Finance Discussion
The market for bonds is not always liquid, but the same bond should buy/sell at the same price, if at the same time. If not, this will create an arbitrage opportunity and that arbitrage will align the prices on the different markets where the bond was priced differently. However, at different times, the price can change, based on the underlying factors that affect bond prices (Feldhutter, 2012). One such factor is time. Each bond has a time value, which represents the present value of the future cash flows, and the risk that interest rates will change in that time. Thus, the same bond will see its price change, the closer it gets to maturity, even when the only thing that has changed is the time.
Other changes will also affect bond prices. A change in interest rates will affect the opportunity cost of owning a given bond, leading to a change in its pricing. If the risk of the underlying asset changes, that will also affect the price of the bond. So for example, if you buy a corporate bond, rated A, and this gets downgraded to BBB, then the price of the bond will change as a result of that. Bond prices are never...
58 (YHOO), 13.38 (NKE) and 8.15 (BA). There are many explanations for the differences between the P/E ratios of these companies. One is the expected rate of growth. Each of these companies is operates mainly in one market, and is either the dominant player or in an industry with only one other major competitor. Some of the factors that contribute to the growth rate will contribute to differences in the
Therefore, while pricing strategies are different, most firms are seeking to differentiate themselves with features they believe will attract their target market, and the pricing reflecting the target market. Question 2 If a firm such as Samsung wishes to reduce costs there are a number of approaches which may be utilized. Most manufacturers are already using outsourcing for manufacturing either the handsets or some of the components. Costs are often saved
Pricing Strategy and Distribution Pricing and Distribution Strategy Analysis The most critical series of decisions any company makes are which distribution channels and pricing strategies to rely on for each product or service they offer. Pricing is the most strategic factor in any marketing, supply chain and production series of decisions because they not only send a very clear message of market value, they also have an immediate impact on profitability (Dudick,
From a supply chain standpoint, pricing departments must also create a high level of communication and collaboration across a business as well. Their role is to be the orchestrators of internal effort to manage suppliers to pricing and margin levels, ensuring consistency and focus on share goals. This is one of the primary reasons pricing has now become a strategic initiative within many businesses. For change to occur in
Pricing Management Determinants of Pricing Strategies In pricing a new, specialized electronic product, the product development, engineering, marketing, accounting and finance teams internally will rely on internal and external factors to initially set the price. Pricing objectives and the frameworks they require will determine the internal factors included and excluded from the long-term pricing strategy overall (Avlonitis, Indounas, 2005). The intent of this analysis is to evaluate the other internal factors that
Pricing Strategies Price and cost variables are not fixed. At times, there are some fixed elements to these costs but in many instances these costs are subject to fluctuation. These fluctuations can derive from changes in buying power, changes in commodity prices and other considerations. Likewise, forces in the external environment can bring about changes in the prices the firm can charge. When uncertain variables are fixed, the company can find
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now