Strategic Financial Management Essay Example | Topics and Well Written Essays - 1000 words - 1

Strategic financial Management - Essay ExampleThe market prices absorb the security prices rapidly, as early as the discipline on the organisations is available in the market. As per the efficient market hypothesis, the market readiness refers to both the order and direction of the price amendments. This is done by absorbing the new information available in the market. contrasting intensities of the market efficiency have led the bang-up markets to be segmented into different efficiency forms. The efficiency level of an efficient market can be of three types weak form efficiency, semi self-coloured form efficiency. Capital markets have weak form efficiency of the current securities prices in it reflect trusted historical information. The semi strong efficient markets reflect the past price movement in the securities and at the same time represent entirely currently available public information. The strong form capital markets reflect all the public and privately available in formation related to the securities. However, the analysis here would numerate the characteristics and behaviour of the strong efficient capital market. One of the typical financing decisions of a firm includes decisions on the issuance of the equity and debt securities. The implication of an efficient capital market means that the market prices reflect all the available information needed to have a fair pricing of all the existing securities. As the purchasing and selling of securities take place at the prevailing market price, the transaction would never impart in a positive net present value.