1.How would a researcher undertaking capital markets research typically justify that a particular item of information has 'value' to investors?

2.The following is an extract from a newspaper article entitled 'Record profit in pipeline for Exxon as oil price soars' (by Steven Mufson, Canberra Times, 3 February 2008, p. 27):

BUOYED by soaring crude oil prices, Exxon Mobil has announced that it set new records for US quarterly and annual corporate profits in 2007, and Chevron, America's secondlargest oil company, also reported big gains in earnings. Exxon broke the record it previously had set for profits by a US corporation, earning $40.6 billion ($A45 billion) last year. In the fourth quarter alone, it earned $A13 billion, or $A2.35 a share, up 14 per cent from the fourth quarter of 2006. Exxon's net income for the year came to $A5.1 million an hour. Chevron said its profit rose 29 per cent to $A5.4 billion, or $A2.57 a share. Profits of the world's five biggest oil companies have tripled since 2002.T3_2020 2

Exxon Mobil's vice-president for public affairs, Kenneth Cohen, said the earnings reflected the company's 'long-term, disciplined approach' and investments made a decade ago when oil prices were dismally low. With mounting exploration costs and increasingly remote oil prospects, Mr Cohen said the large revenues were needed to meet 'the massive scale of the energy challenge before us'. But in Congress, the earnings were seen as outsized. The chairman of the Joint Economic Committee, Democrat senator Charles Schumer, issued a statement saying,'Congratulations to ExxonMobil and Chevron for reminding Americans why they cringe every time they pull into a gas station and for reminding the US why it needs to act swiftly to break our dependence on foreign oil and roll back unnecessary tax incentives for oil companies.'

Required: You are to provide a prediction as to whether the news about the record profits of Exxon would have created a change in the company's share price. What factors would have an impact on the nature of any potential share price reaction?