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Will the share price of other car manufacturers be affected

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Question - On Sept. 18, 2015, the U.S. Environmental Protection Agency (EPA) issued a "notice of violation" exposing illegal level of pollution emitted from Volkswagen diesel cars causing shares lost up to 37 percent of their value in the days after. Specifically, EPA finds that many Volkswagen cars being sold in America had a "defeat device" - or software - in diesel engines that could detect when they were being tested, changing the performance accordingly to improve results. The German car giant has since admitted cheating emissions tests in the US. Referring to the news article about Volkswagen, please explain why the information on Volkswagen's environmental performance will affect the share price. Will the share price of other car manufacturers be affected? If so, how?

Reference no: EM132680492

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