Organizational Structure Of Mcdonalds

Organizational Structure Of Mcdonalds
The first McDonald's restaurant was run by brothers Dick and Mac McDonald in San Bernardino,
California. In 1954 Ray Kroc visited small but successful restaurant and was stunned by the
effectiveness of their operation. They produced a limited menu, concentrating on just a few items:
burgers, fries and beverages – which allowed them to focus on quality and quick service. They were
looking for a new agent and Kroc saw an opportunity. In 1955, he founded McDonald's System,
Inc., a predecessor of the McDonald's Corporation, and six years later bought the exclusive rights to
the McDonald's name. By 1958, McDonald's had sold its 100 millionth hamburger. McDonald's has
a divisional organizational structure. Each division handles a specific operational area. The aim of
this organizational structure is to support autonomy and organizational flexibility. McDonald's
organizational structure has the following characteristics, arranged according to significance: Global
hierarchy, Performance–based divisions, Function–based groups. Global Hierarchy covers all its
operations worldwide. This feature of the organizational structure emphasizes corporate control.
McDonald's CEO, Stephen Easterbrook, directs the activities of all business areas. He passes
mandates down to middle managers, and to the restaurant managers and personnel, etc. This is the
typical system used in many global business organizations. McDonald's used performance as basis
for the new divisions in its organizational
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Negotiations between AT and T and McCaw
MERGER BETWEEN AT&T AND McCAW By: Shilpa Keswani Lakhani Kashif Khan Satyameet
Singh Ahuja Moin Akhtar Madhur Chaudhary With multiple valuation numbers being arrived at
ranging from 5.4 billion dollars to 173 billion, we believe that the most appropriate value for the
organization is 12 billion dollars. It has been arrived at, by maintaining the industry standard of
pricing a potential customer at a 173 dollars. The highest valuation we arrived at was by the DCF
method (193 billion), this number is only plausible when we assume that the organization will grow
at 7% indefinitely. On the other hand the organization was valued the ... Show more content on
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This risk gains great importance on the grounds, that British Telecom has seen a negative return of
almost 50% in its investment (41$ to 24 $), and whether they will be willing to dilute their interest
and take a major loss. Finally since McCawâ€™s aspirations have led it to acquiring a 52% stake in
Lin, the future of Lin and McCawâ€™s relationship could really make or break the fruits of this
merger. Goals: As the negotiator for AT&T, our goal is to ensure that the deal is signed at a price
acceptable to us. Another goal for us is to secure this deal during the current market sentiment when
mergers are at a low and hence we could enjoy the relative cost advantages. Moving on, we need to
get the ideal mix of the cash â€" equity ratio for financing this deal. With a high debt ratio and the
addition of McCawâ€™s debt to our balance sheets, we need to sign the deal which effects this
potentially harmful ratio the least. The goals of people from McCaw would involve driving us to pay
the maximum due to our need. Their motive would likely be to have a high cash component while
receiving the payment to cover their debt and assets. Craig, being an individual who feels the need
to be in control of his companies, and his intention of seeking a partnership, he would look for a
position of influence in the new amalgamated firm. Negotiating Strategy: The strategy weâ€™d like
to adopt is to leverage on the

Factors Affecting Share Price
Factors Affecting Share Prices
What are the major factors that affect share prices in the stock market? This is one of the most
frequently asked questions by stock market participants. There are varied internal and external
factors affecting the price of a share. Internal factors are those that depend on the firm such as share
bonuses, stock split, company dividends, etc. External factors are those which are beyond the
control of the firm, such as raw material prices, economic trends, inflation, investor confidence, etc.
Following is the list of various factors that can influence the price of a stock: * The performance of
the industry or sector that the company is in. The stocks of companies operating within the same
industry tend ... Show more content on Helpwriting.net ...
There are many factors affecting share prices. It is very hard to say just one or two factors affect the
share prices. So, let us have a look at the factors that affect share prices.
Demand and Supply
This is the first factor that affects share prices. When you get to see that more people are buying
stocks, then there is an increase in the price of that particular stock. On the other hand price of stock
falls when more people are selling their stocks. So it is very difficult to predict the Indian stock
market. This is the main reason why you need to get in touch with a good stock market consultant.
There is consultancy for you which can help you a lot on choosing the right stocks for you.
Market cap
It is a very big mistake when you try to guess a company's worth from the price of a stock. You
should know that the more important is the market capitalization of the particular company. This
helps to determine the worth of a company. So market cap serves as an important use to determine
share prices.
Earning per share
Now when it comes to the term, "earning per share", it means the profit that a particular company
has made per share and that too on the last quarter. If you need to know the health of the company
then this is the most important factor. What's more earning per share also influences the buying
tendency in the market that results in the increase of the particular stock price. This is the reason

Stock Options For Employees As A Form Of Compensation Or...
Stock options are granted to employees as a form of compensation or incentives. Both public and
private companies follow this practice. The options give the executives the right but not the
obligation to buy the company's shares at a fixed price before the expiration date is reached. If the
company does well, its shares prices rise. But the employee can buy the shares at a lower price fixed
at the beginning. This will give the employee instant profit. Knowing that he/she will make a profit
when the company's share prices go up, the employee is motivated to work hard for the company to
grow. This is why employee stock options is such a popular method of compensation among many
companies. However according to Hall, critics state that the stock options only motivate the
employee to work harder for the immediate boost of the company's sales so as to increase their own
profits and that the employee has no real interest in the actual long term benefit of the company. It
ends up in a win–win situation between the company and its employees. He cannot sell the options,
he cannot pledge them as a collateral for a loan. Stock options is a contract that the employee /
executive has with the company whereby he/she has the right to buy a specific amount of stock
within a specific period of time. Generally the maximum period is 10 years. The employee has to be
in good standing with the company and has to perform well. The options are vested in him and he
has the right to

Share Price Movement Analysis
Banner ID: B00149402
MODULE ACCT08003
Module: FINANCIAL MANAGEMENT
Module Leader: Steven Leonard
Word Count: 1756
1. Introduction
The London Stock Exchange lists the FTSE 100 which is a share index of stocks of 100 companies
showing the highest market capitalisation. This will be completed by discussing the movement of
the company's share during the time period. The companies will also be compared to the movement
of the shares against each other, against FTSE 100 and against its industry sector. The records and
comparisons will be all in context of Stock Market Efficiency. Stock Market allows a company to be
aware of the trade with shares and finance which is at an agreeable price. Two of the companies
chosen to

Essay about How the Downfall of RBS Could Have Been Prevented
1. What is the core idea behind agency theory?
2. Can you use agency theory to analyse:
a. the rise and downfall of RBS;
b. the mortgage debt crisis more generally?
3. Who is/are the principal(s) and who is/are the agent(s) in your analysis?
Can you think of one threat that arises from the use of agency theory in developing measures aimed
to prevent future banking and/or financial failures?
The emergency rescue of the Royal Bank of Scotland in 2008 has cost the UK government thus the
British taxpayer a huge amount of money. Many people are upset about the high bonuses the RBS
management board have received, both because of the outrageously high amount and because the
performance of the bank on the long–term was not good at all. ... Show more content on
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By pursuing this, the manager (agent) also pursues the goals of the shareholders (principals). At
least that is the idea behind it.
The Royal Bank of Scotland – just like many other banks and businesses – paid out its managers
considerable bonuses for their performances. Managers at RBS started maximising their bonuses by
aggressive actions such as take overs and investing in complex financial products. These actions
caused the profits of RBS to grow rapidly, which meant high bonuses for the managers. These
actions, however, also meant the stability and financial safety of RBS on the long–term got worse
and worse. This was not a problem for the managers as they had already earned their bonuses. A
different bonus structure probably would have prevented the reckless actions of the RBS managers.
Bonuses of managers could be paid out in shares which they are obliged to keep for a certain time
period, e.g. 5 years. That way the share price on the long term is of importance for the managers and
the goal of the shareholders is aligned with the goal of the managers. However, the share price is
dependent on much more factors than the performance of just one manager. There is a risk that
managers would feel they have little to none influence on the share price and still make risk full
decisions. Another possibility would be determining the bonus of a manager on their performance in
the long run, e.g. 5 years. A combination of these two bonus

Executive Officer Chief Executive Officers
Chief Executive Officers (which will be referred to as CEOs for the remainder of this paper) is
arguably the most prestigious position an individual can hold in the business world. There is no
disputing the high level of responsibility necessary to manage the operations and resources of any
company, while also being the key figure between the company's board of directors and the
stakeholders which are effected as a result of the company's actions. Despite the high level of
responsibility, it is worth asking a question that has been up for debate not just in recent years, but
for the past several decades, which is whether or not CEO compensation can be justified? Just to put
into perspective how much one of Canada's highest–paid CEOs makes, ... Show more content on
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The short answer is no. I firmly believe that today's CEOs are overpaid as a result of the use of stock
options as a pay initiative; rewarding CEOs with huge severance packages regardless of whether
they bring success to the company or not; and because they are essentially overpaid managers
Stock Options are one of the Main Culprits for Overcompensation of CEOs
If we break down how CEOs are generally paid we may look at their base salary, which can range
from approximately $300,000 upwards to between 4 and 5 million for Canada's top executives.
What the average person may not be informed about is the additional compensation that is available
to be earned from bonuses, stock options, and other payments on top of the base salary. Canada's
Highest earning CEO in 2015, Gerald W. Schwartz of Onex Corporation, made $86.5 Million of his
total $87.9 Million salary from other such forms of compensation. Stock options are typically used
as a form of compensation because they offer the CEO an incentive laden form of salary that in
theory will make the CEO make decisions in the best interest of the shareholders, and if share prices
go up they too are rewarded. Stock options are truly a no–lose situation for the CEO, because they
are not required to pay for the options and in the event of share price

Literature Reviews : The Reader And The Person Conducting...
Literature reviews can give benefits to both the reader and the person conducting the literature
review. It can provide an overview of the research in the area of which there previously had been a
lack of familiarity (Knopf 2006), It enables the viewing of different perspectives on the subject
matter that is currently out there (Hart 1998) as well as being able to avoid both dead end
approaches as well as the identification of areas in which further research can take place (Gall, Borg
& Gall 1996). Another positive it provides is it can put the current work being undertaken into a
perspective in which it can show where it has added value to the current literature out there The
interaction between exchange rates and stock prices particularly in recent times has attracted a lot of
interest in particular due to increases in world trade and capital movement. Examples of this
occurring can be found in studies from authors such as Katechos 2011, Ehrmann 2011 and Pan &
Liu 2012 among others. This globalisation as well as the development of financial liberation means
that currency represents one of the main determinants of business profitability and share prices
therefore making the link between the two markets vital. A key debate that is highlighted relates to
the macro–level in particular the Granger causality between exchange rates and stock prices.
Theoretical work would suggest that there two approaches in looking at this debate which are the
traditional approach which

Correlation Between Earnings And Share Prices Essay
Question 1
The diagram illustrates the studies by Beaver, Clarke and Wright (1979) and Foster, Olsen and
Shevlin (1984). The studies are based on the Ball & Brown study regarding the relationship between
earnings and share prices. This diagram shows that the size and sign of unexpected Earnings per
Share (EPS) is related to the sign and size of cumulative Abnormal Return (AR).
The graph represents the portfolio in ranking order based on the forecast error and EPS. There are
10 portfolios in which the first portfolio has the most negative forecast error and EPS while the tenth
portfolio has the most positive forecast error and EPS. This means that Portfolio 1 is the worst
performing firm in regarding the earnings (most negative share price reaction) while Portfolio 10 is
the best performing firm (most positive share price reaction). Based on the fourth and fifth portfolio,
the share reaction is very small. The negative abnormal return in portfolio 4 is pretty much
negligible and the same can be said in portfolio 5 where there is only a slight positive share price
reaction. This is due to the fact that the information is not too much of a surprise for the
shareholders to react hugely. Therefore, it can be said that from portfolio 1 to 4, they are the "bad"
news firms while portfolio 5 to 10 are the "good" news firms.
In conclusion, the hypothesis made by the studies is proven to be correct. The firm with the most
negative forecast error and EPS has the most negative AR and

Relationship Between Dividend Policy And Share Price...
3.1 INTRODUCTION
The following describes the process used in an attempt to analyze the impact of dividend policy on
share price volatility for companies listed in the Egyptian stock exchange throughout the period
2008–2012, including a detailed description of the model to be followed along with a specific
definition for the variables to be used and how the data shall be analyzed.
3.2 PROBLEM STATEMENT
After years of theoretical and empirical researches, the association between dividend policy and
share price volatility still remains a source of controversy with absence of general consensus
regarding that relation, were different studies have shown contradicting results using different
models, and sometimes using the same model but on ... Show more content on Helpwriting.net ...
His assumptions for the control variables were as follows: Earnings volatility is to be added to the
equation since the market risk faced by any given firm could have an impact on both its dividend
policy and share price volatility, companies with volatile earnings are perceived as risky investments
and consequently would have a more volatile stock price. Size is to be added to the equation since
smaller firms would usually have less diversified activities as well as less information available to
their investors about their activities, he also assumed that a smaller firm's stock would be more
liquid than that of a larger firm and consequently would have a more volatile market price compared
to that of a larger firm. Also a firm with a larger and more scattered body of shareholders would
have their dividends being used as a signaling method by those shareholders which would impact
the choice of a dividend policy. Growth is to be added to the equation for the assumption of its
negative relationship with dividend policy, mainly due to the

A Theory Of The Efficient Market Hypothesis
The main idea of market efficiency reflects that all the information which is associated with stock
market is basically showing on the stock process in any time. It appears that the stock prices are
unpredictable because the random changing of the new information affects it. Under the
circumstance of that the French mathematician Bachelier (1900) first came up with the idea about
that random information results to the unpredictable prices in marketing concept. After that Osborne
(1964) brought a theory of random walk, and then accomplished by Fama (1965). Since the day of
creation of market efficiency, it has been criticised by researchers all the time; but it still has
significant impact on financial field. In 1970, Fama developed the ... Show more content on
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This essay examines all three forms in different tests. Through the analysis result to implies how
news will affect the prices. Then, making the evaluation suggests the future performance of EMH.
According the definition of EMH, the price which shown on the stock market already were the best
results that shows the company's operating ability. Therefore, it does not matter how much effort
made by the stock firm and investor, and how cautious they are. Information already reacted in the
stock prices, whether it is an expensive stock or a cheaper one. It seems that how much information
could be reflected in price might the distinction of different form of market efficiency. Roberts
(1967) had clearly defined the difference between the weak form, semi–strong form, and strong, and
it further summarised by Fama (1970) to define the information efficiency, which is: "A market in
which prices always 'fully reflect' available information is called 'efficient'". In the fact that several
form market efficiency act in EMH indicates that does those forms real acts in the capital market
should be analysed and proved.
According to Burton and Shah (2013, P8), they argue the strong form market efficiency should
contain both semi–strong and weak form market efficiency; therefore, they define the strong form
market efficiency as the price directly included and exactly reflected all the news which no

How Anglo American's Stakeholders Influence Carroll's...
Anglo American hired Cynthia Carroll as chief executive officer in hopes that she would improve
the overall performance of the company. Failing to meet their expectations would almost guarantee
her time at the company would be short lived. As CEO she must juggle the interests of her
stakeholders and make decisions that benefit the company. It can prove to be a difficult task as
certain stakeholders hold more power and have more influence when it comes to making these
decisions. In this paper I will be using stakeholder theory to discuss how Anglo American's
stakeholders influence Carroll's decision. Carroll is well aware of the dangers her employees face,
however she must decide whether it is in her best interest to increase safety or not. While increasing
safety measures may make the company look better, it will come at great costs. Although Cynthia
Carroll is facing some opposition from it's the South African government and its employees, when
taking in the interests of all the company's stakeholders it is clear that she must keep the mines up
and running without taking more safety precautions. Maintaining a good relationship between
business and government is important to the success every company. In this case, the South African
government is important to think about because they alter how Anglo American deals with its
employees, however they do not have enough power to sway the decision in their favor. The role of
government is to Promote economic development and

Investing $ 10000 Cad : A Canadian Savings Bond Essay
Introduction Given the proposal on whether to invest $10,000 CAD in a Canadian Savings Bond,
with a 1.5% return of $150 over a 3–year period, or an investment of $10,000 CAD in the shares of
Kraft Heinz Co. at $88.95 USD or $119.46 in CAD per share, further analysis on KHC must be
conducted to determine which investment will have the highest rate of return. Factors including net
profits or losses, the share and dividend price, and the debt to equity ratio will be analyzed to
understand current and projected trends. Further investigations will be conducted using the SWOT
analysis and Porter's Five Forces. For ease of the analysis, the investment amount and return, and
analyzed variables will all be converted into USD using an exchange rate of $1.34CAD/USD. The
initial amount available for investment is $7445.93 USD, which can be used towards the purchase of
83 of KHC's shares, or in a Canadian Savings Bond with a return of $111.70 USD. This is subject to
fluctuations of currency in the 3–year projection. Net Profits Kraft Heinz Co. formally became a
merger in July 2015, so analysis will be conducted in a 52 – 68 week basis. The most recent
recorded net income for Kraft Heinz Co. was for the third quarter (July, August, September) of
2016, totalling up to $842 million USD, a huge jump from the net loss of $123 million earned the
first quarter after the corporation's merger and a net profit of $285 million during the second quarter.
Since the end of 2015, KHC's net income has

Financial Principals and Policies
Xin Zheng xinzheng@callutheran.edu Chapter 1
2. What are the differences between shareholder wealth maximization and profit maximization? If a
firm chooses to pursue the objective of shareholder wealth maximization, does this preclude the use
of profit maximization decision–making rules? Explain.
Profit maximization means the company makes profit maximize. Maximize shareholder wealth
states that management needs to bring maximize the value for its owners by make the most efficient
resources and reasonable financial management. Therefore, shareholder wealth maximization
include the profit–maximization model, it considers not only profit maximization model, but also
the timing of return and the risk of the company. The most important the ... Show more content on
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As we know, the returns offered to creditors are fixed but the returns to stockholders are variable. In
this case, RJR was acquired by KKR, the debt of RJR increased from 38% of total capital to nearly
90% of total capital. This will decrease nearly 20% of the value of RJR's bonds. The owner try to get
the hope of receiving better returns through increase the risk of the company's investments. So that,
stockholders be influenced when this happen. The reason is that they don't have chance to share in
these higher returns. Because of this loss of value, Metropolitan Life Insurance Company and other
large stockholders sued RJR for violating the rights of stockholder and protections under the bond
covenants. Ultimately, they settled the suit due to the benefit of Metropolitan. Stockholders cannot
resist this transaction even through this decision may have high risk.
Chapter 2
2. An investor bought 100 shares of Venus Corporation common stock 1 year ago for $40 per share.
She just sold the shares for $44 each, and during the year, she received four quarterly dividend
checks for $40 each. She expects the price of the
Venus shares to fall to about $38 over the next year. Calculate the investor's realized percentage
holding period return.
The investor's realized percentage holding period return= ( Income+ Ending Value– Beginning
value)/ Beginning Value
[(4400–400+4*(40))/4000]*100%=14%

Interco Case Study Essay
Interco Case Study
Interco's financial performance was moderately successful for the 1988 fiscal year. Interco's current
ratio (3.6 to 1) and debt–to–capitalization rate (19.3%) indicate that the company is financially
flexible. Furthermore, both overall sales and net income increased from the previous year (1987)
due largely to the strong performance of Interco's furniture and footwear divisions. Sales in 1988
increased by 14.7% in the furniture division and 34.2% in the footwear division. Despite the
promising nature of these two divisions, Interco still had to contend with the nagging issue of the
underperforming apparel and general retail groups. Due to a number of factors including declining
consumer spending and aggressive ... Show more content on Helpwriting.net ...
Historical data on the indexes of closing prices (see Exhibit 14) attest that the current market trend is
very different to the market trends for some of the benchmarks used (i.e. West Point
Pepperall/Cluett, Peabody). In addition, it is difficult to determine the true nature and equatability
between the proposed benchmarks and Interco for each company can differ in its cash flow and
revenue growth, its riskiness, and its future expansion opportunities. In consequence finding
comparable ratios becomes increasingly problematic and challenging. Thus, the issues that are
specific to Interco limit the strength and validity of the valuation analysis. One must also note that
comparable transaction analyses do not account for premiums or synergies gained in a transaction.
There are a variety of possible questions in regards to Wasserstein, Perella and Co.'s discounted cash
flow analysis of Interco. The financial analysts made some assumptions that could be questioned as
ill–founded. An increase in Working Investment for the Apparel and Retail divisions was predicted
but the Strategic Positioning Goals of Interco dictated that underperforming assets were to be
divested. Based on the 1988 Income Statement of Interco Apparel and Retail divisions, could easily
be judged as underperforming assets. Based on the date it

Airjet Best Parts, Inc. Part 1
Finance | | | | | | | | | | Course Project – Part 1 – Task 1: Assessing loan options for AirJet Best Parts,
Inc. | | | | | | | | | | | | | | | | Question 1: | APR (given) | EAR (calc) | | 2nd ICONV | | | | | | National First |
3.25 + 6.75 = 10% | 10.25 | | NOM = 10% | | | | | | | | | | C/Y = 2 (semiannual) | | | | | | | | | | EFF =
10.2500 | | | | | | | | | | | | | | | | | | | | | | | | | | Regions Best | 13.17 | 13.99 | | 2nd ICONV | | | | | | | | | | NOM
= 13.17% | | | | | | | | | | C/Y = 12 (monthly) | | | | | | | | | | EFF = 13.9948 | | | | | | | | | | | | | | | | | | | | | | | | | ...
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should be approximately $21.64 | | | | | | | | | | | | | | | | Question 3: | | | | | | | | | | I would think that the par
value or stated value of preferred stock would be higher in price because | | | | | it pays a fixed
dividend with a set percentage of the par or face value each period. For example, when | | | | | stock
prices increase, the value and dividends increase for common stock. However, the dividend | | | | |
does not increase for preferred stock because with this type of stock, dividends are a fixed | | | | | |
percentage of par or face value. The payout of common stock dividends will change with increases |
| | | | and decreases in the stock market. If a company liquidates, common stock holders will likely | |
| | | | get nothing because preferred stock holders and creditors will receivetheir share first. Common |
| | | | stock holders will receive anything that is left to claim, which is usually nothing. | | | | | | | | | | | | |
| | | Question 4: | | | | | | | | | | If AirJest Best Parts, Inc. annouces that their dividends will increase at
the end of the year, | | | | | | the stock price computed above would increase. An increase in dividends
generates a higher | | | | | | stock price, which in turns spurs future production and investment in that
company. If the | | | | | | required rate of

Purchase Price Per Cents Per Share
When the margin is 25%
Number of share 100
Purchase price 10 per share
Margin required: 25% 50% 75%
Increasing Price is 56.25 Amount of profit: 750
Margin required 250
Percent return: 300 % Amount of profit: 750
Margin required 500
Percent return: 150 % Amount of profit: 750
Margin required 750
Percent return: 100 % When the margin is 25%
Number of share 100
Purchase price 10 per share
Margin required: 25% 50% 75%
Increasing Price is –6.25 Amount of profit: 250
Margin required 250
Amount of profit: 250
Margin required 500
Amount of profit: 250
Margin required ... Show more content on Helpwriting.net ...
Total value of stick =number of share x Price per share
Margin required: $2,100
Borrowed funds: $1,400
Interest on borrowed funds: 112 %
Proceeds of sale is $4,000
Amount of profit: $500
Purchase price: $3,500
Percents earnted by investor A: 14.29 %
Total interest of the investment: 1000
After 20 Year
With 4 % Future value = $2,191.12
Interest received at the end 20 year: $1,191.12 Amount= 1,000

Rate= 4%
Time= 20 Year Interest rate= $800 In a simple interest rate the saver only earns interest on the
principal amount, so the compound interest rate is higher than the simple interest rate. The saver
wants: 100,000
Interest rate 8%
Present value is= $46,319 PMT= $6,903
Interest factor: 7.2468
PMT: $6,391.70 If the expect yiels 5%
The precent value will be $61,391.33 PMT= $7,950.18
Interest factor: 8.1081
PMT: $7,571.60 Student expect earn: $45,000
Inflation rate: 2%
Future value: $66,868 The future value with inflation rate: 4%
Future value: $98,601 PMT= $2,000 i= 7% n= 100 FVAIF 43.87
FSAD= $87,730.35 PMT= $2,000 i= 10% n= 20
FVAIF 63.00
FSAD= $126,005.0
Money to save of the account: $38,274.65 Future value after

The Pros And Cons Of Corporate Social Responsibility
In this global dispensation, corporate social responsibility has been a topical issue for companies in
making an economic decision for the organization. Especially in the developing economies, there is
no day that passes by without hearing the society or the media reporting of environmental pollution
and unethical misconduct or corporate misbehaviour. This is because of the companies operating in
the oil industry, chemical industry, tobacco industry and mining industry, for example, they directly
or indirectly cause harm to the environment and endanger the lives of the inhabitant. These
continual practices of corporations have led to institutional reforms and strong government
regulations which to some extent poses disadvantages to corporations. ... Show more content on
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It has been debated for businesses, whether to invest in CSR activities. Researchers who are in
favour of CSR argue for the benefits of involving in corporate social activities compared to just
setting policies that will maximize only the value of the firm or its profits. Tobias, (2011) argued that
companies that are involved in CSR are more profitable than their peers who are not socially
responsible to their stakeholders. The critics argue that CSR is an activity that takes away the
attention of managers from the objective of the organization. Managers are stewards of organization
and their task is to invest the assets received from creditors and stockholders to increase profits and
dividends. However, when they turn their attention to activities that are in the sole responsibility of
the government, it will distract operational activities. Friedman (1970) argued in his article "The
social responsibility of business is to increase its profit", artificial legal body is what companies are
referred to by law. As an artificial person if they have any responsibilities to the society then it
should be artificial social responsibility" this implies that corporations' responsibility is not to the
society but it is the work of the

Hilton ITT Case Study Essay
1. Why might Bollenbach have opened his bidding for ITT at $55 per share? What was his likely
strategy?
The $55 value is on the lower range of the analyst eztimates, with a best guess estimate of $67.94.
Since the value of the stock had been below $45 for 4 months, the offer of 55 dollars represented a
29% premium to investors. Bollenbach knew that management would be resistant of any attempt to
be acquired, regardless of price, because of failed previous attempts to negotiate a friendly merger at
year end 1996. The 55–dollar benchmark created an expectation for ITT management to achieve that
level, or higher and the premium is enough to demonstrate to investors it is a real offer. Their
support will be key as they will have a ... Show more content on Helpwriting.net ...
Bollenbach knew that the next steps would be critical or the deal to go through. As such it was
necessary to first research the investors and arbiters to have better negotiation tactics when the time
comes. The resistant board of directors had not changed in the mean time and would likely resist any
offer, including the unlikely event of another contender entering bidding. If the price of the stock fell
below the $55 range, or the Board of Directors changed Bollenback would likely aggressively
negotiate with shareholders to close the deal as quickly as possible.
3. ITT's value has changed a lot over the recent events. Prior to any offer when ITT's stock was
trading at 43 dollars, the stand–alone value of its equity was 16.4 billion dollars. With the 55–dollar
offer to ITT, the company's value went up to approximately 21 billion. After the offer, the stock was
trading at $63.50, which gave the total equity a value of 24.2 billion dollars. With the proposed
trivesture proposal, the company would lose synergistic value as three separate companies,
compared to one large company. Examples of these include a number of overhead costs which gain
economies of scale. In addition, ITT likely has synergistic revenues coming from the fact that it
operates all three business segments. Analyst estimates indicate that the present value of the
synergies whichh ITT stands to loose with the proposed trivesture have a NPV between $900 and

Pros Of The Samsung Incident Essay
Introduction The mobile industry recently has fluctuated between different companies at the top,
since Samsung's most recent phone had been discovered to have several flaws in the design. This
report will summarise the impact of this on the mobile industry and how it affected different
companies in the same expertise. Pros of the Samsung incident Apple iTechPost, in their article
about the note 7 drama says that due to the Samsung incident Apple has seen a huge rise in sales.
This allowed Apple to sell their newest device (iPhone 7) to more customers than they have
originally planned. This allowed apple to pre sell more devices than it has before because the note 7
did damage to Samsung's reputation. "Apple already has a suite of tools to import data from an
Android device and move it onto an iOS enabled device. The software process is as smooth as Apple
can make it. If people decide to make the jump, Apple is holding up a personal parachute in its
Move to iOS app. (Forbes, 2016)" In this quote Forbes states that apple already had a system to
allow android users to efficiently switch to iOS. This application came in very useful when the
Samsung incident happened as iOS has seen a rise in people moving to their system. This also
shows that Apple was prepared for their main competitor to screw up at one point or another. Being
prepared allowed them to sweep in and grab some of the disappointed Samsung customers making
them money in the process, but also gaining another

Microsoft Turnitin : Task 1 : Current Company Profile
Submit your ABP–1 report to TurnItIn as a PDF file
If you submit a NON–PDF file (MS Word or Apple Pages) there will be a 15 point deduction!
Name: McCreery, Kathleen (23414439)
Project: ABP–1 – Financial Analysis
Task 1: Current Company Profile
1.1. Governance table Table 1– Microsoft Corporate governance
(Source: https://finance.google.com/finance?q=NASDAQ%3AMSFT&ei=0gO–
WcnANtT82AbHrI–4AQ)
1.2. Financial profile
Table 2– Microsoft Financial Profile
(Source: https://finance.google.com/finance?q=NASDAQ%3AMSFT&fstype=ii&ei=zgy–
WfGBD5L3jAHi6o_wAg)
1.3. Stock Assessment
Based off trading activity in the prior six months and the current share price relative to its 52 week–
price range, investors are most likely viewing Microsoft ... Show more content on Helpwriting.net ...
Written by the website Seeking Alpha, an educational website with a focus on stock market analysis,
the article predicts a dividend increase based off of new product being released and based off of past
unusual dividend growth. According to the article, prior a year ago, Microsoft "was widely
considered to be a 'dead money' stock" (1). However, after Microsoft's new CEO, Satya Nadella, has
helped change the product focus to cloud computing, Seeking Alpha predicts that Microsoft will
most likely "announce its dividend increase over the next week" and "investors can reasonably
expect at least a 10% hike" (1). With all this being said, the article Microsoft: Dividend Increase
Coming Soon, What Should Investors Expect is recommended for investors to read due to the
article's analysis of current Microsoft stock and how the stock will pay off for investors.
(Source: Sure Dividend Long–term horizon, newsletter provider, dividend investing, High Quality
DividendsMarketplaceUndervalued Aristocrats. "Microsoft: Dividend Increase Coming Soon, What
Should Investors Expect?" Seeking Alpha, Seeking Alpha, 15 Sept. 2017,
seekingalpha.com/article/4107352–microsoft–dividend–increase–coming–soon–investors–expect.
Accessed: September 16,

Competitive Advantage And Disadvantages Of Chester F73524
COMPETITIVE ADVANTAGES AND DISADVANTAGES As members of Chester F73524, we
see ourselves as the biggest player in the low–tech industry. This is a direct result of the competitive
advantage that we possess. By making heavy investments in fixed assets early in the simulation, we
have been able to create a low tech product to be reckoned with; one that is characterized by
sizeable contribution margins, high accessibility and awareness, and a premium price. As a result,
we have achieved an industry–high contribution margin of 45.3%. Furthermore, through our
investments in the TQM module and automation, we have been able to greatly reduce the production
costs associated with producing our low tech product, Cake. Decreasing the R&D cycle time has
allowed us to have our product in the ideal position for a longer time. We believe our competitive
advantage is sustainable for the rest of the simulation, as we plan on keeping our low tech product
for the entire length of the game. Thus, we will capitalize on the benefits of having low labour costs
as a result of our high level of automation, and on the benefits of having low material, overhead, and
administrative costs, resulting from our investments in TQM. Nevertheless, like any realistic
business, we are subject to competitive disadvantages. As we enter the next round, we face a
dramatically decreased high tech market share. This is largely due to our failure to account for our
improved R&D cycle time, causing us to revise Crypto

Effect of Accounting Information on Share Prices
www.ccsenet.org/ijef
International Journal of Economics and Finance
Vol. 4, No. 2; February 2012
The Impact of Accounting Information on Stock Prices: Evidence from the Athens Stock Exchange
Michalis Glezakos University of Piraeus, Department of Insurance and Statistics 80 Karaoli &
Dimitriou, 185 34, Piraeus, Greece E–mail: migl@unipi.gr John Mylonakis (Corresponding author)
10, Nikiforou str., Glyfada, 166 75, Athens, Greece E–mail: imylonakis@vodafone.net.gr
Charalampos Kafouros M.A. University of Piraeus, Greece E–mail: bkafouros@gmail.com
Received: November 23, 2011 doi:10.5539/ijef.v4n2p56 Abstract Past empirical research indicates
that, in an increasing number of countries, certain accounting parameters affect the course ... Show
more content on Helpwriting.net ...
Canibao, Garcia–Ayuso and Rueda (1999) examined accounting data taken from Spanish
companies, showing that the joint explanatory power of earnings and book values has not declined
in the latest decades. However, their results demonstrated a slight decline in the marginal
explanatory power of book values in relation to earnings. The usefulness of accounting data in
business evaluation was, also, evidenced by Ou and Penman (1989), Ohlson (1989, 1995) and
Penman (1996). They explained a company 's internal value by using accounting parameters and
concluded that they can be used to identify stocks that have not been properly evaluated. Τhey, also,
expressed the view that the book value and earnings form the primary accounting variables which
are used to interpret stock prices. Their findings are, also, supported by the empirical studies
conducted by Lev (1996) and Francis and Schipper (1996), who examined data from the US market
during the latest decades. They have, also, found that the explanatory power of accounting variables
has declined. On the other hand, Collins, Maydew and Weiss (1997) have expressed the opinion that
the combined relevance of earnings and book values is progressively increasing over time. On the
contrary, the relevance of extraordinary

Random Walk Theory And Behavioral Finance Theory
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction This chapter will address theories relevant to the behavior of financial markets and
specifically stock prices movement on release of new information into the market, followed by the
determinants of stock price, international and local empirical evidence and finally a summary of the
chapter.
2.2 Theoretical Review
This section will review the theories that will guide the study and their relevance to the study. The
theories to be reviewed include; Efficient Market Hypothesis (EMH), Random Walk Theory and
Behavioral Finance Theory.
2.2.1 Efficient Market Hypothesis (EMH)
The EMH is a popular investment theory in Finance developed by Fama (1965). According to the
EMH, an efficient capital market ... Show more content on Helpwriting.net ...
Different scholars have given different definitions for behavioral finance. According to Shefrin
(2001), behavioral finance is the study of how psychology affects financial decision making
processes and financial markets. Sewell (2007) defined it as the study of the influence of psychology
on the behavior of financial practitioners and the subsequent effect on markets. It is of interest
because it helps explain why and how markets might be inefficient. Behavioral finance is an attempt
to explain and increase understanding of the reasoning patterns of investors, including the emotional
processes involved and the degree to which they influence the decision–making process (Nyamolo,

Theories concerning finance have developed throughout the...
Theories concerning finance have developed throughout the years evolving from the efficient
market theory to behavioural finance. The efficient market theory had a large following in the 1970s
although in the 1980s this theory became problematic as the theory didn't explain the volatility of
the actual stock market. Shiller argued that efficient market model needed to be grounded more in
reality. Behavioural finance was a solution that many looked to and is becoming a favourable model,
as it looks at finance from a broader perspective involving psychology and sociology.
Academics noticed flaws with the efficient market theory paying attention to the volatile stock price
abnormality. Despite these anomalies appearing minor in nature, it ... Show more content on
Helpwriting.net ...
Furthermore there is negative feedback, when investor sentiment becomes corrosive driving the
prices down. Speculative bubbles can be a result of feedback if there is no intervention. These
bubbles can occur on a small scale affecting the price of the daily market, but the effect can be as
dire a global financial crisis due to human interactions.
Feedback is due to cognitive psychology, as humans we seek out the patterns which have the
greatest amount of similarities from the past. A study from Marimon, Speak and Sunder (dsdidsi)
reinforces this idea as subjects are familiarised with the past performance of the stock market
fostering expectations of a bubble. Investors act upon long terms trends rather than reacting to daily
changes. Futhermore Daniel, Hirshleifer and Subramanyam (dasdadh) believe that biased self–
attribution contributes to feedback. It needs to be considered than investors don't automatically.
If there is a surprising disturbance in a determinant of demand other than feedback it can be
magnified for some time affecting prices and thus future prices through a distributed lag. The
feedback model doesn't show substantial serial correlation in contrast to what is widely believed
especially when we have information about the determinants of demand. This is because the noise,
the other factors which drives demand directly affects short–run changes. Although it has minimal
effect on the current price because of lagged others factors

Memorandum: Net Present Value and Apex Investment Partners...
MEMORANDUM
To Apex Investment Partners:
According to my analysis of the Accessline's proposed term sheet, I do not believe that Apex would
serve its own interests, or those of its investing partners, by investing in Accessline according to the
terms proposed. By investing at the proposed valuation, according to the proposed control and
incentive structure, Apex would be shouldering a disproportionate share of the risk should
Accessline fail to meet its performance targets, or require fresh inflows of capital from future
investment rounds. Nor can Accessline take the sort of steps necessary to protect its investment in
the case of management failure.
Should Apex make a counter–offer, I would suggest the following terms: ... Show more content on
Helpwriting.net ...
First and foremost, Apex must insist on the right to elect one director to the board. Series A investors
already have one seat, and the current voting clauses allow Series A to effectively retain control of
decision making by requiring 2/3rds majority for many key decisions. Should future funding rounds
be required, those investors may insist on seats on the board.
Apex must remove antidilution protection from employee shares, as this removes a significant
incentive for employees and management to reduce Accessline's burn rate. However, as Series A
investors retain a veto over the deal, their shares must be allowed to retain anti–dilution protection.
Additionally, we may propose a point at which additional investment rounds (above and beyond
$32m of fresh capital) would cause dilution of ESOP shares at an accelerated rate.
Dividends should be made cumulative and issuable upon a liquidation event or an IPO. Such
dividends may be converted, if the holder desires, to common shares. This will encourage
management to seek a quicker exit.
Liquidation preference must be strengthened in other ways. In my opinion, the current arrangement
allows management and employees to receive unjustified returns in the case of a liquidation. I
suggest a ratio of 1.5 times the Series B purchase price, applicable to Series A shares, with the
remainder to be

Different Types Of Valuation Methods
Within the financial sector, there are many different types of valuation methods in which their
purpose is to receive the share price of a company. Throughout this paper, I will discuss the various
methods and the factors that contribute to the outcomes of each one. The context of this paper will
be discussed in the manners of both the positive and negative aspects of each method. With each
method, I will also explain the factors that significantly influence the price of each method used.
Currently, Cenovus is trading on the Toronto Stock Exchange at a value of $17.83. One of the key
aspects that I will acknowledge is that they currently have a long–term growth value of –108% and
their target price is $18.55. Other factors can be ... Show more content on Helpwriting.net ...
This is one of the most significant downfalls of this method, because you can greatly misprice the
value of the firm without considering the cash flows as well as other variables. Another common
valuation method that one may use is the EV/EBITDA ratio method. This specific method takes into
consideration the value of EBITDA as well as the value of net debt (market value of debt).
Another important consideration that investors must be aware of is the type of depreciation method
that Cenovus uses. Since Cenovus is a large asset company, this is a vital aspect to consider when
using the book value method. If Cenovus depreciates their assets at a faster pace, this will allow
investors to part take in a valuable investment and would cause for a positive pick for their portfolio.
However, if the company depreciates their asset in a slower manner, this could create a higher book
price than what the stock is currently trading at. This may misrepresent the value of the firm to the
investor. Investors should be cautious when considering this type of method for valuing companies.
Therefore, investors should do thorough research in what type of depreciation method Cenovus
uses. The methods include a straight line depreciation or a double declining method. Both have a
significant impact on the share price of the firm when using the book value approach.
One common method within the industry

Affect Audit Opinion on Share Price
18
Mehdi Moradi Mahdi Salehi
The Effect of Qualified Audit Report on Share Prices and Returns: Evidence of Iran
Assistant Professor of Accounting Department, Ferdowsi University of Mashhad, Iran Assistant
Professor of Accounting Department, Guilan University, Iran
Mehrollah Rigi & Mohsen Moeinizade
M.A Student in Accountancy, Ferdowsi University of Mashhad
Abstract
Audit report is the consequence of auditing process and it is a major instrument of communication
between auditor and financial statements ' user. This study attempts to examine the correlation
between qualified audit report and share prices and returns in order to test information content of
qualified audit report. A market–based study conducted on the ... Show more content on
Helpwriting.net ...
Baskin (1972) used the market model to investigate the information content of "consistency
exception" type of qualifications and to discover whether the nature of the "exception" affected
investors ' decisions. He indicated that there was little effect, and that the consistency exception type
audit report possessed no information content. Firth (1978) in order to evaluate the impact of
releasing qualified audit reports on share prices on the date of the release of the report and their
impact on investment decisions and concluded that share prices responded to certain types of
qualifications and therefore the type of qualification influences investors ' decisions. He also added
that investors react differently to various types of audit qualifications. In another survey, Firth
(1980) used questionnaires, so that he could find out whether qualified and unqualified audit reports
have information content to discover whether bank lending decisions and credit analysts ' reactions
were affected by qualifications and the type of qualification. He also implied that these results
indicate the audit report should contain more detail in this situation so as to help readers of the
report to appraise the importance of the qualification for their decision making. Houghton (1983) in
an experimental study, investigate the impact of the audit opinion on the

The Theory Of Behavioral Finance
1. Introduction
Efficient market hypothesis had been a topic of significant interest to the academicians, practitioners
and the corporate executives for a long period. Under Eugene Fama's(1965) survey, it is reflected
that there is a turning point of the modern finance by efficient market hypothesis. However, there
had been a shift in the focus to the theory of behavioral finance (Shiller, 2003) recently. Behavioral
finance is the financial structure which supplements various parts of finance (Gallagher, 2003). It is
the module which supports and displays the behavior of the investment managers and assists in the
overall process of management. Therefore, behavioral finance is a unique art which is required to be
selected in order to understand the outcomes of interactions between the investment managers and
the corporates. Given this background, this essay examines how the behavioral finance has
challenged the efficient market hypothesis and the implications of behavioral finance for investment
managers.
2. Definition and concept of efficient market hypothesis
According to Eugene Fama's (1970), with the rise in the information, there is rapid spreading of the
information which is immediately incorporated in the security prices. This is called the efficient
market hypothesis and it is associated with "random walk" theory. The random walk theory which
suggests the randomness of changes in a series of price forms the basis of efficient market
hypothesis. Thus, the

Permanent And Temporary Components Of Stock Prices Using...
This paper reexamines the permanent and temporary components of stock prices using the vector
error correction estimation method. Fama and French (1988) show that a slow 'mean reverting
component' adjusts stock prices by constructing decile portfolios by firm size. In this context, I
would like to propose the model that able to consider dynamic time–varying component and long
term stable component at the same time. 1. Introduction Fama and French (1988) introduce that
there is a slow mean reverting of stock prices, and the speed of mean reverting for smaller firms is
faster. This is the same idea that no one can obtain excess return using historical prices patterns,
under the market efficiency. This is because all stocks have permanent component, which is the
random walk and drift, and temporary component, which is the stationary error term, in their model.
Thus, prices will be slowly decayed a temporary component when it moves far away from the mean.
In this study, I follow their fundamental idea that stock prices have permanent and temporary
components under the market efficiency. However, I would like to employ the vector error
correction model to capture the permanent equilibrium component and the temporary dynamic
component with a long period of panel data, rather than generating yearly returns by each decile
portfolio. The major benefit of the vector error correction estimation method is that we can directly
compare the speed of adjustment between permanent

Why Bollenbach Opened His Bidding at $55 per Share
1. Why might Bollenbach have opened his bidding for ITT at $55 per share? What was his likely
strategy? The $55 value is on the lower range of the analyst eztimates, with a best guess estimate of
$67.94. Since the value of the stock had been below $45 for 4 months, the offer of 55 dollars
represented a 29% premium to investors. Bollenbach knew that management would be resistant of
any attempt to be acquired, regardless of price, because of failed previous attempts to negotiate a
friendly merger at year end 1996. The 55–dollar benchmark created an expectation for ITT
management to achieve that level, or higher and the premium is enough to demonstrate to investors
it is a real offer. Their support will be key as they will have a ... Show more content on
Helpwriting.net ...
Below are the FCF estimates relevant to the merger of ITT from Hilton 's perspective, and a
sensitivity analysis based on possible discount rates: Value of ITT to Hilton Lodging $ 355 $ 127 $
102 $ 159 $ 213 Gaming $ (598) $ (11) $ 195 $ 213 $ 235 Education $ 19 $ 24 $ 27 $ 31 $ 35 World
Directories $ 355 $ 127 $ 102 $ 159 $ 213 Trivesture Synergies 69 72 75 78 81 Merger Synergies
100 100 100 100 100 Terminal Value $ 14,114 Discount Rate Enterprise Value Debt Value of Equity
Price Per Share 7.00% $12,409.12 $4,000 $8,409.12 $72.49 7.50% $12,140.72 $4,000 $8,140.72
$70.18 8.00% $11,879.52 $4,000 $7,879.52 $67.93 8.50% $11,625.30 $4,000 $7,625.30 $65.74
9.00% $11,377.85 $4,000 $7,377.85 $63.60 9.50% $11,136.93 $4,000 $7,136.93 $61.53 10.00%
$10,902.37 $4,000 $6,902.37 $59.50 10.50% $10,673.95 $4,000 $6,673.95 $57.53 11.00%
$10,451.49 $4,000 $6,451.49 $55.62 4. What do you expect the price of ITT's equity would be if
Hilton's bid were to fail? Would it collapse to its pre–tender–offer trading value of around $44?
Would it remain stable at its existing level of around $60, or would it rise to meet

Research Paper
FIN301 Principles of Finance
SESSION LONG PROJECT
MODULE 2
Present Value
TUI University
June 10, 2013
Carnival Corporation is my company of choice for this course. As pointed out previously, the share
price rose $1.80 from 2012 to 2013. Using this data and data gathered from Yahoo Finance, I will
determine the futures price of 100 shares in 2014.
Futures price is defined as the price at which the two participants in a futures contract agree to
transact on the settlement date (Futures Price, n.d.). If I were to go into agreement to buy shares of
... Show more content on Helpwriting.net ...
This is what I will pay regardless of the price of the shares at the end of this agreement. Though
looking at the past price, there is a chance to have a slight profit. The stock price has been steady for
the past year, so I believe this would be a safe futures contract as a new investor. And there is
potential for profit as six months prior, the stock price was $37.14, which would be 8% more and a
$2.60 profit based on the price I agreed to pay at the end of our 12–month contract in June 2014.
The total profit would be $2.60 X 100 = $260. Based on this and other data on the stock screener,
the stock seems pretty stable. There is more of a chance to gain a profit from this purchase than if I
were to place $3,449 in my bank account.
My bank account currently provides a .25% annual percentage yield. Therefore, where I could gain
$260 in a one year period with the futures price, I would gain much less if it were in my bank
account. $3,449 X .0025 = $8.62 would be the amount I would gain which is a difference of $251.38
that I could possibly forfeit if I decided to use this method instead. While there are many options for
investing, I would pick the futures price option over my back account and their CD–options, which
is still only .71% for one year. This is

High Liner Foods Share Price History For The Past Five Years
3. Market (Stock) Analysis
High Liner Foods Share price history for the past five years
Figure 21. High Liner Foods inc. Price History Source: Yahoo Finance Canada,
https://ca.finance.yahoo.com/echarts?s=HLF.TO#symbol=HLF.TO;range=
High Liner Foods is the Market leader of the value–added seafood, and we can see that strong
position with the analysis of the share market price during the last five years.
The Company share price in the year of 2011 stood almost the same, from $ 8,27/share in January
1st to $ 8,17 in December 31st . This was a reflex of a period of great economic uncertainty, when
unemployment was very high making consumers to be more careful and save money. We had also
an American credit rating downgrade and the European debit crisis.
But the company results were very good with sales and earnings with a strong increase. Sales
increased for the third consecutive year, from 177 million pounds in 2010 to more than 200 million.
Revenue was up 14,3% to $ 668,6 million, with a contribution of the Viking Seafoods Inc, that was
integrated in April, of $ 37,5 million.
In 2012 the share price had a significant increase of 96,94%, beginning the year with the value of
$8,00 and closing de period with $ 15,77. The main reason was the inclusion of High liner Foods
Incorporated in the S&P/TSX SmallCap Index. in September 21st . According to the president and
CEO of the company it was an important milestone in their history, providing liquidity to the stocks.
The sales

The Blizzard Inc.
When it comes to gamers there is not one who does not know who Activision Blizzard Inc. is. Even
those who do not play any video games tend to know that blizzard commands a legion of followers,
I know that throughout high school I logged ridiculous hours into their game 'Diablo II' which was a
top selling game of the time. In gaming the Blizzard Company has created more top ranked games
bringing in more money than most people can truly fathom. When all is said and done what is the
true value of such a company, how much money do they control in our economy? Who is it that can
rival such a behemoth of a company? Within these few pages I will try to encompass the mass of
this company, what it is that drives them and to what extent their influence travels within our world
and perhaps beyond. Although Blizzard was created in 1991 it was not public, it was not until
September, 30 1993 that it was made a publically traded company. Upon its first day of trading it
commanded a price of only eighty three cents per share. Today it has a price of over thirty five
dollars per share with a record high price of $38.71 just a week ago. Considering the price it started
at this is a remarkable feat, this company started small and has weathered some of the worst
economic storms we have seen in our history. Though we have recovered a great deal since the
housing market collapse, as a whole the market recently has been going down across all boards I
believe as a result of the oil prices

Essay on Conrail Case
Perspective: Conrail shareholder.
1. Why does CSX want to buy Conrail? How much should CSX be willing to pay?
Some of the reasons why CSX wants to buy Conrail are, to increase the consolidation in the Railway
industry. Further consolidation typically means lower cost for the consolidators fx because
economies of scale and synergies and ....
A consolidation also results in lower competition inside the industry, which typically follows with
higher, or at least not lower, prices and therefore higher profit.
Another argument that is mentioned in the materials is that CSX want to do the merger, before
another company tries. CSX doesn't want Norfolk southern to get Conrail.
CSX is willing to pay $92.84 per share.
2. Analyze the ... Show more content on Helpwriting.net ...
As the material (Harvard Business School, 9–298–006, July 2005) tells, would CSX together with
the management and the employees trust control 35,5% for the shares, and therefore would they
only need 14,6% to vote in favor of the opting–out, so it would pass. Then afterward would it be
possible for CSX to acquire the additional 20,3 % due to the first tier second stage, and then could
their proceed with the back–end offer for the remaining 60%. As mention earlier, because CSX
choose to offer two different prices to Conrails shareholders, were they required to do the first tier in
two stages.
3. As a Conrail shareholder, would you tender your shares to CSX at $92.50 in the first–stage offer?
Why or why not?
Consolidated Rail – Case B
4. Why did Norfolk Southern make a hostile bid for Conrail?
Due to the (Harvard Business School, 9–298–095, May 2001) Norfolk Southern expresses its
concern about a merger between CSX and Conrail. It would have significant consequences on
Norfolk Southern way of doing business. They could be excluded from important markets. As a
broker says letting the CSX Contrail merger pass could mean the end of doing business for Norfolk
Southern. We believe that this is the main reason, but Norfolk Southern can also see synergies
inform of both cost savings and increasing revenues.

5. In a bidding war, what should each bidder be willing

Dividend Policy and Share Prices
Introduction
In this paper the impact of dividend policy of the companies on the firm's share prices is analysed
and different views in the context of the semi–strong form of the efficient market hypothesis are
contrasted. The overview of the traditional and most recent empirical investigations of the stock
market reaction to the dividend announcements is provided and different findings are discussed and
compared.
Three companies have been selected from the FTSE All share price index. These companies are
Tesco, Burberry and Vodafone. These firms belong to different sectors of the economy. Tesco is the
largest retailer in the UK, Burberry is a fashion firm and Vodafone is the telecommunication services
company. The dividends and ... Show more content on Helpwriting.net ...
Dividend Announcements and Share Prices
Dividend announcements and their impact on share prices can be explained by the semi strong form
of the efficient market hypothesis (EMH). Efficient market hypothesis implies that the only thing
that may impact the stock prices is new information, since all other possibly influencing parameters
are already included in the firm's stock price (Palan, 2004).The efficient market hypothesis may be
divided into three forms: the weak form, the semi–strong form, and the strong form. The weak form
implies that share prices bear or reflect the past prices and trade volume information, the semi–
strong form adds publicly available information to the weak form, and the strong form adds even
insider information to the efficiency approach (Harder, 2008).
Empirical evidences show that successive changes in stock prices are independent and this
independence is in line with the efficient market hypothesis, as markets promptly react to the new
information (Fama et al., 1969). In this context it may be assumed that dividend announcements
convey particular positive information about the company and provide signals about future
performance of the firm. The decision about paying dividends is made by the firm's managers and
often supported by shareholders' voting. Since dividend announcements bear useful information,
from the efficient market hypothesis view point this

Case: Dow’s Bid for Rohm and Haas
Why does Dow want to buy Rohm and Haas? Was the $78 per share bid reasonable? Why was the
deal structured as all cash?
Dow Chemical ("Dow") wants to acquire Rohm and Haas ("Rohm") for its strong operational and
strategic fit. When Liveris became Chairman and CEO of Dow, he shifted the focus to growth and
profitability by becoming an asset light producer of commodity chemicals and becoming a high–
valued–added producer of specialty chemicals and advanced materials. This combination is a step in
that direction that would bring together best–in–class products and technologies, broad geographic
reach, and strong industry channels for growth opportunities. Rohm would also expand Dow's
network into emerging markets and alter Dow's earnings ... Show more content on Helpwriting.net
...
Thus, if one completely removes the revenue synergies, as these are typically the most difficult to
achieve in comparison to cost synergies, the implied share prices fall right near the $78 bid price,
which makes it a reasonable bid.
The reason why it was structured as an all–cash deal was driven by the fact that 32% of Rohm's
shares wanted to sell substantially all of their shares within 1.5 years. Furthermore, Dow had a
potential cash inflow of over $7 billion in cash from the JV agreement, a $4 billion financing option
of 8.5% convertible preferred equity and $13 billion in bridge loans. When compared to the 8.5%
WACC, these options may potentially be less expensive than issuing equity.
What are the major deal risks inherent in this merger transaction? How and to whom does the
merger agreement allocate these key risks? (See, in particular, case exhibit 4.)
Some of the major deal risks inherent in this merger transaction are as follows. Dow will have to
make integration decisions that are absolutely critical to making the acquisition pay off through the
cost and growth synergies. Additionally, Dow agreed to a contract with no financing out, which
means that the offer is not contingent on Dow securing financing. Furthermore, the material adverse
effect clause stipulates that any adverse effect to the specialty chemical industry or the economy or
markets generally is excluded. Also, if the merger does

The Old Constant : Human Psychology
The Old Constant: Human Psychology
According to the Efficient Market Hypothesis, competition will instantaneously cause the effects of
new information to be reflected in actual share prices. This assumption presupposes that the
participants in a market act rationally. The concept of the homo economicus has a long–standing
history in economics and is a relevant premise of efficient markets. According to the founder of
economic thought, Adam Smith, the homo economicus is human who constantly peruses self–
interest while always acting rational to reach his subjectively defined ends (Coase, 1994). At times,
psychologists joined this discussion and challenged the concept of the economic man. Among the
most prominent researchers who question the rationality in human decision making is Daniel
Kahneman. Kahneman challenged the rationality in decision making processes and is one of the
founders of behavioral economics. Behavioral economists argue that markets are not perfectly
efficient because various cognitive biases in humans (HBR, 2015). Among the most prominent
cognitive biases that influence stock prices are the Overconfidence Hypothesis and the Disposition
Effect. The Overconfidence Hypothesis describes the tendency of individual investors to trade
excessively based on a mistaken belief that they can pick winners and losers better than investment
professionals. Overconfidence is characterized by three main tendencies. First, overconfident
investors tend to overreact to

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