The Topic for my report is "Do you think share price reflects true value of a firm?"
Executive summary (or abstract) (maximum 150 words suggested) Summarise your essay by maximum 10 sentences or maximum 150 words; Tell us what your chosen question is, what is your theory that you think relevant to answer your chosen question, what is your opinion/argument, and relying on what assumption of the chosen theory you arrive at your final opinion. Table of contents, tables, figures 1.Introduction (200 words suggested) Given that this is a short essay, your introduction may be similar to your abstract; Again, summarise your essay by telling what you intend to argue, what is your chosen question and what is your theory that you think relevant to answer your chosen question (for instance, start with ‘this essay initiates a debate whether goodwill arising from business combinations should be subject to amortization or impairment test’. Then, you will give a very brief background information about the phenomenon, and the theoretical views against and for. Finally, you will provide your opinion grounded on the chosen theory and with its supportive assumption/hypothesis (For instance, if you wish to talk about earnings management, you should probably use positive accounting theory). 2.Literature Review (The phenomenon from different perspectives (300 words suggested) The literature review should provide perspectives from different angles with empirical evidence and different theoretical explanations of the phenomenon (in this section, you can give different theoretical views as much as the word limit allows, you will provide your own explanation/opinion in the next section with your chosen theory). Talk only the most relevant subject and be critical (critical means give different explanations, opinions and theoretical approaches equal space). If you also provide empirical evidence (supported by appendices, tables, etc.,) from the peer reviewed articles, that will increase the power of your essay. You then move to your chosen theory that you think most relevant to answer the chosen question; By doing this, you need also to justify why this theory is most relevant among others to answer to your chosen question. These will help transition you to the next section. 3.Argument/Discussion Development (400 words suggested) In this section, you need to provide us your own argument/opinion; your opinion should be logical, precise, explaining the phenomenon, and most importantly should be grounded on a theory with its fitting assumptions and hypotheses. In doing so, be simple and very clear; Read again and again what you have written, and ask yourself whether it makes sense to anyone reading the essay who is not so expert on the subject. If you think that you well understood the subject and the theory chosen, try to be innovative in opinion generation, be critical, confident and independent (surely, these should make sense and overall should help us understand better the phenomenon. Do not forget, only new and innovative ideas add to existing knowledge and the theory, or even produce new theories (see our theory definition in week 2 slides). 4.Conclusion (100 words suggested) Very briefly summarise your work, be more precise, relevant, and refer to your original aims / objectives, and spend most of your word limit to future research recommendations; Note that the following type suggestions will bring you NO marks; ‘there should be more research on the relationship between stock price and firms’ cash flows’ whilst the following type suggestions, that specifies the issue, would be highly desirable; ‘research projects examining the relationship between stock price and firms’ cash flows in high cash holding industries and low cash holding industries may provide better understanding on how agency costs are reflected in share prices – probably in high cash holding industries, share prices will be subject to greater discounts’