Research wk2 Essay Example | Topics and Well Written Essays - 500 words

Research wk2 - Essay Example There will be several ethical dilemmas according to the APA Ethical Principles of Psychologists and Code of Conduct (2010) that I will face. Standard 3.04 is the first of these ethical concerns that I will face which encompasses a clause for avoiding harm. In questioning these juveniles to gain an understanding of their motivations and the reasons behind their criminal activities there is a high probability of exposing them reliving traumatic incidents and disturbing personal experiences. Standard 4.02 that pertains to limiting confidentiality is another obstacle on the research that I would be undertaking. This ethical consideration would limit the amount of information disclosed by the subjects regarding their offenses and confidential details of the crime scene. This information could be critical in aiding the research however due to the confidentiality ethical dilemma further complexities in terms of reaching a comprehensive conclusion can be deterred. Furthermore according to Cr eswell (2009) there might be a rising need to gain a consent form from the participants which might pose to be a problem since these juveniles might be hesitant to officially sign documents that pertain to formal information collecting.

What this country (US),state or school needs more than anything else Essay

What this country (US),state or school needs more than anything else - Essay Example The gravest threat our country is facing lies to the turning point of extremism and technology. Our rivals have candidly acknowledged that they are in a quest for weapons of mass demolition, and evidence shows that they are doing so with fortitude. The United States will not let these efforts be successful. We will assemble our defenses in opposition to ballistic missiles and other ways of delivery. We will work together with other nations to refute, contain, and restrain our enemies’ hard work to acquire treacherous technologies. We will also augment our self-defense; our country will act using all ways against all forms of intimidation in time before they are wholly formed. We should be ready to crush all our enemies’ plans; we will use the best astuteness and proceed with consideration. If we will not do our best, history will criticize those who saw this approaching danger but failed to take action. In the new globe we inhabit, the only course to peace and defense i s the path prompt action. The unfolding upheaval over the Islamic Republic of Iran’s nuclear aspirations, and the subsequent steps presented to the United States in dealing with this dispute is a debate that has taken a long period of time to conclude. With the exception of Iraq, no other disaster today so bedevils American policy makers, for a long period this case has provided the international community with irrefutable proof that the Iranian regime is pursuing a massive, multi-faceted endeavor, and in spite of United Nations censure (Kerr 37). In and of itself, the possibility of the world’s leading state sponsor of terrorism acquiring the world’s most dangerous technology will be deeply troubling. These weapons, if manufactured can lead to both the mass destruction of property and loss of lives. Among the solutions to this issue are; military action that is deeply problematic. The use of force on Iran’s nuclear

Of Mice and Men Novel Essay Example for Free

Of Mice and Men Novel Essay The novel was set in California in 1937, on a barley farm. The book is about 2 guys named George and Lennie. They are 2 friends who travels around together going from workplace to work place, earning there keep. To achieve a dream a dream of owning there own piece of land to do whatever they want. There are alot of characters that are lonely in this novel. Candy is one, he is the oldest worker on the farm, and with being a pensioner he is also disabled, but not bye mental, but only has one hand. I think this is why people on the ranch dont really want to know him. Hes old and one-handed. Krooks is another lonely individual on the ranch, hes also one of a kind in the book. Hes the only black person there. Back then it was extremely common for there to be racism, so the fact that a negro was on the ranch made it incredibly hard for him. Curleys wife is another example of one of a kind on the ranch, she is the only woman on the ranch. Her husband curly is full of himself, and is always looking for a fight. So in order to speak to Curleys wife, is just asking for trouble. This doesnt help her, because at first people just think shes a slapper whose trying to get the guys at the ranch in trouble. but she really cant help feeling lonely and wanting a conversation with a human being now and then. Feisty Curly is very strict over her and almost has her imprisoned. A way Steinbeck has done this is because you dont even know her name. the fact that no one wants to get to know her, or just the fact she is kept away from society we dont even know her name. George and Lennie are two guys who are travelling around together, working around wherever they can to earn some money. George is the smaller of the two but the one with the brains. Lennie on the other hand is a big strong lump. The classic type of couple to go travelling around. Lennie isnt just all brute force, he is actually very affectionate he likes soft animals that he can pet. He doesnt quite understand his own power, as you will find out later. George takes care of Lennie through there travels, because Lennie wouldnt survive by himself. Even though Lennie is a burden on George, he doesnt just leave Lennie because he knows that hed be nothing without him. Lennie does respect George though like an older brother or parent, he will listen to everything George says and do it. But everyone else he couldnt give a damn! After a discussion Lennie and George were having about there dream place, George announces to Lennie he knows somewhere like theyve always talked about. Candy over hears as he is still in the room. Now Candy is an old swamper, who spends his time sweeping. He doesnt want to live the rest of his life like this. He interrupts there conversation, to give George a proposition of helping them out with the land. He offered a huge sum of money towards it. Maybe he was also buying himself into a relationship. He also offers to cook clean and other various chores around the place. After he offers the money they cant resist the offer or there dream would stay a dream forever. But I think they knew they could trust Candy as he hasnt got anything to live for or in any way betray the two. Crooks is the only nigger in this story. I think Steinbeck gave a sense that even if you didnt read the description of crooks you would know he was different somehow. He isnt allowed to play cards with the other guys in the bunkhouse, hes not even aloud in the bunkhouse. He has his own room out in the stables, its kind off like theyve just said, now hes out with the other animals. Just because he is a different colour, they just look down on him, like he is an animal. This shows the extent of the racism. But in one way this is the one thing, crook is aloud to have, that is his own personal space. I think the others respect this as they know if they want to come in, then they need his permission first. He is very sour towards white people, as what they have pout him and his family through for generations. So he is very bitter against racists, and white people in general. When Lennie is in the barn, after his pup died, via the over petting from Lennie. Curlys wife enters the scene. They sit and talk, at first Lennie wants to obey Georges orders, but she convinces him to settle down. I think Steinbeck made this scene more than just to put an end to Curlys wife. I think its also to bring the two most lonely people on the ranch together. All the men are outside horseshoeing, apart from Lennie. And Curlys wife just expelled from everyone as per usual. So after talking, they seem to have made friends. When lennie talks about his love of animals and soft things, she says he can touch her hair, because its soft. But now after Lennie touches her hair it has flipped the story right round to the beginning. Lennie not understanding the delicate female emotions. After stroking her hair for abit, she asks him to stop. But Lennie cant resist, and just has to keep stroking her. After this she thinks shes being attacked or assaulted. She gets very panicky, and starts screaming. This gets George very confused and scared. In shock he pleas for her to stop, with his hands around her mouth. This just gets her even more scared and she keeps going. Lennie not knowing what to do, gets angry that shes not listening to him and violently shakes her. Resulting in her breaking her neck. After he realises what hes done. He remembers what George told him, and runs away to the riverside where he was told to go if he caused trouble. Now after everyone had found out Curleys wife was dead George and curly knew there dream was shattered. Theres nothing they could do to save Lennie from a fait ending only with death. Candy seems very thoughtless and selfish, when he asks George George can we still do it? But I think hes just trying to keep his dream alive for a little more. He really needed an outlet from the life he is leading at this time. George must have been quite offended, especially how close he was to Lennie. But they both must have been annoyed. Theyve both just had there dream shattered in a moment. I think Candy wanted to keep it alive just for a little longer.

How Investment Opportunities Affect Cash Holdings

How Investment Opportunities Affect Cash Holdings Introduction In recent years the interest of financial researches raised to firms cash policy, cash positions; if more accurate they are paying more attention why do firms hold so much cash. These issues have a long history and are the basis of corporate finance.  Indeed, from the day to day operations to finance long-term investments, own funds are just the most important source of funding. In particular, observers have recently serious doubts about the validity of so much cash.  This problem has led to important research aimed at clarifying the multifaceted aspects of monetary policy firms.  Although the rapid development of significantly enriched our understanding of the factors that stocks of companies the funds, the literature has paid little attention in the form of cash policys real impact on the daily activities of firms. In the 2007-2008 credit crunch business leaders and the media have made the phrase cash is sovereign back in vogue.  Although the firms internal cash flows decline, the stock markets collapsed and the credit markets nearly frozen, the lack of money has become a reality for many firms.  For example, General Motors (GM), based in the U.S. automaker, announced on 7 November 2008 that he could escape from the liquidity, despite the ongoing restructuring process. GM eventually reorganized through bankruptcy, but their fate was to demonstrate the importance of cash holdings.  Although the reduction of cash flows, as a rule, inevitable in many industries during the economic downturn, the symptoms can be removed by a sufficient amount of cash as a buffer to the crisis.  Nevertheless, for several reasons shareholders do not always want to see the firm to save money and sit on it.  The shareholders outlook on firms cash holdings and the cost they place on it will be examined in this research. The determinants and consequences of corporate cash holdings have attracted enlarged interest of scientists over the past ten years.  One key issue was that the relationship between cash and the value of the company.  Broadly speaking, two main factors in the equation of the advantages of liquidity of the company and the agency cost of managerial discretion.  Both these arguments have their supporters. For example, Myers and Majluf (1984) argue that costly external financing means that firms must maintain a sufficient cash reserve, which provides liquidity to take advantage of new projects a positive NPV.  However, according to Jensen (1986) the agency costs of managerial consolidation means that large amounts of cash should be paid to shareholders to keep managers overinvesting negative NPV projects.  Apparently, there is no single truth, which will apply to all companies at once, as the needs of both the firm and its managers are not uniform. Understanding the value of cash is of interest not only for researchers and scientists, but even more so for practitioners.  Equity analysts, financiers and corporate chief financial officers must all be very interesting to know which factors affect the cost of cash holdings in the company and why. Most equity analysts simply add cash to the top of the value of the company, without giving attention from what could be the reason why money should not be evaluated at face value. However, researches show, markets, monetary values in different firms in different ways, and, consequently, analysts may be too especially if the company has a large amount of liquid assets.  For corporate financiers situation is somewhat different, because they often give the conclusion that the value of the target firm is the acquirer, thereby eliminating the influence of the prevailing corporate governance and financial policies.  Nevertheless, it can be valuable to understand the value of cash when as sessing the market value of the firm.  Finally, the financial department of a firm must know why their cash cannot be appreciated at face value, and that they could do if they want.  This allows us not only to understand the preferences of shareholders, but perhaps an opportunity to meet them. Problem Statement In this research I want to find answers to the questions like: What is the reason of holding so much cash than needed? What kind of effects it could cause? How the financing constraints and investment opportunities together affect the value the shareholders place on cash? How firms investment opportunities affect the marginal value of firms cash holdings? How firms the state of external capital markets affect the marginal value of firms cash holdings? 1.3 Research objectives The aim of this work is the approach to the cost of cash holdings of firms in two directions. First, subsequent to Faulkender and Wang (2006), who studied the cross-section changes in the marginal value of corporate cash, which arises from differences in corporate financial policy. Secondly, inspired by the credit crunch of 2007-2008, I examine how changes in the external capital markets affect the cost of money over time.  As far as I know there have not been previous studies on the time changes in the value of cash.  There are several reasons why the loan should affect any results related to the companys cash holdings.  First, Almeida et al.(2004) show that financially constrained firms maintain a significantly higher proportion of their cash flow, the following adverse macroeconomic shocks than before.  This means that the relationship between the preserve cash flow and earnings of the company is dynamic and may change over time.  Second, the importance of cash is emphasized in a recession.  When a loan is becoming more rationed, the company in which a lot of cash does not need to worry about the inability to finance daily operations.  Intuitively, firms with more cash are less likely to be downgraded credit rating and are able to maintain acce ss to capital markets.  In addition, these companies can take advantage of the plight of the weaker firms, which may be less liquid assets, through active competitive actions and acquisitions.  Thus, it seems appropriate to us a treasure load of cash in good times to be able to strike when the economy turns.  Finally, as credit becomes more and more rationed, it also becomes more expensive.  This is especially true for financially constrained firms. I use a sample of around 1000 Malaysian firms for the last decade from 1999 to 2009 to test the hypothesis in Faulkender and Wang (2006), impact of investment opportunities on the value of cash, and the change in value of cash over the economic cycle. The usable observations begin from 1999 because for most of the variables I require a change throughout a fiscal year. The extraordinary state in the financial markets during 2007-2008 allows me to study how it may have impacted the value of cash. The following terms interchangeably I use in this thesis. First, in a few ways, mainly as cash holdings, cash reserves, or simply cash I refer to firms cash holdings. Nevertheless, cash level is used to refer to cash ratio (cash to net assets). Second, I use the value of cash, the marginal value of cash, value of additional cash, value of an extra dollar of cash, and the value the shareholders place on cash while referring to the value of firms cash holdings. Third, since most of the previous studies have been done with U.S. data, I discuss the value of a dollar in the introduction. However, my data are from Malaysia, and therefore in the empirical part I am examining the value of a ringgit. I review the related literature in the next section. Section 3 develops theoretical framework of the study, the main hypothesis, illustrates the methods and details the sample selection. LITERATURE REVIEW The literature on market value of cash can be divided into research focus on the benefits of liquidity, or agency costs.  The former approaches through the studies of financial policy and corporate decision making of companies, whereas the latter evaluates the degree of agency conflicts on the basis of corporate governance factors.  Despite the general division between the two issues, both are at least implicitly always present during the tests and conclusions. Although much effort has recently been devoted to studying the determinants of cash policy of firms, data on the impact of reserves firms cash remains relatively small.  However, there are a few notable exceptions.  Blanchard, Lopez-de-Silanes and Shleifer (1994), who studied a small sample of companies that received cash windfalls from lawsuits, and Harford (1999), studied the acquisition of the company with unusual cash, the document that managers with weaker incentives to maximize  value, tend to spend large amounts of cash is inefficient. Opler, Pinkowitz, Stulz and Williamson (1999) argue that corporate cash can be attributed to a compromise, the theory of financial hierarchy and agency theory.  Kim, Mauer and Sherman (1998) develop a model of compromise and argue that the optimal amount of corporate cash holdings is determined by the tradeoff between lower income and benefits to minimize the need for costly external financing.  Almeida, Campello and Weisbach (2004) believe that corporate cash holdings affected by financial difficulties.  Pinkowitz and Williamson (2001) believe that the bank authorities can affect the cash holdings of Japanese firms.  Faulkender and Wang (2006) consider changes in the marginal value of corporate cash holdings related to differences in corporate financial policy.  Foley, Hartzell, Titman and Twite (2006) offer tax-based explanations of corporate cash. Most of the literature to evaluate the relationship between financial policy and the exact market value cash holding focused on companies in the United States of America (USA) Pinkowitz and Williamson (2004), Faulkender and Wang (2006), and Denis and Sibilkov (2007) all  study how the financial characteristics of the company, and the cost of cash to play together. Pinkowitz and Williamson (2004) show that the average market value of the dollar held by a firm at roughly $ 1.20, which indicates that shareholders believe that the benefits outweigh the potential liquidity problems of the agency associated with it.  Faulkender and Wang (2006), using different methodologies to find the market value of the dollar at $ 0.94 on average.  Their results suggest that the potential costs of institutions, as well as tax effects outweigh the benefits to the average firm.  Denis Sibilkov (2007) focus on the financial difficulties of the company and the investment opportunities and find consi stent results.  Nevertheless, there is significant cross-section changes in the market value of money, thus focusing on the mean values shows only a little about the relationship between fiscal policy and the value of cash. The other branch of value of cash literature focuses on the effect of corporate governance.  For example, Dittmar and Mahrt-Smith (2007) use U.S. data show that the additional $ 1 cash for badly managed companies worth between $ 0.42 to $ 0.88, while good governance doubles the value.  Pinkowitz et al.  (2006) used a cross-border data and found that an additional $ 1 is associated with an increase in company value of $ 0.29 to $ 0.33, depending on the criteria of corporate governance in countries with weak protection of shareholders, while an additional $ 1 in cash  associated with an increase of $ 0.91 to $ 0.95 in the value of the company in countries with good shareholder protection.  In addition, Kalcheva and Lins (2003) found that a minority of investors who are not very well protected by applicable discounts for firms in high levels of cash.  This is consistent with the findings Fresard and Salva (2009), which show that the value of $ 1 of excess cash of typical non -US companies is U.S. $ 0,58, while it is $ 1.61 for the firms listed in the U.S. through exchanges means that  investors discount the value of corporate cash reserves when they are at high risk of turning into private profit. RESEARCH DESIGN AND METHODS Theoretical Framework Here I will talk about the early literature related to the value of cash holdings of the company, as well as provide relevant theory.  I begin with outlining the background to understand why firms hold cash. It is necessary to identify with why firms hold cash in order to understand how the shareholders determine the importance they attach to the cash.  Then I will present before the relevant studies and conclusions contained in the value of the cash literature. 3.1.1 Cash holding motives If all firms operating in the world of perfect capital markets, cash holdings will have no value.  If the firm was in need of cash for operations or investments, it can raise funds at zero cost. While there is no liquidity premium in such a world, holdings of liquid assets have no possibility of cost.  Consequently, if a company borrows money and invests it in liquid assets, shareholder wealth is unchanged. Nevertheless, in the real world markets are not perfect and the holding of liquid assets has its costs.  Thus, a firm must strike a balance between the marginal cost of holding liquid assets and the marginal benefit of holding these assets. Here, I present five theories of why firms hold cash and which have been shown in earlier literature. 3.1.1.1 The transaction motive Transactions motive for holding cash is due to the cost of converting money substitutes into cash.  According to Keynes (1936), a company can save on transaction costs by using cash to make payments without liquidation of assets.  Miller and Orr (1966) model the demand for cash to finance daily operations, and the required level of cash.  The company short of liquid assets has to raise funds in capital markets, liquidate existing assets, reduce dividends and investment, the revision of existing financial contracts, or use a combination of these actions.  Since there are both fixed and variable costs in increasing cash, the company must hold a buffer of cash to avoid raising cash often, and thus to avoid the associated fixed transaction costs. Myers and Majluf (1984) argue that the increase in external financing is more costly than using internal resources in the presence of asymmetric information.  Since outsiders know less than the management, they may discount the price of securities more than management was willing to accept.  Thus, the management may find it more profitable not to sell securities, and even reduce the investment.  For this reason, it may be optimal for companies that conduct a certain level of cash to meet the needs of investment spending. 3.1.1.2 The agency motive Jensen (1986) argues that entrenched managers have incentives to retain cash rather than an increase in payments to shareholders, even if the firm has limited opportunities for investment.  Opler et al.  (1999) tender reasons why managers can use the optimal cash policies.  First, managers can accumulate funds to pursue their personal interests.  Cash allows managers to invest in external capital markets would not be willing to finance.  They usually spend one dollar in cash in hand, even if they cannot raise financing from the markets.  Consequently, they could make investments that may have a negative impact on the value of the company.  Jensens (1986) free cash flow problem predicts that managers with surplus cash are probably to overinvest.  Thus, a one dollar increase in cash holdings of firms can lead to significantly less than one dollar increase in the value of the company.  As the outsiders do not know, whether managers are accumulating cash to increase the value of the company or pursue their own goals, the cost of external capital is likely to increase. 3.1.1.3 The tax motive In recent studies by Foley et al. (2007) shows that U.S. companies which will bear the tax consequences associated with the repatriation of foreign earnings hold a high level of cash. Affiliates referring to the highest tax consequences of repatriating also have the highest level of cash.  This means that multinational companies are more likely to accumulate cash.  The extent this applies to the Malaysian firms has yet be studied. 3.1.1.4 The theory financing hierarchy The theory of financing hierarchy implies that there is no optimal amount of cash, based on arguments similar to the hierarchy theory of capital structure (Opler et al. (1999)).  According to theory, firms are not willing to issue shares, because it is too expensive because of the asymmetry of information.  They sell the debt when they do not have sufficient resources, and when they can do so.  When they have sufficient resources to invest in profitable opportunities available, they pay the debt which becomes due, and to accumulate more cash or else.  The theory assumes that the cash holdings of firms are less strategic choice but more a result of a dynamic, endogenous process. 3.1.1.5 Investment opportunities and the value of cash Pinkowitz and Williamson (2004) were the first who studied the market value of cash holdings.  They focus on firms investment and financing opportunities.  They find that the growth of the company have the possibility of a positive attitude to the market value of money.  Firms with greater investment opportunities have a higher cost of cash.  They also show that firms with higher uncertainty of investment have a higher valuation.  In addition, firms in a difficult financial situation have lower valuation on cost. Faulkender and Wang (2006) confirm this conclusion, as they show that firms with lower leverage, a proxy for financial distress, have higher value put on cash.  Finally, Pinkowitz and Williamson (2004) argue that access to capital markets does not affect the market value of cash.  However, they note that their proxy for access to capital markets, company size may not be perfect. Consequently, Faulkender and Wang (2006) show that the difficulties in obtaining ac cess to capital markets play an important role in the market value of cash.  Liu and Chang (2009) show similar proof on the impact of financial constraints on the market value of cash.  Faulkender and Wang (2006) also show that the marginal cost of cash reduces with the amount of cash holdings.  They argue that this is associated with an increase in the probability distribution of cash to shareholders, and consequently incurring transaction costs and taxation, to reduce the cost of cash. Hypothesis After I studied the theory of the value of cash holdings, I turn to the empirical predictions.  I present hypotheses for the impact of financial policy and investment opportunities on the value of cash.  These hypotheses relate to previous work in the field of corporate finance and the value for cash. Hypothesis 1: The marginal value of cash is decreasing in the level of the firms cash position After Faulkender and Wang (2006), I initially hypothesize that the marginal value of the shareholders place on cash holdings of the company reduces as the level of cash holdings increases.  The reasons are based on agency and tax considerations.  As firms cash level rises it becomes more likely to distribute the cash to shareholders who then as a result incur a dividend tax.  In addition, the company with high cash holdings becomes more vulnerable to face agency costs as shareholders begin to worry about the interest and ability of managers to invest in positive NPV projects.  Thus, the marginal cost of cash should reduce as the cash level of the company increases. Hypothesis 2: An extra ringgit of cash holdings is less valuable for shareholders in highly levered firms than in firms with low leverage. The second hypothesis from Faulkender and Wang (2006), which I test in my Malaysian sample, is the negative relation marginal cost of cash and firms leverage.  The cost of cash for shareholders in high levered firms is likely to be less than in firms with low leverage as contingent claims analysis predicts that most of the value of these firms is in the hands of debt holders. Additional ringgit is likely to go mostly to increase the value of debt and therefore, the value for shareholders is low. Hypothesis 3: An extra ringgit of cash holdings is more valuable for shareholders in financially constrained firms. The last hypothesis which follows Faulkender and Wang (2006) is that the simplicity of accessing to external capital markets should have an impact on the value of cash.  Access may be limited for various reasons, but often associated with asymmetric information about the state of the company, which may occur for smaller firms, firms without any credit rating or equity research coverage and the firms that do not pay dividends.  These firms can be considered as financially constrained and can be thought of having higher costs in raising external funds.  Thus, with its own funds, i.e. cash in hand, should be more valuable to these firms than financially unconstrained firms, which are likely and able to obtain external financing. Hypothesis 4: An extra ringgit of cash holdings is more valuable for firms with good investment opportunities. I examine whether firms with better investment opportunities have a higher valuation on their cash holdings than firms with weaker growth potential by following Pinkowitz and Williamson (2004).  Pinkowitz and Williamson argue that the main theoretical determinant of the value of cash holding should be the investment opportunity set of the firm.  First, liquidity is important, because without liquid assets of the firm will be forced to abandon a positive NPV project (Myers and Majluf (1984)).  This should increase the cost of cash as it is expected to increase in value of assets.  Secondly, Jensens (1986) free cash flow problem arises when the firm has a few good opportunities for investment.  If a company with sufficient cash reserves has positive NPV investment opportunities, it is likely to use these advantages instead of wasting money on unproductive ventures.  Intuition is that when two identical firms except that one has a positive NPV investment opportunities and th e other one does not have the opportunity to invest, it is likely that the first firm will spend its cash in ways more valuable to the shareholders. Hypothesis 5: The marginal value of cash is high for financially constrained firms with good investment opportunities. One of the arguments in Faulkender and Wang (2006) having a higher marginal value of cash for financially constrained firms is that when firms have positive NPV investment opportunities. The higher the cost of raising external capital is, the more likely these opportunities are foregone. Though, they do not test for it empirically. I hypothesize that the reason why financially constrained firms and firms with better investment opportunities have a higher value placed on cash when examined separately, is in fact due to the combined effect of these two criteria.  A financially constrained firm without investment opportunities is unable to make return for the cash, while a financially unconstrained firm with good investment opportunities can simply increase external funding when it needs to. Thus, financially constrained firms with good investment opportunities should have a high value placed on their cash holdings by their shareholders compared with other firms. Hypothesis 6: Firms cash holdings, on average, decrease when the cost of external capital increases. When conditions in the corporate credit market deteriorate, it often leads to a reduction in the economy (Fisher (1933)).  As firms generate less internal cash flows and at the same time, corporate credit becomes more expensive and rationed, cash reserves of firms, on average, should decline.  It was also suggested by Opler et al (1999). Hypothesis 7: When the cost of external capital is higher an extra ringgit of cash holdings is more valuable. As the supply of credit becomes more rationed and therefore more expensive, the cost of raising capital increases.  The increase in the cost of capital makes firms more likely to give up positive NPV projects due to lack of funding.  Therefore, when a credit is more rationed, cash holdings should become more valuable because they can help companies take advantage of positive NPV investment opportunities without incurring high costs of raising external capital. Methods I follow Faulkender and Wang (2006) who developed a methodology which estimates the extra value the market incorporates into equity values that result from changes in the cash position of firms over the fiscal year to measure the impact of corporate financial policy on the value of cash holdings. Since stock returns are influenced by the common risk factors, as well as changes in firm-specific characteristics it is necessary to control for both to be able to estimate the magnitude change attributed to the change in cash. The change in the value of a firm is measured by the excess return for the firm i during fiscal year t less the return of stock is benchmark portfolio during fiscal year t. Then the excess returns are regressed on changes in the characteristics of the firm.  In this case the main interest is in the estimated coefficient corresponding to the variable measuring the ratio of unexpected changes in cash of the firms lagged equity value.  Since the dependent and indepe ndent variables are standardized by lagged market value of equity, the coefficient measures the dollar change in shareholder value resulting from a change of one dollar of cash held by the firm. Faulkender and Wang (2006) methodology is in effect a long-term event study, in which event is unexpected changes in cash holdings, controlled for other factors that may impact returns over the assessment window of one year. 3.3.1 Controlling for risk-related market-wide factors To control for risk-related factors excess returns are examined that may impact a firms discount rate and return. Fama and French (1993) show that size and the book-to-market of equity clarifies ordinary variation in stock returns. To arrive at the estimate of the excess return I use the 25 Fama-French portfolios (Fama and French (1993)) formed on size, measured as market capitalization, and book-to-market value of equity ratio (BE/ME henceforth) as my benchmark portfolios. First firms are sorted by size and divided in five size groups, and then firms are sorted by BE/ME ratios and divided in five BE/ME quintiles for each year. Then I group every firm into one of BE/ME portfolios and 25 size based on the intersection between the BE/ME and size independent sorts. Firms excess return is calculated by subtracting the firm is benchmark portfolio return during fiscal year t from the firm is stock return during fiscal year t. The fiscal year, or yearly, returns are calculated using the monthly returns. Hence, the dependent variable for the baseline regression is (1) where ri,t is the stock return for firm i during fiscal year t and is stock is benchmark portfolios return during the corresponding fiscal year t. 3.3.2 Controlling for firm-specific factors It is necessary to control for variables that could be correlated with both change and returns in cash holdings to be able to examine how much the change in cash holdings impacts the change in equity value. Hence, in addition to change in cash should be regressed the excess stock return over the fiscal year on changes in a firms profitability, investment policy, and financing policy. The subsequent equation describes baseline regression: = (2) where the ΔX term indicates unforeseen change in variable X. The dependent variable is described above. The independent variables are firm-specific factors that control for sources of value other than cash or may be correlated with cash holdings. The dependent variable was described above.  Independent variables are firm-specific factors that control the sources of value, except for cash and can be correlated with cash holdings. ΔCi,t is the unforeseen change throughout fiscal year t in firm is cash holdings in balance sheet and the most significant variable in the regression. I suppose that the unforeseen change in cash holdings equals to the realized change in cash holdings throughout the fiscal year. ΔEi,t is the change throughout fiscal year t in earnings before interest and extraordinary items, and controls for profitability of firm. Firms investment changes policy are controlled by ΔNAi,t, the change throughout fiscal year t in total assets net of cash, and ΔRDi,t, the change throughout fiscal year t in RD expenditure. The financing policy is controlled by ΔIi,t which is the change throughout fiscal year t in interest expense, ΔDi,t which is the change during fiscal year t in sum dividends, Ci,t-1 which is firm is lagged cash holdings at time t-1, Li,t which is market leverage at the of fiscal year t, and finally NFi,t which is the firms net financing throughout the fiscal year t. As the stock return is also by definition divided by Mi,t-1, the standardization allows for understanding the estimated coefficients as the dollar change in value for a one-dollar change in the relevant independent variable. Sample Selection For my empirical analysis of the marginal value of cash in Malaysia and how it may have changed over time with the availability of capital from the external market I use a sample of publicly listed Malaysian firms from 1999 to 2009. The sample includes both active and inactive firms to avoid a survivorship bias. In this section I describe how I calculate the variables and from where I obtain the data. Here I will first describe how the dependent variable is calculated, and then describe the independent variables in detail. 3.4.1 Dependent variable The dependent variable is the excess return of a firms stock (Eq. (1)). The stock return for a firm i through fiscal year t, ri,t, is calculated using Total Return Index (item ReturnIndex) from Thomson Reuters Datastream database (referred as Datastream after this). The index regulates for stock splits and dividends, and therefore the most accurate measure of increase in firm equity value. 3.4.2 Independent variables The change is basically the difference between fiscal years t and t-1. In addition, all variables excluding for leverage and net financing are deflated by one-year holdup market value of equity. The variables used in Eq. (2) are measured as below: a) Ci,t and Ci,t-1 One-year holdup cash holdings and cash holdings are measured as cash and short-term investments (CashAndSTInvestments). Ever since this is the most important variable, it should be noted that firms cash holdings are considered to include marketable securities and cash in majority of academic studies. Depending on the source, these can be listed as cash and equivalent, cash and short-term investments or marketable securities and cash. Though, in addition to cash the definition can include items such as commercial papers, treasury bills and other money market investments. In general databases adjust the reported records from firm financial statements in order to make the data comparable across the firms. b) Ei,t Earnings before interest and extraordinary items are calculated as earnings before extraordinary items (IncomeBefExtraItemsCFStmt) plus interest expenses (InterestExpenseOnDebt). c) NAi,t Total assets net of cash or net assets, are calculated as total assets (TotalAssets) minus cash holdings (CashAndSTInvestments). d) RDi,t RD expenditure is simply RD expenditure (ResearchAndDevelopmentExpense). It is set to zero if missing. e) Ii,t Interest expense is measured as interest expenses on debt (InterestExpenseOnDebt). f) Di,t Total dividends are measured as common dividends paid (CommonDividendsCash). g) Li,t Ma

Russias Economic Transition :: Russian History Historical Communism Essays

Russia' Economic Transition In August of 1991, the collapse of the communist system in the USSR and it's neighboring republics occurred. Out of the smoke emerged fifteen new republics and a union known as the Commonwealth of Independent States. These new regimes faced formidable obstacles. The collapse brought massive inflation which in turn forced the economy into a spiraling decline and a state of almost worthless value. Many people were quick to point the finger at their communist past, and even more eager to lay blame. Traditional communist ideology was to "provide for every individual an equal amount of goods and services, thus creating a state of equality amongst the populous" (Leveler, 16). Many people felt as if their current hardships could be blamed on the communists and their economic policies, specifically their "Core-Periphery" plan. The communist sponsored "Core-Periphery" economic policy that was evident in Russia was quite simplistic in nature. The theory, traditionally used to describe inter-continental trading and production, was adapted for use in the Russian economic zones. The theory was as follows; Areas which surround the capital (core region), usually rich in one material or another, would be used for the extraction of raw materials. These materials would then be shipped back to the capital in order to be manufactured into goods. From there, the manufactured products would be shipped back to the surrounding regions (periphery region) for resale. The citizens of Russia were surviving on this system, but barely. The Core-Periphery policy was not efficient, nor effective, for usually a product needed on one side of the federation, was produced at the other end. Factors such as transportation costs and adequate use of human resources was very inefficient and cost-consuming. Strong influences from the world urged Russia to make the transition into the market-oriented economy. This seemed tempting, for the market-oriented economy preached individual wealth and prosperity. Seeing no better solution to their current economic woes, Russian policy-makers took the plunge.   Ã‚  Ã‚  Ã‚  Ã‚  By 1995, 4 years since the beginning of the transition into a market- oriented economy, no satisfactory economic improvment had taken form. Productivity in many states such as Turkmenistan and Belarus continued to fall (Table 2), and inflation was still at high levels. Many new Russian capitalists in the regions chose to exploit what had already been exploited in the past; raw materials. Looking to make a fast income, these new Russian capitalists sold whatever they could get their hands on, for practically no cost at all (Co- Existence, 146). Expropriation of state property, shady deals, and corruption were rampant. Productivity in industries such as agriculture declined as farmers did not want to take care of their land (Co-Existence, 146).

Mandatory Minimum Sentences Are Not Effective Essay -- Mandatory Minim

Mandatory minimum prison sentences are punishments that are set through legislation for specific offenses. They have been used throughout history for different crimes. The four traditional goals of punishment are: deterrence, incapacitation (incarceration), retribution, and rehabilitation. With the state of our national economy, cutting prison and corrections costs would be a huge savings. On the surface, it may seem that mandatory minimum sentences would serve the traditional goals of punishment. They would discourage potential criminals, keep society safe for longer periods of time, they would punish the offender and they would rehabilitate the offender. What they did not do, however, is take into account the individual circumstances of each case and each defendant. Mandatory minimum sentences are not effective and they should be repealed. The United States enacted mandatory minimum sentences for drug convictions beginning in 1951 with the Boggs Act. The Boggs Act provided both mandatory minimum sentences for first-time drug convictions and it increased the length of sentences for subsequent convictions. In 1956, the Narcotics Control Act increased the minimum sentences spelled out in the Boggs Act. It also forbade judges from suspending sentences or imposing probation in cases where they felt a prison sentence was inappropriate. In 1970, the Nixon Administration and Congress negotiated a bill that sought to address drug addiction through rehabilitation; provide better tools for law enforcement in the fight against drug trafficking and manufacturing; and provide a more balanced scheme of penalties for drug crimes. The final product, the Comprehensive Drug Abuse Prevention and Control Act of 1970, repealed man... ...tp://www.newyorkcriminalattorneyblog.com/2009/01/a_brief_history_of_federal_man.html History of Mandatory Minimums. (2005, August 31). [Brochure]. Retrieved from http://www.famm.org/Repository/Files/Updates%20short%20HISTORY.pdf Mandatory Minimum Sentences [Briefing]. (n.d.). Retrieved August 2, 2010, from Connecticut General Assembly website: http://www.cga.ct.gov/2005/pridata/Studies/Mandatory_Minimum_Sentences_Briefing.htm McVay, D., Schuraldi, V., & Ziedenberg, J. (n.d.). Treatment or Incarceration? Retrieved from Justice Policy Institute website: http://www.justicepolicy.org/images/upload/04-01_REP_MDTreatmentorIncarceration_AC-DP.pdf Sabol, W. J., PhD., & Couture, H. (2008, June). Prison Inmates at Midyear 2007 (NCJ No. 3221994). Retrieved from US Department of Justice website: http://bjs.ojp.usdoj.gov/content/pub/pdf/pim07.pdf

Herborist: Marketing and Skin Care Products

PROMOTION The objectives of Herborist promotion are to increase the new Herborist product awareness, increase number of sales, draw customers, enhance product recognition and brand identity. Hopefully, promotions will also benefits consumers by providing needed information about Herborist value proposition. Since there are several major competitors and local players in the South Africa market, it is important to plan to have effective strategy especially for new player with limited budget.Herborist promotion strategies will emphasize promotional strategies that reflect the lifestyle of its audience, unique value proposition and the range of media available. Herborist will also using pull strategies which mean focus on demand-driven strategy because we are target directly to the end user. Pull strategies will include free samples, public promotional events such as communities demo event, door-to-door sales, point-of-sale displays, Internet marketing campaigns and telemarketing campaig ns.Media campaigns designed to associate the product with a public good such as Chinese herbal naturalism which will differentiate Herborist’s product with existing skin care products from the competitors in the market. There are several proposal taglines we can use for Herborist in South Africa: * Beauty from harmony with nature * Beautiful & Unique You * Herborist, Herbal for Your Natural Beauty * Feels Natural†¦ * Real Herbal, Real Beauty, and Real You†¦ Media Plan Above the LineTV, Radio, Newspaper & Magazine : Herborist will focus on the State broadcasting channel with SABC1, SABC2 and SABC3. SABC1 has the highest viewership, at 70. 6% of the adult population followed by SABC2 with 60%, e. tv with 57. 1%, SABC3 with 47. 6%. For other media, Herborist will work together with Media24 that has The Daily Sun, The paper has a daily circulation of over 500 000 and readership of 7. 7-million, while Media24's other dailies have a circulation of over 800 000. For magazi nes, Media24 Magazines publishes more than 60 titles selling more than 5. -million magazines a month that are read by more than 8. 7-million people. Banner, Billboard ; Brochure : A high quality multi-folded brochure is to be promoted and distributed to all spa centers, stores, salon and malls. The placement of billboard will also crucial and important. We will place the billboard in the strategic locations which has high traffic of potential customer. The billboard ; banner will distinct with other using bright white with light green color to resemble natural healthy and using English tagline to give high end product.Online Marketing: The internet user in South Africa has increasing significantly and double from only 5 per 100 people to 10 per 100 people. The internet could also reach wider market and will be delivered to costumer with higher education and income. Regarding digital media, there were 10. 9 internet users per 100 people, 8. 5 personal computers per 100 people and 72. 4 cellphone subscribers per 100 people. Web pages indexed by Google were estimated at more than 10 billion. We also expand our relationship with Media24 Its space on the internet, 24. om , It provides a range of online services, such as careers, shopping, classifieds, property, health, free mail, instant messaging, blogs and photo albums. Media24 also owns South Africa's most popular news site, News24. com Below The Line Sponsorship & Event Marketing: We will be the sponsor for Miss South Africa Beauty Pageant that has been going for almost 50 years. In May 2012, we also are going to sponsor Professional Beauty Durban in Durban that will be focus on trend cosmetic in South Africa.In October 2012 we also are going to sponsor Look & Feel Good Expo in Cape Town. In addition, we are going to have event marketing throughout the years in beauty demo in small communities also giving public training in skin care products. Sales Promotions: There are several ways to promote Herborist. Promo tion 1: 25% Off Services for New Clients in the Spa to take customers away from competitors. Offer them a reason to give your salon a chance. Furthermore, $10 Off Next Service: Every now and then, we need to make our clients special.Promotion 2: Free $20 gift certificate with the Purchase of a $100 Herborist product. Our clients will love this idea. Not only are they buying something for friends or family, they’re getting a gift for themselves. Or we could $10 Off on Product Purchase of $100 or More. Promotion 3: 10% Off for a Positive Online Review: Many of our first time customers will look up reviews. We will encourage our positive customers to go on directory sites and leave a positive remark about their great experiences using Herborist products.Public Relations: The week prior to soft launch, the major beauty editors are to be invited for a gala dinner where they will be explain about Herborist products. This is done on a free of charge basis. Local beauty salon and spa are also to be invited to participate. Grand Opening of the Herborist to introduce Herborist’s product line to the region for all local residents and businesses is to be organised with an afternoon tea and snacks on offer. Music and a viewing of the improved facilities will be available. Spa Event