Essays on The Performance of MYER against the Market Assignment

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The paper "The Performance of MYER against the Market" is a great example of a finance and accounting assignment. MYER is Australia’ s largest fashion style departmental store that deals in clothes design and fashion. The company is registered in ASX under the code MYR. The comparison of market return and those of the MYER, as well as the risk of the return, is depicted in the table above. It is evident that the market risk and return depict a value 0.098 and 0.08 of respectively while for Myer return, the volatility of the stock and stock return is 0.697 0.029 respectively.

This implies that the volatility for the MYER stock return is riskier hence the stock will create high returns. The difference between the past stock return and the market return is because of the improving risk from the fierce completion that manufactures the same product and sells in the same local market. The impact of the increasing threat of competition is that the sales margin will reduce leading to reduction worth of the stock price in the market. Myer limited is impacted by the business environment as well as the returns are influenced by both internal and external factors such as the effect of inflation and financial distress.

The price and worth of the stock are overvalued and thus it is riskier. These features make the business more risk because the fierce completion is growing and thus the firm portrays a different tendency in stock returns unlike those the market returns. The behavior of the investor in the market significantly affect the value and thus making it informational and summary is provided with the need for a hypothesis as well as the limitation it carries including on the significance of the stock on the basis of its volatility and returns. The MYER tactical plan is significant but it is facing pressure from external factors.

There is the non-existence of arbitrage advantage of the other investor since there is full access of information by every investor and thus the asymmetry guarantees that every stockholder in the market portrays same market portfolio thus an efficient portfolio is having a diversified asset in order to minimize the risk of investment.

This is because holding a portfolio of the asset will lead to a reduction in the volatility of security as well as improves the maximum return from the investment.

References

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Damodaran, A.2012. Investment Valuation: Tools and Techniques for Determining. New york: Cengage Learing.

Gedde, R., 2002. Valuation and Investment Appraisal - Page 75.

Ilmanen, A., 2012. Expected Returns on Major Asset Classes.

Stimes, P.C., 2011. Equity Valuation, Risk and Investment: A Practitioner's.

William Megginson,S.2008. Introduction to Corporate Finance - Page 289.

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