Capital Market Research

Britvic’s Efficiency in the presentation of its annual reports to the capital markets

Name

Institution

Relating accounting information and the capital markets

Capital markets are basically markets that involve the selling and buying of the long term financial securities such as debts and equities. The wealth of savers such as large companies and the federal governments are channeled to these markets and put into a long term investment. It is administered by selected financial regulators such as the Bank of England and the securities and exchange commission of the United States. However, there has been a subsisting relationship that relates both the capital markets and the financial information. Accounting information is the information as per the facts and figures provided or displayed by the financial reports of a given company (Ahmed, 2004). A company with a larger market value will have smaller abnormal returns at either the interim or preliminary announcement dates.

When it comes to this capital markets, accounting information comes in handy as it is used to determine the extent or degree with which the long term investors will subject their investments portfolio shares called for once they are sold (Steven M, 2010). This is inclusive of all the reports released, preliminary earnings announcements and annual reports as well as annual general meetings of the shareholders. Investors therefore rely on this information so as to determine which company might give higher returns while at the same time interrelating this information to that of other companies or the corresponding financial institutions (Moehrle, S. R., & Reynolds-Moehrle, J. A. 2013). However, the Efficient Market Hypothesis (EMH) has become a financial theory trademark as it is always equated with the proponents of modern finance. The hypothesis however relies on the assumption that investors expect or anticipate for company’s future profitability and will only demand if the price is...