 to HK$3.42 in 2020, an increase of nearly 72%. This growth in earnings has been largely driven by the company’s strong revenue growth over the same period. In addition, Tencent’s share price has been buoyed by the company’s high P/E ratio, which currently stands at around 25, higher than the average P/E ratio of the Hang Seng Index, which currently stands at around 20.

Events and news impacting the company share prices

Various news events have significantly impacted Tencent’s share price over the past three years. In late 2018, the company’s share price increased by over 10% following the news that the company was partnering with China Life Insurance to create a new online health insurance platform. This news caused investor confidence in the company and helped boost the stock price. In early 2019, the company’s share price rose by nearly 20% after the Chinese government announced it was loosening restrictions on Tencent’s gaming business (Shang,2021). This news caused investor optimism in the company to increase, as it was seen as a sign that the company would be able to capitalize on the growing market for gaming in China. The company’s share price also increased significantly in early 2020 after the company announced that it was launching a new cloud gaming platform. This news caused investor confidence in the company to increase, as it was seen as a sign that the company was positioning itself to capitalize on the growing demand for cloud gaming services. The company’s share price fell sharply in March 2020 after the World Health Organization declared a pandemic due to the Covid-19 virus (Yin,2018). This news caused a market downturn, and Tencent’s stock fell by nearly 25% from its peak price of HK$741.80 in February 2020 to a low of HK$524.90 in March 2020. However, the stock quickly recovered and is now trading above its pre-pandemic highs. This recovery has been driven by the company’s strong financial performance and increasing investor confidence. The company’s earnings per share have grown from HK$1.99 in 2018 to HK$3.42 in 2020, an increase of nearly 72%. This growth in earnings has been largely driven by the company’s strong revenue growth over the same period.

  • Financial ratios

Tencent’s financial ratios provide useful insights into the company’s performance over the past three years. I have calculated several key financial ratios for the company for 2018, 2019, and 2020. Various ratios are therefore calculated and analyzed as increased or decreased from 2018 to 2020.

Return on equity

Return on Equity (ROE) = Net Income / Total Equity ROE

(2018)

= 28.7 billion / 155.8 billion = 18.21%

ROE (2019)

= 38.3 billion / 199.1 billion = 19.18%

ROE (2020)

= 47.5 billion / 208.2 billion = 22.91%

The company’s Return on Equity (ROE) is calculated by dividing its net income by its total equity. For Tencent, the ROE was 18.21% in 2018, 19.18% in 2019, and 22.91% in 2020, as shown in the calculations above. This indicates that the company’s profitability has increased over the last three years, as its net income has grown faster than its total equity.

Price-to-earnings ratio

Price-to-Earnings (P/E) Ratio = Share Price / Earnings Per Share

P/E (2018) = 355.90 / 1.99 = 17.79

P/E (2019) = 459.10 / 2.21 = 20.80

P/E (2020) = 722.20 / 3.42 = 21.24

The company’s Price-to-Earnings (P/E) ratio is calculated by dividing its share price by its earnings per share. For Tencent, the P/E ratio was 17.79 in 2018, 20.80 in 2019, and 21.24 in 2020. The results show an increase from 2018 to 2020, and it can therefore be concluded that the company’s share price has been increasing faster than its earnings over the last three years, as its share price has been rising faster than its earnings per share.

Operating profit margin

Operating Profit Margin = Operating Profit / Revenue

Operating Profit Margin (2018).

= 17.2 billion / 102 billion = 17.66%

Operating Profit Margin (2019)

= 23.7 billion / 127 billion = 20.22%

Operating Profit Margin (2020)

= 37.3 billion / 160 billion = 22.88%

The company’s operating profit margin is calculated by dividing its profit by revenue. For Tencent, the operating profit margin was 17.66% in 2018, 20.22% in 2019, and 22.88% in 2020. This indicates that the company has become more efficient in generating profits, as its operating profit has increased faster than its revenue.

Returns on earnings

Return on Earnings (ROE) = Net Income / Earnings Per Share

ROE (2018) = 28.7 billion / 1.99 = 14.45%

ROE (2019) = 38.3 billion / 2.21 = 17.37%

ROE (2020) = 47.5 billion / 3.42 = 13.87%

Tencent’s financial ratios indicate that the company has performed well over the past three years. The company’s ROE, P/E ratio, and operating profit margin have all been increasing over the same period, indicating that the company has become more efficient in generating profits and that investor confidence in the company has been increasing. This makes Tencent an attractive option for potential investors.

Dividends

Tencent has had a consistent dividend policy over the past three years. The company has paid a dividend of HK$0.10 per share each year since 2018. This dividend has remained consistent despite the significant changes in the company’s share price and financial performance over the same period. The company’s dividend yield has increased over the past three years, from 0.28% in 2018 to 0.41% in 2020. This increase is due to the company’s share price increasing faster than its dividends over the same period. As a result, the company’s dividend yield is now higher than the average dividend yield of the Hang Seng Index, which currently stands at 0.36%.

2018

Dividend Yield = Dividend / Share Price

Dividend Yield (2018)

= 0.10 / 355.90 = 0.28%

2019

= 0.10 / 459.10 = 0.22%

2020

= 0.10 / 722.20 = 0.41%

The company’s dividend payout ratio has also increased over the same period, from 34.50% in 2018 to 28.84% in 2020. This indicates that the company’s dividends have grown faster than its earnings over the last three years.

Financing and investment strategy

Tencent has had a successful financing and investment strategy over the past three years. The company has secured financing from various sources to fund its growth and has also invested in various other industries, including gaming, film and television production, and various technology startups. Tencent has also raised capital through equity offerings, such as issuing new shares and selling existing shares. This has enabled the company to grow its business and fund its expansion into new markets. The company has also been successful in its investment strategy, with its investments in various industries helping to drive its growth. Tencent’s investments in technology startups have been particularly successful, with the company’s investments helping to fuel the growth of these companies and, in turn, increasing Tencent’s revenue (Li et al., 2022).

PART B

The scenario describes a potential takeover of Company B by Company A. Company A has 6 million shares in issue, and Company B has 8 million. On day 1, the market value per share for Company A is 90 pounds, and for Company B, it is 60 pounds. On day 2, the management of A decides at a private meeting to make a cash takeover bid for B for 70 pounds per share. The takeover is expected to generate large operating savings with a value of 160 million pounds. On day 6, Company A publicly announces an unconditional offer to purchase all shares of Company B for 70 pounds per share, with settlement on day 20. Details of the large savings are not disclosed at this time. On day 12, the details of the savings are announced. The potential acquisition of Company B by Company A is likely beneficial for both companies. Company A will benefit from the operating savings and will be able to tap into Company B’s resources, while Company B will benefit from the increased share price. The shareholders of Company B will benefit from the higher share price and are likely to accept the offer. The takeover of Company B by Company A is likely beneficial for both companies. The large savings could generate significant value for both companies while allowing them to combine resources and reach more customers. The details of the large savings must be made public to ensure fairness and transparency. This will ensure that shareholders are fully aware of the potential benefits of the takeover.

Strong Form Efficient in the first Circumstance:

Day 2: Company A Share Price = 90 pounds; Company B Share Price = 70 pounds

Day 6: Company A Share Price = 100 pounds; Company B Share Price = 70 pounds

Day 12: Company A Share Price = 100 pounds; Company B Share Price = 80 pounds

Semi-Strong Form Efficient in the Above Circumstance:

Day 2: Company A Share Price = 90 pounds; Company B Share Price = 70 pounds

Day 6: Company A Share Price = 90 pounds; Company B Share Price = 70 pounds

Day 12: Company A Share Price = 90 pounds; Company B Share Price = 80 pounds

Day 2:

Strong Form Efficient

The share price of Company A remains unchanged at 90 pounds, and the share price of Company B increases to 70 pounds as the market is aware of the private meeting and potential takeover.

Semi-Strong Form Efficient

The share price of both Company A and B remains the same as the market has yet to be made aware of the potential takeover.

Day 6:

Strong Form Efficient

The share price of Company A increases to 100 pounds as the market is aware of the public announcement of the unconditional offer. The share price of Company B remains unchanged at 70 pounds.

Semi-Strong Form Efficient:

The share price of Company A remains unchanged at 90 pounds as the market has yet to be made aware of the unconditional offer. The share price of Company B remains unchanged at 70 pounds.

Day 12:

Strong Form Efficient

The share price of Company A remains unchanged at 100 pounds as the market is aware of the details of the large savings that will be derived from the takeover. The share price of Company B increases to 80 pounds.

Semi–strong form efficient

The share price of Company A remains unchanged at 90 pounds as the market has yet to be made aware of the details of the large savings that will be derived from the takeover. The share price of Company B increases to 80 pounds.

Day 2:

Strong Form Efficient: The share price of Company A increases to 95 pounds, and the share price of Company B decreases to 55 pounds as the market is aware of the private meeting and potential takeover.

Semi-Strong Form Efficient: The share price of both Company A and B remain the same as the market has not been made aware of the potential takeover.

Day 6:

Strong Form Efficient: The share price of Company A remains unchanged at 95 pounds as the market is aware of the public announcement of the one newly issued share of A for each share of B offered. The share price of Company B decreases to 55 pounds.

Semi-Strong Form Efficient: The share price of Company A decreases to 90 pounds as the market has yet to be made aware of the one newly issued share of A for each share of B offer. The share price of Company B remains unchanged at 60 pounds.

Day 12:

Strong Form Efficient: The share price of Company A remains unchanged at 95 pounds as the market is aware of the details of the large savings that will be derived from the takeover.

The share price of Company B increases to 65 pounds.

Semi-Strong Form Efficient: The share price of Company A decreases to 90 pounds as the market has yet to be made aware of the details of the large savings that will be derived from the takeover. The share price of Company B increases to 65 pounds.

The concept of an efficient market had existed since the early 1900s, when French mathematician Louis Bachelier first proposed that market prices be random, unpredictable, and not necessarily reflect the underlying value of assets or securities (Yin, 2018). Since then, economists such as Eugene Fama have further developed the efficient market hypothesis (EMH), which argues that all publicly available information is already reflected in current asset prices (Shang, 2021). This suggests that prices in an efficient market will always accurately reflect available information. However, a growing body of empirical evidence suggests that markets are only sometimes efficient and that prices only sometimes fully reflect available information. For example, studies have found that stock prices tend to overreact to news and events, resulting in prices that are only sometimes reflective of the asset’s underlying value.

Furthermore, research has also shown that stock markets are subject to periods of overvaluation and irrational exuberance, indicating that prices do not always reflect a business’s true fundamentals. These findings suggest that prices in an efficient market may only sometimes reflect available information. In addition, evidence suggests that markets are not always efficient due to cognitive biases and behavioral anomalies (Nitsenko et al., 2019). Studies have found that investors are subject to various cognitive biases, such as anchoring, which can lead to prices that are not reflective of the underlying value of a particular asset. Furthermore, research has also found several behavioral anomalies that can affect market efficiencies, such as herding behavior and momentum trading. These findings indicate that prices in an efficient market may only sometimes fully reflect available information (Melnik, 2019).

In terms of the efficiency of the capital market in Hong Kong, there is evidence to suggest that it is only sometimes efficient. For example, research has found that the Hong Kong stock market has been subject to periods of irrational exuberance, with prices driven by speculation rather than fundamentals. Furthermore, studies have also found that the market is prone to bubbles and crashes, indicating that prices do not always reflect the underlying value of the assets. These findings suggest that the capital market in Hong Kong is only sometimes efficient and that prices may only sometimes fully reflect available information. An example of a company listed on the Hong Kong stock exchange is Tencent, one of the largest technology companies in China (Li et al., 2022). The stock price of Tencent has been subject to periods of irrational exuberance, with prices being driven by speculation rather than fundamentals. For example, in 2017, Tencent’s stock price rose by more than 50%, despite the company’s fundamentals not keeping pace with the rise in the stock price. This indicates that the market was not always efficient and that prices were only sometimes reflective of the asset’s underlying value. Furthermore, there have also been periods of overvaluation and bubbles, further indicating that the market is only sometimes efficient and that prices may only sometimes reflect available information.

Another example of a company listed on the Hong Kong stock exchange is AIA, one of the largest insurance companies in Asia. AIA’s stock price has been subject to periods of irrational exuberance, with prices being driven by speculation rather than fundamentals. For example, in 2017, AIA’s stock price rose by more than 30%, despite the company’s fundamentals not keeping pace with the rise in the stock price. This indicates that the market was not always efficient and that prices were only sometimes reflective of the asset’s underlying value. Furthermore, there have also been periods of overvaluation and bubbles, further indicating that the market is only sometimes efficient and that prices may only sometimes reflect available information (Li et al., 2022).

References

Baum, A. E., Crosby, N., & Devaney, S. (2021). Property investment appraisal. John Wiley & Sons.

Haig, R. M. (2020). The concept of income—economic and legal aspects. In Forerunners of Realizable Values Accounting in Financial Reporting (pp. 140–167). Routledge.

Leković, M. (2018). Evidence for and against the validity of the efficient market hypothesis. Economic themes56(3), 369–387.

Li, Q., Liu, X., Chen, J., & Wang, H. (2022). Does stock market liberalization reduce stock price synchronicity?—Evidence from the Shanghai-Hong Kong stock connect. International Review of Economics & Finance77, 25-38.

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