Efficient Market Hypothesis (EMH) & Capital Markets Research - Accounting Assignment Help

Assignment Task -           

Company A, a listed company in ASX shocked investors on Friday by warning that June-half earnings were expected to fall by 15 per cent. Company A shares have since fallen 20 per cent, to their lowest level since July 2019 and closed at $9.09 on Tuesday. Company A has been unable to recover higher costs in Australia because of aggressive pricing in supermarkets and weaker sales in the higher-margin route trade. Earnings for Company A in South East Asia are also expected to fall this year because of increased competition from new rivals, rising labour and fuel costs and currency depreciation.

REQUIRED:
a) Based on the Efficient Market Hypothesis (EMH), explain how capital markets research would describe the reaction of the market to the Company A profit warning announcement.
b) Do you think that an information transfer effect will flow from the news about Company A profit downgrade? Explain with examples.  

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