Nortel
Stock market investors have had a tough twelve months. Share prices have fallen hard and fast, since they peaked in March last year after what seemed to be an unstoppable climb. Recently the Canadian stock market experienced a meltdown in high tech stocks. Nortel Networks is a prime example of the meltdown. Nortel Networks Corporation (formally Northern Telecom Limited) is a leading supplier of fully digital telecommunications switching systems to telephone companies, cable television companies... In September 2000, Nortel was selling shares at a high price of around $125 per share . This was the beginning of the first fall of the stock. Then in mid February, Nortel took another fall when Nortel announced they were cutting 10,000 jobs. This caused the share price to fall by 33%. From this fall, the Toronto stock exchange went down 6% and other stocks markets across the world were affected. Nortel is the highest valued company in Canada. Whenever the stock price increa!ses or decreases, the change affects society as a whole. Many Canadians invested in Nortel and lost money from the decline in the price of Nortel. This caused people to cut back on personal expenses and the Canadian economy declines. We will be examin
The cause of the current stock market crash has effect the value of many companies and individuals throughout the world. If the interest rates increase, companies will decrease the amount of the money borrowed from the banks. Many investors invest their money as a form of income. >From the increase in interest rates, many firms and investors lost a considerable amount of income. Nortel was one of the major companies affected by the crash. Out of 218 respondents, 24%said that their was a small reduction, 33% said that there was a major reduction in their expenditures . Once the value of the stock decreases, the value of the RRS!P also decreases. Nortel will then have a decrease in their quantity demanded. Therefore, the value of the share decreases, causing the earning per share to decrease as well. The value of an individual's RRSPs often depends on the value of the stocks in which their money is invested . From the introduction of higher interest rates by Mr. This caused many investors worried and confused. Many analysts expect an economic growth in the next five years. Big corporations delay upgrading their computer systems or placing big orders.
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Acceptance Essays
