Health Care Industrys Environmental Footprint Health And Social Care Essay

In this article, the writers address the importance of nurses being a portion of the Electronic Health Records ( EHR ) procedure. Having nurses as the major portion in direct patient attention and their input on the design and execution of the EHR. The article besides talks about the Health Information Technology ( HIT ) and the authoritiess push to standardise records. The demand to diminish unneeded trial or extra trials from different suppliers is at the head of this end. The Federal authorities passed the American Recovery and Reinvestment Act of 2009 and the Health Information Technology for Economic and Clinical Health ( HITECH ) Act as an inducement to Medicare and Medicaid suppliers to implement EHR in their patterns. The article besides discusses many facets of the nurses ‘ day-to-day occupation demands and how this EHR enhances or deters from direct patient attention.Turley, M. , Porter, C. , Garrido, T. , Gerwig, K. , Young, S. , Radler, L. , & A ; Shaber, R. ( 2011 ) . Use Of Electronic Health Records Can Improve The Health Care Industry ‘s Environmental Footprint. Health Affairs, 30 ( 5 ) , 938-46. Retrieved from hypertext transfer protocol: //persimmon.tesc.edu:2059/docview/868915481? accountid=40921In this article the writers province â€Å" We estimate that Kaiser Permanente ‘s electronic wellness record system, which covers 8.7 million donees, eliminated 1,000 dozenss of paper records and 68 dozenss of x-ray movie, and that it has lowered gasoline ingestion among patients who otherwise would hold made trips to the physician by at least three million gallons per twelvemonth † ( Turley et al. , 2011, p. 938 ) . Kaiser Permanente is a California leader in the Health Care Industry. The article states the Federal Government inducements to go electronic in all wellness records get downing in 2011, from the HITECH and the American Recovery and Reinvestment Act of 2009 ( ARRA ) . This article looks into the environmental effect s of EHR has on â€Å" resource ingestion and nursery gas coevals or preservation † ( Turley et al. , 2011, p. 938 ) . â€Å" THE ECO-HEALTH FOOTPRINT The Eco-Health Footprint has been developed by the Global Safety and Health Initiative, a partnership of nongovernmental organisations dedicated to bettering the wellness attention industry ‘s environmental impact and patients ‘ and workers ‘ wellness and safety.3 The Eco-Health Footprint identifies six major classs of environmental impact within wellness attention. The six are nursery gases, including anaesthetic and medical gases ; waste, including solid, regulated medical, risky, electronic, building and destruction, and reclaimable waste ; toxic chemicals ; H2O usage, including H2O used in medical procedures, imbibing H2O, and effluent ; air pollutants regulated by national air-quality criterions, such as ozone, particulate affair, C monoxide, N dioxide, S dioxide, and lead ; 8 and the usage of land for e difices † ( Turley et al. , 2011, p. 940 ) . The survey shows the effects the computing machines have on the nursery consequence on the Earth. It besides shows the still continued usage of paper during outpatient visits with printed patient drumhead sheets. They have noticed a lessening in transit usage and lessening in gas ingestion for less travel for unneeded visits to the office. The survey shows that by utilizing EHR, the state would profit from a greener environment. DesRoches, C. M. , Campbell, E. G. , Vogeli, C. , Aheng, J. , Rao, S. R. , Shields, A. E. , †¦ Jha, A. K. ( 2010, April ) . Electronic Health Records ‘ Limitedd Successes Suggest More Targeted Uses. Health Affairs, 29 ( 4 ) , 639-46. Retrieved from hypertext transfer protocol: //persimmon.tesc.edu:2059/docview/204623833? accounted-40921 In this article the writers examine the demand for EHR to increase the quality of patient attention and more policies to see this can be obtained. The article besides examines that in smaller establishments there is limited information sing the usage of EHR and meaningful usage. â€Å" Therefore, we used informations from our recent national study of electronic wellness record acceptance among acute attention infirmaries to look into the relationship between the acceptance of electronic wellness records and cardinal single maps, and available steps of wellness attention quality and efficiency. Specifically, we assessed whether electronic wellness record acceptance was associated with better public presentation on standard process-of-care steps, lower mortality and readmission rates, shorter lengths-of-stay, and lower inmate costs † ( DesRoches et al. , 2010, p. 639 ) . The survey consequences showed there was no existent difference in attention between infirmaries that have EH R and those who did non hold EHR.Fleming, N. S. , Culler, S. D. , McCorkle, R. , Becker, E. R. , & A ; Ballard, D. J. ( 2011, March ) . The Financial And Nonfinancial Costs Of Implementing Electronic Health Record In Primary Care Practices. Health Affairs, 30 ( 3 ) , 481-9. Retrieved from hypertext transfer protocol: //persimmon.tesc.edu:2059/docview/857836970? accountid=40921The writers researched barriers to physician offices to implementing EHR. The top barriers noted by doctors in different metropoliss were deficiency of support, the high startup costs and that the system they choose will be disused before they can implement the service. The biggest factor in researching this was to garner three groups, a physician advisory group, and an ambulatory electronic wellness record commission and the Healthtexas Best Care Committee to implement bundles needed to upgrade to the EHR. The writers besides took fiscal records to see how much clip was spent by each individual and the cost th at was accrued because of it. â€Å" The Department of Health and Human Services is making regional extension centres to help suppliers with the acceptance of electronic wellness record systems. † This coaction has the possible to turn to many of the challenges to electronic wellness record execution faced by single suppliers or little physician patterns † ( Fleming, Culler, McCorkle, Becker, & A ; Ballard, 2011, p. 488 ) . Lowery, M. , Dobbs, J. , & A ; Monkhouse, A. ( 2012, September ) . Implanting An Electronic Health Record Within A Health Visiting Service: The Journal of the Health Visitor ‘s Association. Community Practitioner, 85 ( 9 ) , 20-3. Retrieved from hypertext transfer protocol: //persimmon.tesc.edu:2059/docview/1039540619? accountid=40921 The writers attempt to implement an EHR in two counties in London to a visiting nurses association. As with concerns from the United States, London besides demanded rigorous privateness and protection of patient records throughout the procedure of implementing EHR. The biggest push for EHR was for child wellness, school nursing and wellness visiting nurses. They formed a undertaking board to oversee and give advice on what was needed in the EHR. During the first stage of the undertaking they found they did non hold specific adequate standard for what the Health Visitor ‘s Association needed. Part of the 2nd stage was to engage IT Facilitators to take the notes from stage 1 and incorporate what was needed to back up their demands. The writers found they are able to implant an EHR into sing nurses and comply with all regulations on safe guarding patient security and maintain accurate charting. Bruen, B. K. , Ku, L. , Burke, M. F. , & A ; Buntin, M. ( 2011, March ) . More Than Four In Five Office-Based Doctor Could Qualify for Federal Electronic Health Record Incentives. Health Affairs, 30 ( 3 ) , 472-80. Retrieved from hypertext transfer protocol: //persimmon.tesc.edu:2059/docview/857837337? accountid=40921The writer states that physician offices that care for Medicare and Medicaid patients can measure up for inducements to implement EHR into their offices from the authorities. Doctors have felt they lack information sing EHR in their private patterns related to whether systems will suit their demands, cost and the worth of the investing. These concerns were addressed by HITECH by holding federal criterions for EHR and inducements for cost of execution. The inducement for holding EHR is doctors who treat Medicare patients will have up to $ 18,000 by 2012 and worsening sums over the following four old ages after that. Besides if a doctor does non hold an EHR by 2015 will ha ve reduced Medicare benefits. There are besides inducements for doctors who treat 30 % Medicaid patients will have up to $ 21,250. Pediatricians who see 20-30 per centum of Medicaid patients besides qualify for an inducement but at a lower fee. The writer found that about 82 per centum of doctors were eligible for the authorities inducement program.Song, PhD, P. H. , McAlearney, ScD, A. , Robbins, J. , McCullough, PhD, J. S. , & A ; Smith, B. T. ( 2011, May/June ) . Researching The Business Case for Ambulatory Electronic Health Record System Adoption/Practioner Application. Journal of Healthcare Management, 56 ( 3 ) , 169-82.â€Å" The intent of this survey was to analyze the function of concern instance analysis in healthcare organisations ‘ determinations to put in ambulatory EHR systems, and to place what factors organisations considered when warranting an ambulatory EHR † ( Song, McAlearney, Robbins, McCullough, & A ; Smith, 2011, p. 169 ) . Research workers have sh own that doctors have shown a deficiency of positive return in their investing is a hindrance in implementing EHR. Because of the deficiency of information for a concern instance, the writer looks into how healthcare organisations can warrant puting in ambulatory EHR. Anticipated reimbursement alterations were one of the largest factors for a concern instance in implementing an ambulatory EHR system. Besides the estimated authorities stimulation bundle was another inducement in implementing and ambulatory EHR system. â€Å" all organisations we studied perceived that a positive concern instance for EHR system acceptance existed, and this positive concern instance was driven by considerations about indirect fiscal benefits † ( Song et al. , 2011, p. 182 ) .ReferencesBruen, B. K. , Ku, L. , Burke, M. F. , & A ; Buntin, M. ( 2011, March ) . More Than Four In Five Office-Based Doctor Could Qualify for Federal Electronic Health Record Incentives. Health Affairs, 30 ( 3 ) , 472-80. Retrieved from hypertext transfer protocol: //persimmon.tesc.edu:2059/docview/857837337? accountid=40921 DesRoches, C. M. , Campbell, E. G. , Vogeli, C. , Aheng, J. , Rao, S. R. , Shields, A. E. , †¦ Jha, A. K. ( 2010, April ) . Electronic Health Records ‘ Limitedd Successes Suggest More Targeted Uses. Health Affairs, 29 ( 4 ) , 639-46. Retrieved from hypertext transfer protocol: //persimmon.tesc.edu:2059/docview/204623833? accounted-40921 Fleming, N. S. , Culler, S. D. , McCorkle, R. , Becker, E. R. , & A ; Ballard, D. J. ( 2011, March ) . The Financial And Nonfinancial Costs Of Implementing Electronic Health Record In Primary Care Practices. Health Affairs, 30 ( 3 ) , 481-9. Retrieved from hypertext transfer protocol: //persimmon.tesc.edu:2059/docview/857836970? accountid=40921 Lowery, M. , Dobbs, J. , & A ; Monkhouse, A. ( 2012, September ) . Implanting An Electronic Health Record Within A Health Visiting Service: The Journal of the Health Visitor ‘s Association. Community Practitioner, 85 ( 9 ) , 20-3. Retrieved from hypertext transfer protocol: //persimmon.tesc.edu:2059/docview/1039540619? accountid=40921 McBride, PhD, RN, S. , Delaney, BSN, RN-BC, J. M. , & A ; Tietze, PhD, RN-BC, FHIMSS, M. ( 2012 ) . Health Information Technology and Nursing. AJN, American Journal of Nursing, 112 ( 8 ) , 36-42. hypertext transfer protocol: //dx.doi.org/10.1097/01.NAJ0000418095.31317.1b Song, PhD, P. H. , McAlearney, ScD, A. , Robbins, J. , McCullough, PhD, J. S. , & A ; Smith, B. T. ( 2011, May/June ) . Researching The Business Case for Ambulatory Electronic Health Record System Adoption/Practioner Application. Journal of Healthcare Management, 56 ( 3 ) , 169-82. Retrieved from hypertext transfer protocol: //persimmon.tesc.edu:2059/docview/870480359? accountid=40921 Turley, M. , Porter, C. , Garrido, T. , Gerwig, K. , Young, S. , Radler, L. , & A ; Shaber, R. ( 2011 ) . Use Of Electronic Health Records Can Improve The Health Care Industry ‘s Environmental Footprint. Health Affairs, 30 ( 5 ) , 938-46. Retrieved from hypertext transfer protocol: //persimmon.tesc.edu:2059/docview/868915481? accountid=40921

Financial Management Chapter 8 K

ey Chapter 8 Stocks and Their Valuation LEARNING OBJECTIVES After reading this chapter, students should be able to: †¢ Identify some of the more important rights that come with stock ownership and define the following terms: proxy, proxy fight, takeover, and preemptive right. †¢ Briefly explain why classified stock might be used by a corporation and what founders’ shares are. †¢ Differentiate between closely held and publicly owned corporations and list the three distinct types of stock market transactions. Determine the value of a share of common stock when: (1) dividends are expected to grow at some constant rate, (2) dividends are expected to remain constant, and (3) dividends are expected to grow at some super-normal, or nonconstant, growth rate. †¢ Calculate the expected rate of return on a constant growth stock. †¢ Apply the total company (corporate value) model to value a firm in situations when the firm does not pay dividends or is privately he ld. †¢ Explain why a stock’s intrinsic value might differ between the total company model and the dividend growth model. Explain the following terms: equilibrium, marginal investor, and Efficient Markets Hypothesis (EMH); distinguish among the three levels of market efficiency; briefly explain the implications of the EMH on financial decisions; and discuss the results of empirical studies on market efficiency and the implication of behavioral finance on those results. †¢ Read and understand the stock market page given in the daily newspaper. †¢ Explain the reasons for investing in international stocks and identify the â€Å"bets† an investor is making when he does invest overseas. Define preferred stock, determine the value of a share of preferred stock, or given its value, calculate its expected return. 1. LECTURE SUGGESTIONS This chapter provides important and useful information on common and preferred stocks. Moreover, the valuation of stocks reinforc es the concepts covered in both Chapters 6 and 7, so Chapter 8 extends and reinforces those chapters. We begin our lecture with a discussion of the characteristics of common stocks, after which we discuss how stocks are valued in the market and how stock prices are reported in the press. We conclude the lecture with a discussion of preferred stocks.The details of what we cover, and the way we cover it, can be seen by scanning Blueprints Chapter 8. For other suggestions about the lecture, please see the â€Å"Lecture Suggestions† in Chapter 2, where we describe how we conduct our classes. DAYS ON CHAPTER: 3 OF 58 DAYS (50-minute periods) ANSWERS TO END-OF-CHAPTER QUESTIONS 8-1True. The value of a share of stock is the PV of its expected future dividends. If the two investors expect the same future dividend stream, and they agree on the stock’s riskiness, then they should reach similar conclusions as to the stock’s value. -2A perpetual bond is similar to a no-grow th stock and to a share of preferred stock in the following ways: 1. All three derive their values from a series of cash inflows–coupon payments from the perpetual bond, and dividends from both types of stock. 2. All three are assumed to have indefinite lives with no maturity value (M) for the perpetual bond and no capital gains yield for the stocks. 8-3Yes. If a company decides to increase its payout ratio, then the dividend yield component will rise, but the expected long-term capital gains yield will decline. 8-4No. The correct equation has D1 in the numerator and a minus sign in the denominator. -5a. The average investor in a listed firm is not really interested in maintaining his proportionate share of ownership and control. If he wanted to increase his ownership, he could simply buy more stock on the open market. Consequently, most investors are not concerned with whether new shares are sold directly (at about market prices) or through rights offerings. However, if a ri ghts offering is being used to effect a stock split, or if it is being used to reduce the underwriting cost of an issue (by substantial underpricing), the preemptive right may well be beneficial to the firm and to its stockholders. . The preemptive right is clearly important to the stockholders of closely held firms whose owners are interested in maintaining their relative control positions. SOLUTIONS TO END-OF-CHAPTER PROBLEMS 8-1D0 = $1. 50; g1-3 = 5%; gn = 10%; D1 through D5 = ? D1 = D0(1 + g1) = $1. 50(1. 05) = $1. 5750. D2 = D0(1 + g1)(1 + g2) = $1. 50(1. 05)2 = $1. 6538. D3 = D0(1 + g1)(1 + g2)(1 + g3) = $1. 50(1. 05)3 = $1. 7364. D4 = D0(1 + g1)(1 + g2)(1 + g3)(1 + gn) = $1. 50(1. 05)3(1. 10) = $1. 9101. D5 = D0(1 + g1)(1 + g2)(1 + g3)(1 + gn)2 = $1. 50(1. 05)3(1. 10)2 = $2. 1011. 8-2D1 = $0. 50; g = 7%; ks = 15%; [pic] = ? [pic] -3P0 = $20; D0 = $1. 00; g = 10%; [pic] = ? ; ks = ? [pic] = P0(1 + g) = $20(1. 10) = $22. ks= [pic] + g = [pic] + 0. 10 = [pic] + 0. 10 = 15. 50%. ks = 15. 50%. 8-4Dp = $5. 00; Vp = $60; kp = ? kp = [pic] = [pic] = 8. 33%. 8-5a. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2. b. 0 1 2 3 | | | | 1. 25 1. 50 1. 80 1. 89 37. 80 = [pic] The horizon, or terminal, value is the value at the horizon date of all dividends expected thereafter. In this problem it is calculated as follows: pic] c. The firm’s intrinsic value is calculated as the sum of the present value of all dividends during the supernormal growth period plus the present value of the terminal value. Using your financial calculator, enter the following inputs: CF0 = 0, CF1 = 1. 50, CF2 = 1. 80 + 37. 80 = 39. 60, I = 10, and then solve for NPV = $34. 09. 6. The firm’s free cash flow is expected to grow at a constant rate, hence we can apply a constant growth formula to determine the total value of the firm. Firm Value = FCF1/(WACC – g) Firm Value = $150,000,000/(0. 10 – 0. 05) F irm Value = $3,000,000,000.To find the value of an equity claim upon the company (share of stock), we must subtract out the market value of debt and preferred stock. This firm happens to be entirely equity funded, and this step is unnecessary. Hence, to find the value of a share of stock, we divide equity value (or in this case, firm value) by the number of shares outstanding. Equity Value per share = Equity Value/Shares outstanding Equity Value per share = $3,000,000,000/50,000,000 Equity Value per share = $60. Each share of common stock is worth $60, according to the corporate valuation model. 8-7a. 0 1 2 3 4 | | | | 3,000,000 6,000,000 10,000,000 15,000,000 Using a financial calculator, enter the following inputs: CF0 = 0; CF1 = 3000000; CF2 = 6000000; CF3 = 10000000; CF4 = 15000000; I = 12; and then solve for NPV = $24,112,308. b. The firm’s terminal value is calculated as follows: [pic] c. The firm’s total value is calculated as follows: 0 1 2 3 4 5 | | | | | | 3, 000,000 6,000,000 10,000,000 15,000,000 16,050,000PV = ? 321,000,000 = [pic] Using your financial calculator, enter the following inputs: CF0 = 0; CF1 = 3000000; CF2 = 6000000; CF3 = 10000000; CF4 = 15000000 + 321000000 = 336000000; I = 12; and then solve for NPV = $228,113,612. d. To find Barrett’s stock price, you need to first find the value of its equity. The value of Barrett’s equity is equal to the value of the total firm less the market value of its debt and preferred stock. Total firm value$228,113,612 Market value, debt + preferred 60,000,000 (given in problem) Market value of equity$168,113,612Barrett’s price per share is calculated as: [pic] 8-8FCF = EBIT(1 – T) + Depreciation – [pic] – ([pic] = $500,000,000 + $100,000,000 – $200,000,000 – $0 = $400,000,000. Firm value = [pic] = [pic] = [pic] = $10,000,000,000. This is the total firm value. Now find the market value of its equity. MVTotal= MVEquity + MVDebt $10,000,0 00,000= MVEquity + $3,000,000,000 MVEquity= $7,000,000,000. This is the market value of all the equity. Divide by the number of shares to find the price per share. $7,000,000,000/200,000,000 = $35. 00. 8-9a. Terminal value = [pic] = [pic]= $713. 33 million. . 0 1 2 3 4 | | | | | -20 30 40 42. 80 ($ 17. 70) 23. 49 522. 10 753. 33 $527. 89 Using a financial calculator, enter the following inputs: CF0 = 0; CF1 = -20; CF2 = 30; CF3 = 753. 33; I = 13; and then solve for NPV = $527. 89 million. c. Total valuet=0 = $527. 89 million. Value of common equity = $527. 89 – $100 = $427. 89 million. Price per share = [pic] = $42. 79. 8-10The problem asks you to determine the value of [pic], given the following facts: D1 = $2, b = 0. 9, kRF = 5. %, RPM = 6%, and P0 = $25. Proceed as follows: Step 1:Calculate the required rate of return: ks = kRF + (kM – kRF)b = 5. 6% + (6%)0. 9 = 11%. Step 2:Use the constant growth rate formula to calculate g: [pic] Step 3:Calculate [pic]: [pic] = P0 (1 + g)3 = $25(1. 03)3 = $27. 3182 ( $27. 32. Alternatively, you could calculate D4 and then use the constant growth rate formula to solve for [pic]: D4 = D1(1 + g)3 = $2. 00(1. 03)3 = $2. 1855. [pic] = $2. 1855/(0. 11 – 0. 03) = $27. 3182 ( $27. 32. 8-11Vp = Dp/kp; therefore, kp = Dp/Vp. a. kp = $8/$60 = 13. 3%. b. kp = $8/$80 = 10. 0%. c. p = $8/$100 = 8. 0%. d. kp = $8/$140 = 5. 7%. 8-12[pic] 8-13a. ki = kRF + (kM – kRF)bi. kC = 9% + (13% – 9%)0. 4 = 10. 6%. kD = 9% + (13% – 9%)(-0. 5) = 7%. Note that kD is below the risk-free rate. But since this stock is like an insurance policy because it â€Å"pays off† when something bad happens (the market falls), the low return is not unreasonable. b. In this situation, the expected rate of return is as follows: [pic] = D1/P0 + g = $1. 50/$25 + 4% = 10%. However, the required rate of return is 10. 6 percent. Investors will seek to sell the stock, dropping its price to the following: pic] At this point, [p ic], and the stock will be in equilibrium. 8-14Calculate the dividend cash flows and place them on a time line. Also, calculate the stock price at the end of the supernormal growth period, and include it, along with the dividend to be paid at t = 5, as CF5. Then, enter the cash flows as shown on the time line into the cash flow register, enter the required rate of return as I = 15, and then find the value of the stock using the NPV calculation. Be sure to enter CF0 = 0, or else your answer will be incorrect. D0 = 0; D1 = 0; D2 = 0; D3 = 1. 0; D4 = 1. 00(1. 5) = 1. 5; D5 = 1. 00(1. 5)2 = 2. 25; D6 = 1. 00(1. 5)2(1. 08) = $2. 43. [pic] = ? 0 1 2 3 4 5 6 | | | | | | | 1. 00 1. 50 2. 25 2. 43 0. 658 +34. 71 = 0. 858 18. 378 36. 96 $19. 894 = [pic] [pic] = D6/([pic] – g) = $2. 43/(0. 15 – 0. 08) = $34. 71. This is the stock price at the end of Year 5.CF0 = 0; CF1-2 = 0; CF3 = 1. 0; CF4 = 1. 5; CF5 = 36. 96; I = 15%. With these cash flows in the CFLO register, press NPV to g et the value of the stock today: NPV = $19. 89. 8-15a. The preferred stock pays $8 annually in dividends. Therefore, its nominal rate of return would be: Nominal rate of return = $8/$80 = 10%. Or alternatively, you could determine the security’s periodic return and multiply by 4. Periodic rate of return = $2/$80 = 2. 5%. Nominal rate of return = 2. 5% ( 4 = 10%. b. EAR = (1 + NOM/4)4 – 1 EAR = (1 + 0. 10/4)4 – 1 EAR = 0. 103813 = 10. 3813%. -16The value of any asset is the present value of all future cash flows expected to be generated from the asset. Hence, if we can find the present value of the dividends during the period preceding long-run constant growth and subtract that total from the current stock price, the remaining value would be the present value of the cash flows to be received during the period of long-run constant growth. D1 = $2. 00 ( (1. 25)1 = $2. 50PV(D1) = $2. 50/(1. 12)1= $2. 2321 D2 = $2. 00 ( (1. 25)2 = $3. 125PV(D2) = $3. 125/(1. 12)2= $2 . 4913 D3 = $2. 00 ( (1. 25)3 = $3. 90625PV(D3) = $3. 0625/(1. 12)3= $2. 7804 ( PV(D1 to D3)= $7. 5038 Therefore, the PV of the remaining dividends is: $58. 8800 – $7. 5038 = $51. 3762. Compounding this value forward to Year 3, we find that the value of all dividends received during constant growth is $72. 18. [$51. 3762(1. 12)3 = $72. 18. ] Applying the constant growth formula, we can solve for the constant growth rate: [pic]= D3(1 + g)/(ks – g) $72. 1807= $3. 90625(1 + g)/(0. 12 – g) $8. 6616 – $72. 18g= $3. 90625 + $3. 90625g $4. 7554= $76. 08625g 0. 0625= g 6. 25%= g. 8-17First, solve for the current price. P0 = D1/(ks – g) P0 = $0. 50/(0. 2 – 0. 07) P0 = $10. 00. If the stock is in a constant growth state, the constant dividend growth rate is also the capital gains yield for the stock and the stock price growth rate. Hence, to find the price of the stock four years from today: [pic] = P0(1 + g)4 [pic] = $10. 00(1. 07)4 [pic] = $13. 1079 6 ? $13. 11. [pic] 8-18a. [pic] b. [pic] 8-19 0 1 2 3 4 | | | | | D0 = 2. 00 D1 D2 D3 D4 g = 5% [pic] a. D1 = $2(1. 05) = $2. 10; D2 = $2(1. 05)2 = $2. 21; D3 = $2(1. 5)3 = $2. 32. b. Financial Calculator Solution: Input 0, 2. 10, 2. 21, and 2. 32 into the cash flow register, input I = 12, PV = ? PV = $5. 29. c. Financial Calculator Solution: Input 0, 0, 0, and 34. 73 into the cash flow register, I = 12, PV = ? PV = $24. 72. d. $24. 72 + $5. 29 = $30. 01 = Maximum price you should pay for the stock. e. [pic] f. No. The value of the stock is not dependent upon the holding period. The value calculated in Parts a through d is the value for a 3-year holding period. It is equal to the value calculated in Part e except for a small rounding error.Any other holding period would produce the same value of [pic]; that is, [pic] = $30. 00. 8-20a. 1. [pic] 2. [pic] = $2/0. 15 = $13. 33. 3. [pic] 4. [pic] b. 1. [pic] = $2. 30/0 = Undefined. 2. [pic] = $2. 40/(-0. 05) = -$48, which is nonsense. Th ese results show that the formula does not make sense if the required rate of return is equal to or less than the expected growth rate. c. No. 8-21The answer depends on when one works the problem. We used the February 3, 2003, issue of The Wall Street Journal: a. $16. 81 to $36. 72. b. Current dividend = $0. 75. Dividend yield = $0. 75/$19. 8 ( 3. 9%. You might want to use ($0. 75)(1 + g)/$19. 48, with g estimated somehow. c. The $19. 48 close was up $0. 98 from the previous day’s close. d. The return on the stock consists of a dividend yield of about 3. 9 percent plus some capital gains yield. We would expect the total rate of return on stock to be in the 10 to 12 percent range. 8-22a. End of Year: 02 03 04 05 06 07 08 | | | | | | | D0 = 1. 75 D1 D2 D3 D4 D5 D6 Dt= D0(1 + g)t D2003= $1. 75(1. 15)1 = $2. 01. D2004= $1. 5(1. 15)2 = $1. 75(1. 3225) = $2. 31. D2005= $1. 75(1. 15)3 = $1. 75(1. 5209) = $2. 66. D2006= $1. 75(1. 15)4 = $1. 75(1. 7490) = $3. 06. D2007= $1. 75(1. 15)5 = $1. 75(2. 0114) = $3. 52. b. Step 1: PV of dividends = [pic]. PV D2003 = $2. 01/(1. 12)= $1. 79 PV D2004 = $2. 31/(1. 12)2= $1. 84 PV D2005 = $2. 66/(1. 12)3= $1. 89 PV D2006 = $3. 06/(1. 12)4= $1. 94 PV D2007 = $3. 52/(1. 12)5= $2. 00 PV of dividends= $9. 46 Step 2: [pic] This is the price of the stock 5 years from now. The PV of this price, discounted back 5 years, is as follows: PV of [pic] = $52. 80/(1. 12)5 = $29. 6. Step 3: The price of the stock today is as follows: [pic]= PV dividends Years 2003-2007 + PV of [pic] = $9. 46 + $29. 96 = $39. 42. This problem could also be solved by substituting the proper values into the following equation: [pic]. Calculator solution: Input 0, 2. 01, 2. 31, 2. 66, 3. 06, 56. 32 (3. 52 + 52. 80) into the cash flow register, input I = 12, PV = ? PV = $39. 43. c. 2003 D1/P0 = $2. 01/$39. 43= 5. 10% Capital gains yield= 6. 90* Expected total return= 12. 00% 2008 D6/P5 = $3. 70/$52. 80= 7. 00% Capital gains yield= 5. 00 Expected total return= 12 . 00% We know that ks is 12 percent, and the dividend yield is 5. 10 percent; therefore, the capital gains yield must be 6. 90 percent. The main points to note here are as follows: 1. The total yield is always 12 percent (except for rounding errors). 2. The capital gains yield starts relatively high, then declines as the supernormal growth period approaches its end. The dividend yield rises. 3. After 12/31/07, the stock will grow at a 5 percent rate. The dividend yield will equal 7 percent, the capital gains yield will equal 5 percent, and the total return will be 12 percent. d.People in high income tax brackets will be more inclined to purchase â€Å"growth† stocks to take the capital gains and thus delay the payment of taxes until a later date. The firm’s stock is â€Å"mature† at the end of 2007. e. Since the firm’s supernormal and normal growth rates are lower, the dividends and, hence, the present value of the stock price will be lower. The total ret urn from the stock will still be 12 percent, but the dividend yield will be larger and the capital gains yield will be smaller than they were with the original growth rates. This result occurs because we assume the same last dividend but a much lower current stock price. . As the required return increases, the price of the stock goes down, but both the capital gains and dividend yields increase initially. Of course, the long-term capital gains yield is still 4 percent, so the long-term dividend yield is 10 percent. 8-23a. Part 1: Graphical representation of the problem: Supernormal Normal growth growth 0 1 2 3 ( | | | | †¢Ã¢â‚¬ ¢Ã¢â‚¬ ¢ | D0 D1 (D2 + [pic]) D3 D( PVD1PVD2 [pic] P0 D1 = D0(1 + gs) = $1. 6(1. 20) = $1. 92. D2 = D0(1 + gs)2 = $1. 60(1. 20)2 = $2. 304. [pic] [pic]= PV(D1) + PV(D2) + PV([pic]) = [pic] = $1. 92/1. 10 + $2. 304/(1. 10)2 + $61. 06/(1. 10)2 = $54. 11. Financial Calculator solution: Input 0, 1. 92, 63. 364(2. 304 + 61. 06) into the cash flow register, in put I = 10, PV = ? PV = $54. 11. Part 2: Expected dividend yield: D1/P0 = $1. 92/$54. 11 = 3. 55%. Capital gains yield: First, find [pic], which equals the sum of the present values of D2 and [pic] discounted for one year. [pic] Financial Calculator solution: Input 0, 63. 364(2. 304 + 61. 6) into the cash flow register, input I = 10, PV = ? PV = $57. 60. Second, find the capital gains yield: [pic] Dividend yield = 3. 55% Capital gains yield = 6. 45 10. 00% = ks. b. Due to the longer period of supernormal growth, the value of the stock will be higher for each year. Although the total return will remain the same, ks = 10%, the distribution between dividend yield and capital gains yield will differ: The dividend yield will start off lower and the capital gains yield will start off higher for the 5-year supernormal growth condition, relative to the 2-year supernormal growth state.The dividend yield will increase and the capital gains yield will decline over the 5-year period until divid end yield = 4% and capital gains yield = 6%. c. Throughout the supernormal growth period, the total yield will be 10 percent, but the dividend yield is relatively low during the early years of the supernormal growth period and the capital gains yield is relatively high. As we near the end of the supernormal growth period, the capital gains yield declines and the dividend yield rises. After the supernormal growth period has ended, the capital gains yield will equal gn = 6%.The total yield must equal ks = 10%, so the dividend yield must equal 10% – 6% = 4%. d. Some investors need cash dividends (retired people), while others would prefer growth. Also, investors must pay taxes each year on the dividends received during the year, while taxes on capital gains can be delayed until the gain is actually realized. 8-24a. ks = kRF + (kM – kRF)b = 11% + (14% – 11%)1. 5 = 15. 5%. [pic] = D1/(ks – g) = $2. 25/(0. 155 – 0. 05) = $21. 43. b. ks = 9% + (12% â€⠀œ 9%)1. 5 = 13. 5%. [pic] = $2. 25/(0. 135 – 0. 05) = $26. 47. c. ks = 9% + (11% – 9%)1. 5 = 12. 0%. [pic] = $2. 25/(0. 12 – 0. 5) = $32. 14. d. New data given: kRF = 9%; kM = 11%; g = 6%, b = 1. 3. ks = kRF + (kM – kRF)b = 9% + (11% – 9%)1. 3 = 11. 6%. [pic] = D1/(ks – g) = $2. 27/(0. 116 – 0. 06) = $40. 54. 8-25a. Old ks = kRF + (kM – kRF)b = 9% + (3%)1. 2 = 12. 6%. New ks = 9% + (3%)0. 9 = 11. 7%. Old price: [pic] New price: [pic] Since the new price is lower than the old price, the expansion in consumer products should be rejected. The decrease in risk is not sufficient to offset the decline in profitability and the reduced growth rate. b. POld = $38. 21. PNew = [pic]. Solving for ks we have the following: $38. 1= [pic] $2. 10= $38. 21(ks) – $1. 9105 $4. 0105= $38. 21(ks) ks= 0. 10496. Solving for b: 10. 496% = 9% + 3%(b) 1. 496% = 3%(b) b = 0. 49865. Check: ks = 9% + (3%)0. 49865 = 10. 496%. [pic] = [pic] = $38. 21 . Therefore, only if management’s analysis concludes that risk can be lowered to b = 0. 49865, or approximately 0. 5, should the new policy be put into effect. SPREADSHEET PROBLEM 8-26The detailed solution for the spreadsheet problem is available both on the instructor’s resource CD-ROM and on the instructor’s side of South-Western’s web site, http://brigham. swlearning. com. INTEGRATED CASEMutual of Chicago Insurance Company Stock Valuation 8-27ROBERT BALIK AND CAROL KIEFER ARE SENIOR VICE-PRESIDENTS OF THE MUTUAL OF CHICAGO INSURANCE COMPANY. THEY ARE CO-DIRECTORS OF THE COMPANY’S PENSION FUND MANAGEMENT DIVISION, WITH BALIK HAVING RESPONSIBILITY FOR FIXED INCOME SECURITIES (PRIMARILY BONDS) AND KIEFER BEING RESPONSIBLE FOR EQUITY INVESTMENTS. A MAJOR NEW CLIENT, THE CALIFORNIA LEAGUE OF CITIES, HAS REQUESTED THAT MUTUAL OF CHICAGO PRESENT AN INVESTMENT SEMINAR TO THE MAYORS OF THE REPRESENTED CITIES, AND BALIK AND KIEFER, WHO WILL MAKE THE ACTUA L PRESENTATION, HAVE ASKED YOU TO HELP THEM.TO ILLUSTRATE THE COMMON STOCK VALUATION PROCESS, BALIK AND KIEFER HAVE ASKED YOU TO ANALYZE THE BON TEMPS COMPANY, AN EMPLOYMENT AGENCY THAT SUPPLIES WORD PROCESSOR OPERATORS AND COMPUTER PROGRAMMERS TO BUSINESSES WITH TEMPORARILY HEAVY WORKLOADS. YOU ARE TO ANSWER THE FOLLOWING QUESTIONS. A. DESCRIBE BRIEFLY THE LEGAL RIGHTS AND PRIVILEGES OF COMMON STOCKHOLDERS. ANSWER:[SHOW S8-1 THROUGH S8-5 HERE. ] THE COMMON STOCKHOLDERS ARE THE OWNERS OF A CORPORATION, AND AS SUCH THEY HAVE CERTAIN RIGHTS AND PRIVILEGES AS DESCRIBED BELOW. 1. OWNERSHIP IMPLIES CONTROL.THUS, A FIRM’S COMMON STOCKHOLDERS HAVE THE RIGHT TO ELECT ITS FIRM’S DIRECTORS, WHO IN TURN ELECT THE OFFICERS WHO MANAGE THE BUSINESS. 2. COMMON STOCKHOLDERS OFTEN HAVE THE RIGHT, CALLED THE PREEMPTIVE RIGHT, TO PURCHASE ANY ADDITIONAL SHARES SOLD BY THE FIRM. IN SOME STATES, THE PREEMPTIVE RIGHT IS AUTOMATICALLY INCLUDED IN EVERY CORPORATE CHARTER; IN OTHERS, IT IS NEC ESSARY TO INSERT IT SPECIFICALLY INTO THE CHARTER. B. 1. WRITE OUT A FORMULA THAT CAN BE USED TO VALUE ANY STOCK, REGARDLESS OF ITS DIVIDEND PATTERN. ANSWER:[SHOW S8-6 HERE. ] THE VALUE OF ANY STOCK IS THE PRESENT VALUE OF ITS EXPECTED DIVIDEND STREAM: [pic] = [pic]HOWEVER, SOME STOCKS HAVE DIVIDEND GROWTH PATTERNS THAT ALLOW THEM TO BE VALUED USING SHORT-CUT FORMULAS. B. 2. WHAT IS A CONSTANT GROWTH STOCK? HOW ARE CONSTANT GROWTH STOCKS VALUED? ANSWER:[SHOW S8-7 AND S8-8 HERE. ] A CONSTANT GROWTH STOCK IS ONE WHOSE DIVIDENDS ARE EXPECTED TO GROW AT A CONSTANT RATE FOREVER. â€Å"CONSTANT GROWTH† MEANS THAT THE BEST ESTIMATE OF THE FUTURE GROWTH RATE IS SOME CONSTANT NUMBER, NOT THAT WE REALLY EXPECT GROWTH TO BE THE SAME EACH AND EVERY YEAR. MANY COMPANIES HAVE DIVIDENDS THAT ARE EXPECTED TO GROW STEADILY INTO THE FORESEEABLE FUTURE, AND SUCH COMPANIES ARE VALUED AS CONSTANT GROWTH STOCKS.FOR A CONSTANT GROWTH STOCK: D1 = D0(1 + g), D2 = D1(1 + g) = D0(1 + g)2, AND SO ON. WI TH THIS REGULAR DIVIDEND PATTERN, THE GENERAL STOCK VALUATION MODEL CAN BE SIMPLIFIED TO THE FOLLOWING VERY IMPORTANT EQUATION: [pic] = [pic] = [pic]. THIS IS THE WELL-KNOWN â€Å"GORDON,† OR â€Å"CONSTANT-GROWTH† MODEL FOR VALUING STOCKS. HERE D1 IS THE NEXT EXPECTED DIVIDEND, WHICH IS ASSUMED TO BE PAID 1 YEAR FROM NOW, kS IS THE REQUIRED RATE OF RETURN ON THE STOCK, AND g IS THE CONSTANT GROWTH RATE. B. 3. WHAT HAPPENS IF A COMPANY HAS A CONSTANT g THAT EXCEEDS ITS ks? WILL MANY STOCKS HAVE EXPECTED g > ks IN THE SHORT RUN (THAT IS, FOR THE NEXT FEW YEARS)?IN THE LONG RUN (THAT IS, FOREVER)? ANSWER:[SHOW S8-9 HERE. ] THE MODEL IS DERIVED MATHEMATICALLY, AND THE DERIVATION REQUIRES THAT ks > g. IF g IS GREATER THAN ks, THE MODEL GIVES A NEGATIVE STOCK PRICE, WHICH IS NONSENSICAL. THE MODEL SIMPLY CANNOT BE USED UNLESS (1) ks > g, (2) g IS EXPECTED TO BE CONSTANT, AND (3) g CAN REASONABLY BE EXPECTED TO CONTINUE INDEFINITELY. STOCKS MAY HAVE PERIODS OF SUPERNORMAL GR OWTH, WHERE gS > ks; HOWEVER, THIS GROWTH RATE CANNOT BE SUSTAINED INDEFINITELY. IN THE LONG-RUN, g < ks. C. ASSUME THAT BON TEMPS HAS A BETA COEFFICIENT OF 1. , THAT THE RISK-FREE RATE (THE YIELD ON T-BONDS) IS 7 PERCENT, AND THAT THE REQUIRED RATE OF RETURN ON THE MARKET IS 12 PERCENT. WHAT IS THE REQUIRED RATE OF RETURN ON THE FIRM’S STOCK? ANSWER:[SHOW S8-10 HERE. ] HERE WE USE THE SML TO CALCULATE BON TEMPS’ REQUIRED RATE OF RETURN: ks= kRF + (kM – kRF)bBon Temps = 7% + (12% – 7%)(1. 2) = 7% + (5%)(1. 2) = 7% + 6% = 13%. D. ASSUME THAT BON TEMPS IS A CONSTANT GROWTH COMPANY WHOSE LAST DIVIDEND (D0, WHICH WAS PAID YESTERDAY) WAS $2. 00 AND WHOSE DIVIDEND IS EXPECTED TO GROW INDEFINITELY AT A 6 PERCENT RATE. 1.WHAT IS THE FIRM’S EXPECTED DIVIDEND STREAM OVER THE NEXT 3 YEARS? ANSWER:[SHOW S8-11 HERE. ] BON TEMPS IS A CONSTANT GROWTH STOCK, AND ITS DIVIDEND IS EXPECTED TO GROW AT A CONSTANT RATE OF 6 PERCENT PER YEAR. EXPRESSED AS A TIME LINE, WE HAVE THE FOLLOWING SETUP. JUST ENTER 2 IN YOUR CALCULATOR; THEN KEEP MULTIPLYING BY 1 + g = 1. 06 TO GET D1, D2, AND D3: 0 1 2 3 | | | | D0 = 2. 00 2. 12 2. 247 2. 382 1. 88 1. 76 1. 65 . . . D. 2. WHAT IS THE FIRM’S CURRENT STOCK PRICE? ANSWER:[SHOW S8-12 HERE. WE COULD EXTEND THE TIME LINE ON OUT FOREVER, FIND THE VALUE OF BON TEMPS’ DIVIDENDS FOR EVERY YEAR ON OUT INTO THE FUTURE, AND THEN THE PV OF EACH DIVIDEND DISCOUNTED AT k = 13%. FOR EXAMPLE, THE PV OF D1 IS $1. 8761; THE PV OF D2 IS $1. 7599; AND SO FORTH. NOTE THAT THE DIVIDEND PAYMENTS INCREASE WITH TIME, BUT AS LONG AS ks > g, THE PRESENT VALUES DECREASE WITH TIME. IF WE EXTENDED THE GRAPH ON OUT FOREVER AND THEN SUMMED THE PVs OF THE DIVIDENDS, WE WOULD HAVE THE VALUE OF THE STOCK. HOWEVER, SINCE THE STOCK IS GROWING AT A CONSTANT RATE, ITS VALUE CAN BE ESTIMATED USING THE CONSTANT GROWTH MODEL: pic] = [pic] = [pic] = [pic] = $30. 29. D. 3. WHAT IS THE STOCK’S EXPECTED VALUE ONE YEAR FROM NOW? ANS WER:[SHOW S8-13 HERE. ] AFTER ONE YEAR, D1 WILL HAVE BEEN PAID, SO THE EXPECTED DIVIDEND STREAM WILL THEN BE D2, D3, D4, AND SO ON. THUS, THE EXPECTED VALUE ONE YEAR FROM NOW IS $32. 10: [pic] = [pic] = [pic] = [pic] = $32. 10. D. 4. WHAT ARE THE EXPECTED DIVIDEND YIELD, THE CAPITAL GAINS YIELD, AND THE TOTAL RETURN DURING THE FIRST YEAR? ANSWER:[SHOW S8-14 HERE. ] THE EXPECTED DIVIDEND YIELD IN ANY YEAR n IS DIVIDEND YIELD = [pic], WHILE THE EXPECTED CAPITAL GAINS YIELD ISCAPITAL GAINS YIELD = [pic] = k – [pic]. THUS, THE DIVIDEND YIELD IN THE FIRST YEAR IS 7 PERCENT, WHILE THE CAPITAL GAINS YIELD IS 6 PERCENT: TOTAL RETURN = 13. 0% DIVIDEND YIELD = $2. 12/$30. 29 = 7. 0% CAPITAL GAINS YIELD = 6. 0% E. NOW ASSUME THAT THE STOCK IS CURRENTLY SELLING AT $30. 29. WHAT IS THE EXPECTED RATE OF RETURN ON THE STOCK? ANSWER:THE CONSTANT GROWTH MODEL CAN BE REARRANGED TO THIS FORM: [pic] = [pic]. HERE THE CURRENT PRICE OF THE STOCK IS KNOWN, AND WE SOLVE FOR THE EXPECTED RETURN. FOR BON TEMPS: pic] = $2. 12/$30. 29 + 0. 060 = 0. 070 + 0. 060 = 13%. F. WHAT WOULD THE STOCK PRICE BE IF ITS DIVIDENDS WERE EXPECTED TO HAVE ZERO GROWTH? ANSWER:[SHOW S8-15 HERE. ] IF BON TEMPS’ DIVIDENDS WERE NOT EXPECTED TO GROW AT ALL, THEN ITS DIVIDEND STREAM WOULD BE A PERPETUITY. PERPETUITIES ARE VALUED AS SHOWN BELOW: 0 1 2 3 | | | | 2. 00 2. 00 2. 00 1. 77 1. 57 1. 39 . . . P0 = 15. 38 P0 = D/kS = $2. 00/0. 13 = $15. 38. NOTE THAT IF A PREFERRED STOCK IS A PERPETUITY, IT MAY BE VALUED WITH THIS FORMULA. G.NOW ASSUME THAT BON TEMPS IS EXPECTED TO EXPERIENCE SUPERNORMAL GROWTH OF 30 PERCENT FOR THE NEXT 3 YEARS, THEN TO RETURN TO ITS LONG-RUN CONSTANT GROWTH RATE OF 6 PERCENT. WHAT IS THE STOCK’S VALUE UNDER THESE CONDITIONS? WHAT IS ITS EXPECTED DIVIDEND YIELD AND CAPITAL GAINS YIELD IN YEAR 1? YEAR 4? ANSWER:[SHOW S8-16 THROUGH S8-18 HERE. ] BON TEMPS IS NO LONGER A CONSTANT GROWTH STOCK, SO THE CONSTANT GROWTH MODEL IS NOT APPLICABLE. NOTE, HOWEVER, THAT THE STO CK IS EXPECTED TO BECOME A CONSTANT GROWTH STOCK IN 3 YEARS. THUS, IT HAS A NONCONSTANT GROWTH PERIOD FOLLOWED BY CONSTANT GROWTH.THE EASIEST WAY TO VALUE SUCH NONCONSTANT GROWTH STOCKS IS TO SET THE SITUATION UP ON A TIME LINE AS SHOWN BELOW: 0 1 2 3 4 | | | | | 2. 600 3. 380 4. 394 4. 65764 2. 301 2. 647 3. 045 46. 114 54. 107 SIMPLY ENTER $2 AND MULTIPLY BY (1. 30) TO GET D1 = $2. 60; MULTIPLY THAT RESULT BY 1. 3 TO GET D2 = $3. 38, AND SO FORTH. THEN RECOGNIZE THAT AFTER YEAR 3, BON TEMPS BECOMES A CONSTANT GROWTH STOCK, AND AT THAT POINT [pic] CAN BE FOUND USING THE CONSTANT GROWTH MODEL. pic] IS THE PRESENT VALUE AS OF t = 3 OF THE DIVIDENDS IN YEAR 4 AND BEYOND AND IS ALSO CALLED THE TERMINAL VALUE. WITH THE CASH FLOWS FOR D1, D2, D3, AND [pic] SHOWN ON THE TIME LINE, WE DISCOUNT EACH VALUE BACK TO YEAR 0, AND THE SUM OF THESE FOUR PVs IS THE VALUE OF THE STOCK TODAY, P0 = $54. 107. THE DIVIDEND YIELD IN YEAR 1 IS 4. 80 PERCENT, AND THE CAPITAL GAINS YIELD IS 8. 2 PERCENT: DI VIDEND YIELD = [pic] = 0. 0480 = 4. 8%. CAPITAL GAINS YIELD = 13. 00% – 4. 8% = 8. 2%. DURING THE NONCONSTANT GROWTH PERIOD, THE DIVIDEND YIELDS AND CAPITAL GAINS YIELDS ARE NOT CONSTANT, AND THE CAPITAL GAINS YIELD DOES NOT EQUAL g.HOWEVER, AFTER YEAR 3, THE STOCK BECOMES A CONSTANT GROWTH STOCK, WITH g = CAPITAL GAINS YIELD = 6. 0% AND DIVIDEND YIELD = 13. 0% – 6. 0% = 7. 0%. H. SUPPOSE BON TEMPS IS EXPECTED TO EXPERIENCE ZERO GROWTH DURING THE FIRST 3 YEARS AND THEN TO RESUME ITS STEADY-STATE GROWTH OF 6 PERCENT IN THE FOURTH YEAR. WHAT IS THE STOCK’S VALUE NOW? WHAT IS ITS EXPECTED DIVIDEND YIELD AND ITS CAPITAL GAINS YIELD IN YEAR 1? YEAR 4? ANSWER:[SHOW S8-19 AND S8-20 HERE. ] NOW WE HAVE THIS SITUATION: 0 1 2 3 4 | | | | | 2. 00 2. 0 2. 00 2. 00 2. 12 1. 77 1. 57 1. 39 20. 99 25. 72 = [pic] DURING YEAR 1: DIVIDEND YIELD = [pic] = 0. 0778 = 7. 78%. CAPITAL GAINS YIELD = 13. 00% – 7. 78% = 5. 22%. AGAIN, IN YEAR 4 BON TEMPS BECOMES A CONSTANT GROWTH STOCK; HENCE g = CAPITAL GAINS YIELD = 6. 0% AND DIVIDEND YIELD = 7. 0%. I. FINALLY, ASSUME THAT BON TEMPS’ EARNINGS AND DIVIDENDS ARE EXPECTED TO DECLINE BY A CONSTANT 6 PERCENT PER YEAR, THAT IS, g = -6%. WHY WOULD ANYONE BE WILLING TO BUY SUCH A STOCK, AND AT WHAT PRICE SHOULD IT SELL? WHAT WOULD BE THE DIVIDEND YIELD AND CAPITAL GAINS YIELD IN EACH YEAR?ANSWER:[SHOW S8-21 AND S8-22 HERE. ] THE COMPANY IS EARNING SOMETHING AND PAYING SOME DIVIDENDS, SO IT CLEARLY HAS A VALUE GREATER THAN ZERO. THAT VALUE CAN BE FOUND WITH THE CONSTANT GROWTH FORMULA, BUT WHERE g IS NEGATIVE: [pic] = [pic] = [pic] = [pic] = [pic] = $9. 89. SINCE IT IS A CONSTANT GROWTH STOCK: g = CAPITAL GAINS YIELD = -6. 0%, HENCE: DIVIDEND YIELD = 13. 0% – (-6. 0%) = 19. 0%. AS A CHECK: DIVIDEND YIELD = [pic] = 0. 190 = 19. 0%. THE DIVIDEND AND CAPITAL GAINS YIELDS ARE CONSTANT OVER TIME, BUT A HIGH (19. 0 PERCENT) DIVIDEND YIELD IS NEEDED TO OFFSET THE NEGATIVE CAPITAL GAINS YIELD.J. BON TEMPS EMB ARKS ON AN AGGRESSIVE EXPANSION THAT REQUIRES ADDITIONAL CAPITAL. MANAGEMENT DECIDES TO FINANCE THE EXPANSION BY BORROWING $40 MILLION AND BY HALTING DIVIDEND PAYMENTS TO INCREASE RETAINED EARNINGS. THE PROJECTED FREE CASH FLOWS FOR THE NEXT THREE YEARS ARE -$5 MILLION, $10 MILLION, AND $20 MILLION. AFTER THE THIRD YEAR, FREE CASH FLOW IS PROJECTED TO GROW AT A CONSTANT 6 PERCENT. THE OVERALL COST OF CAPITAL IS 10 PERCENT. WHAT IS BON TEMPS’ TOTAL VALUE? IF IT HAS 10 MILLION SHARES OF STOCK AND $40 MILLION TOTAL DEBT, WHAT IS THE PRICE PER SHARE? ANSWER:[SHOW S8-23 THROUGH S8-28 HERE. 0 1 2 3 4 | | | | | -5 10 20 21. 20 $ -4. 545 8. 264 15. 026 398. 197 $416. 942 = TOTAL VALUE VALUE OF EQUITY = TOTAL VALUE – DEBT = $416. 94 – $40 = $376. 94 MILLION. PRICE PER SHARE = $376. 94/10 = $37. 69. K. WHAT DOES MARKET EQUILIBRIUM MEAN? ANSWER:[SHOW S8-29 AND S8-30 HERE. ] EQUILIBRIUM MEANS STABLE, NO TENDENCY TO CHANGE. MARKET EQUILIBRIUM MEANS THAT PRICES ARE STABLEâ₠¬â€œAT ITS CURRENT PRICE, THERE IS NO GENERAL TENDENCY FOR PEOPLE TO WANT TO BUY OR TO SELL A SECURITY THAT IS IN EQUILIBRIUM.ALSO, WHEN EQUILIBRIUM EXISTS, THE EXPECTED RATE OF RETURN WILL BE EQUAL TO THE REQUIRED RATE OF RETURN: [pic] = D1/P0 + g = k = kRF + (kM – kRF)b. L. IF EQUILIBRIUM DOES NOT EXIST, HOW WILL IT BE ESTABLISHED? ANSWER:[SHOW S8-31 AND S8-32 HERE. ] SECURITIES WILL BE BOUGHT AND SOLD UNTIL THE EQUILIBRIUM PRICE IS ESTABLISHED. M. WHAT IS THE EFFICIENT MARKETS HYPOTHESIS, WHAT ARE ITS THREE FORMS, AND WHAT ARE ITS IMPLICATIONS? ANSWER:[SHOW S8-33 THROUGH S8-37 HERE. ] THE EMH IN GENERAL IS THE HYPOTHESIS THAT SECURITIES ARE NORMALLY IN EQUILIBRIUM AND ARE â€Å"PRICED FAIRLY,† MAKING IT IMPOSSIBLE TO â€Å"BEAT THE MARKET. WEAK-FORM EFFICIENCY SAYS THAT INVESTORS CANNOT PROFIT FROM LOOKING AT PAST MOVEMENTS IN STOCK PRICES–THE FACT THAT STOCKS WENT DOWN FOR THE LAST FEW DAYS IS NO REASON TO THINK THAT THEY WILL GO UP (OR DOWN) IN THE FUTURE. THIS FORM HAS BEEN PROVEN PRETTY WELL BY EMPIRICAL TESTS, EVEN THOUGH PEOPLE STILL EMPLOY â€Å"TECHNICAL ANALYSIS. † SEMISTRONG-FORM EFFICIENCY SAYS THAT ALL PUBLICLY AVAILABLE INFORMATION IS REFLECTED IN STOCK PRICES, HENCE THAT IT WON’T DO MUCH GOOD TO PORE OVER ANNUAL REPORTS TRYING TO FIND UNDERVALUED STOCKS.THIS ONE IS (WE THINK) LARGELY TRUE, BUT SUPERIOR ANALYSTS CAN STILL OBTAIN AND PROCESS NEW INFORMATION FAST ENOUGH TO GAIN A SMALL ADVANTAGE. STRONG-FORM EFFICIENCY SAYS THAT ALL INFORMATION, EVEN INSIDE INFORMATION, IS EMBEDDED IN STOCK PRICES. THIS FORM DOES NOT HOLD–INSIDERS KNOW MORE, AND COULD TAKE ADVANTAGE OF THAT INFORMATION TO MAKE ABNORMAL PROFITS IN THE MARKETS. TRADING ON THE BASIS OF INSIDER INFORMATION IS ILLEGAL. N. PHYFE COMPANY RECENTLY ISSUED PREFERRED STOCK. IT PAYS AN ANNUAL DIVIDEND OF $5, AND THE ISSUE PRICE WAS $50 PER SHARE. WHAT IS THE EXPECTED RETURN TO AN INVESTOR ON THIS PREFERRED STOCK?ANSWER:[SHOW S8-38 AND S8-39 HERE. ] [pic]= [pic] = [pic] = 10%. ———————– ks = 15% gn = 6% ( 1/(1. 15)3 ( 1/(1. 13)3 ( 1/(1. 13)2 ( 1/1. 13 gs = 50% gn = 8% [pic] ks = 12% gs = 15% gn = 5% WACC = 10% [pic] = 30. 29 = [pic] g = 0% g = 0% g = 0% gn = 6% ks = 13% [pic] = $66. 54 = [pic] gs = 30% gs = 30% gs = 30% gn = 6% ks = 13% g = 0% ks = 13% g = 6% ks = 13% ks = 10% gs = 20% gs = 20% gn = 5% WACC = 12% WACC = 12% gn = 7% [pic] WACC = 13% gn = 7% 530 = [pic] ( 1/(1. 15)4 ( 1/(1. 15)5 ks = 12% ( 1/1. 13 ( 1/(1. 13)2 ( 1/(1. 13)3 ( 1/(1. 13)2 ( 1/(1. 13)2 ( 1/1. 13 ( 1/(1. 13)2 ( 1/(1. 13)3 ( 1/(1. 13)3 ( 1/1. 13 ( 1/1. 13 (%89

Analysis on the Conclusion of Tennessee Williams’s Book, A Streetcar Named Desire vs the Film Adaptation

Analysis on the Conclusion of Tennessee Williams’s Book, A Streetcar Named Desire vs the Film Adaptation The endings of A Street Car Named Desire in the movie and in the play by Tennessee Williams are very different. Initially, they both follow the same storyline, which follows Stella’s struggles between choosing Blanche or Stanley. Near the end, Kazan changes the turning point from what Tennessee Williams wrote. The impact of the different endings dramatically changes the reactions from the audience. In the play, Eunice is telling Stella that she cannot believe what Stanley did because her life needs to go on. Stella takes the baby, and she goes back to Stanley, and when the baby stopped crying it is as if life is back to normal. When Blanche is gone they treat their lives no differently than when she was there. In this case, Stanley wins the â€Å"poker game,† because he has a better hand than Blanche. Stella cries frantically and it shows how badly she feels about admitting Blanche into an insane asylum. The end of the play says â€Å"7 card stud.† This tells the audience that the play has gone back to normal. This ending is very different from the movie because Stella makes a different decision than she does in the book. In the movie, Stella does not go back to her normal life. The book has Eunice giving Stella the baby, but in the movie Eunice does not give Stella the baby and as Blanche is being forced to leave Stella thinks about what Stanley has done. It makes her too sick to even think of Stanley, and she says â€Å"Don’t you touch me, don’t ever touch me again.† She relays the amount of hatred she has toward Stanley and it impacts the decision she makes in the end. When Mitch watches Stella being taken away he yells at Stanley and says, â€Å"what have you done to her?† and this skepticism was not shown during the play. The movie does not have life going back to normal and although Blanche did not win the poker game, Stanley did lose. Stella goes back inside to Eunice as Stanley continues to call for her. This change is very difficult to comprehend because the result of the play and the movie are opposite. This ending shows the change between who has won the pot: Sta nley, Blanche or No One. As a result of the alternate endings the audience becomes very confused as to why they are so different. If a change had been made earlier in the movie it would not be as drastic as making a change to the ending. This alters the meanings that can be interpreted by the play and movie. The question that many still wonder is why are the endings different if the movie was produced only a couple years after the book? The alternate endings have a negative impact on how people interpret the endings.

Write (5pages) of Data Warehouse, OLAP and Data Mining for Business Essay

Write (5pages) of Data Warehouse, OLAP and Data Mining for Business Applications - Essay Example This eradicates the need of specialists installing them after purchasing the database (Ling and Tamer, 2009). The research will establish the different areas of running businesses that this technology can be applied. Some of the areas to be checked are budgeting, sales forecasting and determining whether to produce a new product or not. The main objective will be establishing the benefits accrued by multinational businesses when they carry out data mining in their data warehouse. This information will be used in determining if these benefits can be passed to small scale businesses without the capability of purchasing this technology (O’Brien & Marakas, 2009). The research will establish the cost benefit that businesses receive by using this technology. Cost benefit will establish the opportunity cost of using this technology instead of manual data analysis using the stand alone software. The data warehouse is a collection of data which helps management in decision making. The warehouse has a capability of providing enormous amount of information at the same time. This makes it a better tool for use by businesses that are storing amount of information about their production operation process. The data warehouse ability of integration with modern analysis tools like OLAP is an advantage to corporate. This helps in timely and correct analysis of data, which can be used in decision making by managers (Agosta, 2004). These are software tools that enable data analyst analyze data and view it from multiple perspective. The multiple perspective help managers analyze different options of a problem before arriving at a conclusion. OLAP support activities like analyzing the financial trends in businesses. This would bring to the attention a manager a production line that cost of production is rising without any additional benefits accruing from it. OLAP tools are easy to use and do not require massive investment

Answer 11 questionsthis is not an essay Assignment

Answer 11 questionsthis is not an essay - Assignment Example The dance was introduced in 1953 by a Cuban violinist called Enrique Jorrà ­n. This dance has split fourth beat. A person begins the dance by starting with the second beat. Enrique also introduced this dance style in London, and it is currently referred to as the ballroom cha-cha (Andrews 7). 3. The rumba music started in Cuba as an integration of many musical practices. Rumba in Cuba is played through both the triple-pulse and the double-pulse structures (Andrews 3). Rumba is rhythmically played using the five-stroke system referred to as clave. The current types of rumba are; Columbia, yambu and guaguanco. The three rumba types are unique, due to different choreography. 4. Samba refers to a Brazilian dance. The dance style originated in Brazil; however, it has African roots which were influenced through slave trade. The Bahian Samba dance is currently a UNESCO Heritage is Humanity (Andrews 10), and it is mostly played in Rio de Janeiro. The samba is traditionally played by various percussion and guitar types. On 2nd December ever year in Brazil, celebration of the Samba National day is held. 5. Carlos Santana is a Mexican American musician, who was very famous in the 1960s and 1970s. His Santana band initiated the integration of Latin American music with rock music. He has won numerous music awards; for example 10 Grammy awards (Andrews 15). The guitar lines of Carlos were usually based on the African and Latin rhythms. His popularity in the world music industry was again felt towards the end of the 1990s. 7. The Andean music ensemble is currently a music type with global audience because; native sounds of the music has been continuously mixed with music form applicable to modern and middle class Europeans. 8. Peruvian wayno is a popular type of Andean music common in Peru, Chile and Argentina. It is performed by various ethic groups, for example the Quechua and the Aymara societies. Its superior character

Interview with entrepreneur Essay Example | Topics and Well Written Essays - 1250 words

Interview with entrepreneur - Essay Example The reason why these individuals will propose to be their own bosses is because of the various merits that are associated with entrepreneurship. Some of the benefits are becoming their own bosses as well as the ability to enjoy freedom on the areas of businesses (Erik, 2011). The creativity and innovative nature of an individual molds the entrepreneurship skills in them. Since the 1700s many creative and innovative young professionals have become entrepreneurs and the driving force behind their entry into entrepreneurship world are the various benefits that are associated with entrepreneurship (Erik, 2011). Good practice of entrepreneurship requires application of qualities like dedication, flexibility, determination, and creativity. CHAPTER ONE Introduction The process of entrepreneurship starts with introduction of new things in areas where those introduced things are missing. Once the new things have been discovered these things are combined with the already existing resources (Er ik, 2011). The process of combination of these things with the already existing resources entails creativity. ... The generation of their energy takes place internally because of their focused minds and the urge to achieve success in all that they do. Possession of naivety and smartness at the same time These people tend to have high level of intelligence as well naivety in venturing into new areas (Brown, 1989). The naivety originates from divergent thinking since this thinking is associated with separation of good ideas from bad ones. Ability to combine both discipline and playfulness Creative people are always capable of combining both irresponsibility and responsibility quality and they are able to work late at night unlike uncreative individuals (Brown, 1989). Ability to navigate between imagination and fantasy Creative people always have a sense of reality and this reality emerges from imagination that these people obtain from art and science. Possessions of introversion and extraversion These possessions are able to differentiate the personality traits in individuals and measurement of th ese differences is possible. Studies have shown that these qualities can be both found in creative people. Stephen Murtagh seems to have much of the above qualities and this is because through his efforts AW Bell Machinery manufacturing firm was able to emerge as a medium company for the year (Casey, 2013). The company was not able to export its products in previous years and through his effort they were able to reverse this culture and the company could now export most of its products as well as to come up with innovative and creative products. CHAPTER TWO-Literature review According to Teresa Amabile (1988), some of the factors that enhance individual creativity are self motivation, cognitive

Business Planning - franchise KFC Essay Example | Topics and Well Written Essays - 2000 words

Business Planning - franchise KFC - Essay Example KFC will introduce a range of edible coffee cups and food items like double down dog in London and hopes to launch them in the newly set franchise. Their coffee cups will be infused with various aromas such as coconut sun cream, fresh grass and wild flowers. They plan to introduce buckets of comfort food along with new ketchup made of marshmallows and lemonade. These newly introduced products are supposed to satisfy the demand of the local residents and result in increased sales (Lafontaine and Shaw, 2005). Their new product ranges are supposed to come with many health benefits for people. Their innovative range of products will fall under 400 calories and below 15 grams of fat so that even if people continue eating their foodstuffs at a regular basis that will serve to be a healthy choice for them. These food ranges will contain no trans fats and will contain adequate amount of calories required to remain healthy (Stier, 2004). Their combo meals will come under healthy diet plans and will serve best in taking care of health of their consumers. These newly invented unique recipes will not compromise the quality and will be made of sustainable materials. To gain a competitive advantage, the company will focus on expanding their business and increase its market share. Use of renewable resources will also differentiate the business to some extent. Majority of competitors tend to use plastic materials for their packaging. KFC will use edible coffee cups which will generate less waste and will confirm to be environment healthy (Tsai, Shih and Chen, 2007). It will develop new food products with great taste and value and also at the same time maintain health standards which will satisfy the expectations of the health concerned people too (Sivadas and Baker-Prewitt, 2000). The price of the new products will be reasonable and competitive with other neighbouring restaurants offering chicken menu. Also by offering unique introductory discounts, the new franchise will

Scientific Research and Writing Assignment Example | Topics and Well Written Essays - 500 words

Scientific Research and Writing - Assignment Example As a result, its consumption faced the major set back in its making history. Many physicians, as well as nutritionists, warned their patients against consuming large amounts of chocolate. Recent discoveries on biologically active phenol compounds such as cocoa that are currently used in making chocolate has widely changed the perception of the society about the same. In relation to this recent breakthrough extensive and intensive research has been stimulated into looking at the effects of chocolate consumption on ageing, oxidative stress, blood pressure regulation, and in controlling atherosclerosis (Matsui, Ito, Nishimura al, 2005). This research investigates the association between chocolate consumption and the occurrence of acne among college girls from Oklahoma State University. This research seeks to establish the contributions of chocolate in the occurrence of acne among college girls from Oklahoma State University. The research also seeks to validate the hypothesis that chocolate consumption is the major cause of acne among college girls from Oklahoma State University. The null hypothesis guiding this research is that chocolate consumption is not linked to the occurrence of Acne among college girls from Oklahoma State University. 50 female students were used in this experiment. The population was picked at random and divided into five groups (again at random). Four groups will be subjected to consuming milked chocolate at the rates of 10g, 20g, 30g, and 40g respectively. The fifth group will the control group and will be subjected to 0g of chocolate consumed per day. The experiment will be done mainly during the afternoon hours when most of the students are through with their classes and are relatively willing to consume the food. The relationship between chocolate consumption and the occurrence of acne will be determined by

Marketing Plan for Breads and Bakes Essay Example | Topics and Well Written Essays - 1000 words

Marketing Plan for Breads and Bakes - Essay Example The experience and the knowledge of B&B owners, product variety, and skilled workers are the strengths of the enterprise. The weakness of the firm arises from its dearth of knowledge regarding the taste and preference of the local clientele. The firm has a prospect of benefiting from the mild competitive rivalry and the large consumer base in the locality. The competition arising from the well-established and prominent cafes are a major threat.The retail industry for food and beverages in the US is swelling rapidly. The increased demand for the freshly baked products, including muffins, bread, and beverages such as coffee arises from the cool business climate of Seattle. The low competition in the locality also increases the demand for products (U.S Department of Commerce, 2008). Large coffee chains and espresso bars are the main rivals of B&B. Nonetheless, the cafes often have limited clients because of the higher outlays with which they are associated. B&B is economical in its comp etitive price, acquiring more clients (Langlois & Csontos, 1993).The firm’s products are a variety of coffee, espresso, and freshly baked products. The firm will market the products to the locals, tourists, and travelers in the town.The local residents aged between 15 and 50 years are the target market of the firm. The firm also targets the tourists and the frequent travelers in the town.B&B will be different from other firms in terms of a wide variety of provisions and competitive pricing.

National Economy over the Next Decade Essay Example for Free

National Economy over the Next Decade Essay Beyond 2007, the pace of economic growth will probably slow somewhat. The main reason is that the labor force is projected to grow less quickly as members of the baby-boom generation begin to retire and as the scheduled expiration of various tax provisions in 2011 discourages work by raising marginal tax rates. Real GDP is projected to grow at an average annual rate of 3. 1 percent between 2008 and 2011 and at 2. 6 percent between 2012 and 2016. The rate of inflation is assumed to average 2. 2 percent after 2007; and the unemployment rate, 5. 2 percent. Interest rates on three-month and 10-year Treasury securities are projected to average 4. 4 percent and 5. 2 percent, respectively (Marron 6). Over the longer term, the aging of the U. S. population combined with rapidly rising health care costs will put significant strains on the federal budget, which begin to be evident within the projection period. When the first members of the baby-boom generation reach age 62 in 2008, they will become eligible for Social Security benefits. As a result, the annual rate of growth of Social Security spending is expected to increase from about 4. 8 percent in 2008 to 6. 5 percent in 2016. In addition, because the cost of health care is likely to continue rising rapidly, the annual rate of growth of Medicare spending is projected to increase from 7. 4 percent in 2008 to about 8. 9 percent in 2016. (Medicare spending is anticipated to rise by 17 percent this year and 14 percent in 2007 as the new prescription drug program gets under way. ) Rapid growth is also projected for Medicaid spending—an average of 8. 3 percent annually from 2008 to 2016. According to Congressional Budget Office, Social Security, Medicare, and Medicaid together will account for 56 percent of all federal spending by the end of the projection period (up from 43 percent in 2006). Measured as a share of the economy, spending for the three programs will equal 10. 8 percent of GDP in 2016, up from 8. 7 percent this year. In addition, no evidence suggests that the growth of health care costs, which have risen faster than GDP over the past four decades, is likely to slow significantly in the future. As a result, spending for Social Security, Medicare, and Medicaid will exert pressures on the budget that economic growth alone is unlikely to alleviate. A substantial reduction in the growth of spending and perhaps a sizable increase in taxes as a share of the economy will be necessary for fiscal stability to be at all likely in the coming decades. References: Baker, Gerard. U. S. economy may be headed for a big crash. The Times of London. August 23, 2006. 23 Aug 2006. http://thechronicleherald. ca/Business/522414. html Barrell, Ray et al. World Economy Forecast. National Institute Economic Review. 28th July, 2006. No. 197. Baumohl, Bernard. Mid-Year U. S. Economic Forecasts For 2006 and 2007. Wharton School Publishing. June 15, 2006. 23 Aug 2006. http://www. whartonsp. com/articles/article. asp? p=420081rl=1

The Benefits Of Initiating An Information System Information Technology Essay

The Benefits Of Initiating An Information System Information Technology Essay A business information system is a group of interrelated components that work collectively to carry out input, processing, output, storage and control actions in order to convert data into decision making and operational activities in an organisation Source: Business Information Systems, technology, development and management for the e-business. (p.43) The reasons behind an organisation usually initiating an Information System can be put down to a business opportunity or problem and or the strategic advantage over its rival businesses in order to grow and survive in a competitive environment. A key question for an organisations reasoning behind whether or not to initiate an information system is, what would be the consequence of not having the proposed information system? The benefits of initiating an information system are, Some benefits to consider when an organisation is thinking of initiating an Information System are the 5 Cs of Senn (1995) Cost reduction: This is often the main objective in the introduction of a new system. Capability: being capable of achieving something which was not possible before. Communication: try to improve internal and external communications with costumers and suppliers. Control: better information delivery on things like performance. Competitive advantage: having the edge in a competitive market is vital to staying ahead or keeping up with the industry. A feasibility study. Before any organisation initiates an information System they must carry out a feasibility study. This is to establish whether the business problem or opportunity can be solved by introducing the new system and to check that it benefits the overall business strategy. This may involve two separate steps. The first, establishing an overall feasibility report of a project, to establish the objectives and the needs for a new system. Once it is decided that the whole project is worthwhile then a more in depth evaluation will be carried out and a list of different solutions will be drawn up. There is a sequence of activities which is undertaking during the initiation phase of any information system project. Assessing feasibility is arguably the most important step of the initiation phase. This involves a cost-benefit analysis and the effect on the organisation from having the new information system. Defining the business objectives and outlining systems requirements. The need for critical success factors (CSF) is valuable to help align business objectives with the new system. Evaluating acquisition alternatives, this will go through different aspects such as performance, suitability and cost from different suppliers. Defining scope involves specific system boundaries by describing which part of the business will be affected by the new system. Defining responsibilities to allow time for the final users of the system and managers input must be set aside along with the system developers. Assessing the risk involved to identify any potential problems which may affect the project and cause it to fail and taking precautions against this. Identifying the constraints and developing the project plan is useful for the estimating and planning of the initial project plan. This will take into account the size and the complexity and establish a preliminary timescale and also budget. The basis for a good business. Information systems are the basis for a lot of businesses. Most industries rely on an up to date information system for survival and even existence. Without the use of Information Technology it would be inconceivable, because of its critical role in increasing productivity. In a lot of modern organisations, information systems make extensive use of information technology such as desktop computers and laptops. This is mostly down to the advantages which arise from the use of such systems. Advantages, Speed, being able to process millions of instructions each second and completing each task in a very short space of time is hugely beneficial to any company or organisation. Accuracy, a calculation which is carried out by a computer is most likely to be completely accurate and human error can be reduced or even eliminated altogether. Reliability, computer-based information systems can in theory have no down time and can operate 24 hours a day. Programmability, the ability to change or to modify the software to suit any given function provides a high degree of flexibility. Combining these advantages is majorly beneficial to any business; however there are still disadvantages to an organisation which relies heavily on a computer based information system. Disadvantages, Judgement or experience cannot be thought to a computer based information system. Flexibility or improvisation, a computer based information system would be unable to react to an out of order or unexpected event or situation. Innovation, the computers inability to think outside of the box and to discover new ways to help improving processes or even solving problems. Conclusion. Many of the reasons for initiating an information system are to increase productivity, improve order fulfilment, business or customer demand, legal requirement, update an old system, technological change, or gain strategic advantage or the competitive edge over other companies in the industry, however there are a lot of steps in which an organisation must go through to see whether or not the system will benefit the companys overall business strategy. Once all the right steps have been taken and every part of the process mapped out, the decision must be made, taking into consideration the advantages over the disadvantages if the plan is feasible or not or whether it makes good business sense?

THE LIFE OF SOJOURNER TRUTH Essay -- essays research papers fc

The Life of Sojourner Truth I. Early Life A. Born a slave in 1797 1. Isabella Van Wagner, in upstate New York 2. She married an older slave and started a family. B. Sojourner Truth the most famous black female orators 1. She lectured throughout Northeast and Midwest on women's rights, religion and prison reform. 2. "Ain't I a Women" speech May 29, 1851 II. Moving to start a new life. A. The Civil War 1. She nursed soldiers, collected food and clothing for black volunteer regiments 2. The second edition of Truths Narrative B. Sojourner Truth in her 60's 1. Displayed the energy and determination that was inherent in her character. 2. Saying words of encouragement to black troops stationed in Detroit. III. Meeting Lincoln October 29, 1864 A. National Freedman's Relief Association 1. Appointed her to work as a counselor to freed slaves in Virginia. 2. Filed suits to affirm that black people had legal rights. B. Sojourners journey in the 1870's 1. Her visit with President Grant and the U.S. Senate in 1870 2. Advocating hanging as punishment for murder. Heather Hawthorne History 377 Dr. Schmider October 1,2003 The Life of Sojourner Truth Sojourner Truth wasn’t just a heroine to blacks, slaves, and women. She was also an abolitionist and a champion of women’s rights speaking throughout the country. She acted on her strong feelings about life and the way it should be. But, in my hometown of Battle Creek, Michigan where Sojourner Truth spent her last years, she is known for her powerful speeches that traveled the nation advocating for the fair treatment of freed slaves. Sojourn... ...famous Mob Convention in New York City in September, 1853, Sojourner Truth closed a lecture on women’s rights by warning those present that she would be â€Å"watching things†¦ and every once in a while I will come out and tell you what time it is.† For more than four decades, Sojourner Truth made good of her promise. Works Cited: Patten, Neil A, The Nineteenth Century Black Women as Social Reformer: The New Speeches of Sojourner Truth, Negro History Bulletin, 49:1 (1986, Jan/Mar) Association for the study of African-American Life and History "Sojourner Truth." Encyclopedia of World Biography, 2nd ed. 17 Vols., Gale Research, 1998. Reproduced in Biography Resource Center. Farmington Hills, Mich.: The Gale Group. 2003. http://www.galenet.com/servlet/BioRC "Sojourner Truth." Feminist Writers. St. James Press, 1996. Reproduced in Biography Resource Center. Farmington Hills, Mich.: The Gale Group. 2003. http://www.galenet.com/servlet/BioRC "Sojourner Truth." Historic World Leaders Gale Research, 1994. Reproduced in Biography Resource Center. Farmington Hills, Mich.: The Gale Group. 2003. http://www.galenet.com/servlet/BioRC

Alice Walker Essay -- essays research papers

Best known for her Pulitzer Prize-winning novel The Color Purple, Alice Walker portrays black women struggling for sexual as well as racial equality and emerging as strong, creative individuals. Walker was born on February 9, 1944, in Eatonton, Georgia, the eighth child of Willie Lee and Minnie Grant Walker. When Walker was eight, her right eye was injured by one of her brothers, resulting in permanent damage to her eye and facial disfigurement that isolated her as a child. This is where her feminine point of view first emerged in a household where girls were forced to do the domestic chores unaided by the brothers. Throughout her writing career, Alice Walker has been involved in the black movement and displays strong feelings towards the respect black women get. In 1961, Walker entered Spelman College, where she joined the Civil Rights Movement. Two years after graduating in 1965, she married Melvyn Leventhal, a Jewish civil rights lawyer; afterward, they worked together in Mississippi, registering blacks to vote. In the summer of 1968, she went to Mississippi to be in the heart of the civil-rights movement, helping people who had been thrown off farms or taken off welfare roles for registering to vote. In New York, she worked as an editor at Ms. Magazine, and her husband worked for the NAACP Legal Defense Fund. In 1970, Walker published her first novel, The Third Life of Grange Copeland, about the ravages of racism on a black sharecropping family. In Meridian, 1976, her second novel, she explored a woman’s successful efforts to find her place in the Civil Rights Movement. She read much of Flannery O’Conner's work and greatly admired her. For one thing, O’Conner practiced economy. According to Herbert Mitgang of the New York Times, "She also knew that the question of race was really just the first question on a long list"(1983). Much of Walker’s writings are very personal. For example, one of her first books once was written during a time in which she was pregnant and suicidal and it described how she had an abortion and dealt with all of its after effects. Unlike many other authors, she is not afraid to write about very personal experiences she has had. Since the beginning of her writing career, she has written sixteen books, including five novels, several collections of essays, short stories, children’s books, and poems... ...mp;quot;(1993). Overall, Walker has been a very influential author throughout the black community, and her audiences are very much interracial. Although many of the criticisms are controversial over her view of black men, through this research it is concluded that the depiction cannot be narrowed down to black men. She was merely describing the kind of man who had the potential and who was abusive. Not suprisingly, most of the controversy streams from the fact that there aren’t other black male characters portrayed to counteract the depiction of the abuser. This perceived imbalance however doesn’t mean that she is focusing all her anger towards black males, she is merely trying to illustrate topics that people know are true yet perhaps unwilling to admit it. Another good argument is that it seems as though critics are trying to force her to choose between her support for the black community and her support for the feminist movement, and she won’t do that for them. She is equally supportive of both, and that is a very admirable quality. Alice Walker was a very personal author who was not afraid to show or hide anything in the struggle against racism and support for black women. Alice Walker Essay -- essays research papers Best known for her Pulitzer Prize-winning novel The Color Purple, Alice Walker portrays black women struggling for sexual as well as racial equality and emerging as strong, creative individuals. Walker was born on February 9, 1944, in Eatonton, Georgia, the eighth child of Willie Lee and Minnie Grant Walker. When Walker was eight, her right eye was injured by one of her brothers, resulting in permanent damage to her eye and facial disfigurement that isolated her as a child. This is where her feminine point of view first emerged in a household where girls were forced to do the domestic chores unaided by the brothers. Throughout her writing career, Alice Walker has been involved in the black movement and displays strong feelings towards the respect black women get. In 1961, Walker entered Spelman College, where she joined the Civil Rights Movement. Two years after graduating in 1965, she married Melvyn Leventhal, a Jewish civil rights lawyer; afterward, they worked together in Mississippi, registering blacks to vote. In the summer of 1968, she went to Mississippi to be in the heart of the civil-rights movement, helping people who had been thrown off farms or taken off welfare roles for registering to vote. In New York, she worked as an editor at Ms. Magazine, and her husband worked for the NAACP Legal Defense Fund. In 1970, Walker published her first novel, The Third Life of Grange Copeland, about the ravages of racism on a black sharecropping family. In Meridian, 1976, her second novel, she explored a woman’s successful efforts to find her place in the Civil Rights Movement. She read much of Flannery O’Conner's work and greatly admired her. For one thing, O’Conner practiced economy. According to Herbert Mitgang of the New York Times, "She also knew that the question of race was really just the first question on a long list"(1983). Much of Walker’s writings are very personal. For example, one of her first books once was written during a time in which she was pregnant and suicidal and it described how she had an abortion and dealt with all of its after effects. Unlike many other authors, she is not afraid to write about very personal experiences she has had. Since the beginning of her writing career, she has written sixteen books, including five novels, several collections of essays, short stories, children’s books, and poems... ...mp;quot;(1993). Overall, Walker has been a very influential author throughout the black community, and her audiences are very much interracial. Although many of the criticisms are controversial over her view of black men, through this research it is concluded that the depiction cannot be narrowed down to black men. She was merely describing the kind of man who had the potential and who was abusive. Not suprisingly, most of the controversy streams from the fact that there aren’t other black male characters portrayed to counteract the depiction of the abuser. This perceived imbalance however doesn’t mean that she is focusing all her anger towards black males, she is merely trying to illustrate topics that people know are true yet perhaps unwilling to admit it. Another good argument is that it seems as though critics are trying to force her to choose between her support for the black community and her support for the feminist movement, and she won’t do that for them. She is equally supportive of both, and that is a very admirable quality. Alice Walker was a very personal author who was not afraid to show or hide anything in the struggle against racism and support for black women.

The House on Mango Street Feminist Elements :: Feminism Feminist Women Criticism

The House on Mango Street Feminist Elements Sandra Cisneros reveals her feminist views through her novel The House on Mango Street. She does this by forcing the reader to see the protagonist as an alienated artist and by creating many strong and intelligent female characters who serve as the protagonist's inspiration. The idea of the alienated artist is very common in feminist works. Esperanza, the protagonist, is alienated from the rest of society in many ways. Her Latino neighborhood seems to be excluded from the rest of the world, while Esperanza is also separated from the other members of her community. Members of other cultures are afraid to enter the neighborhood because they believe it is dangerous. Esperanza seems to be the only one who refuses to just accept Mango Street, and she dreams of someday leaving it behind. She is considered an artist because she has an extremely creative imagination which creates a conflict with the type of liberal individuality she seeks. This creative "genius survives even under the most adverse conditions..." (Gagnier 137). To escape the pain of this division, Esperanza turns to writing. She says, "I put it down on paper and then the ghost does not ache so much" (Cisneros 110). Gagnier sees a "distinction of the writer who nonetheless sees herself as somehow different, separate..." (137). Mango Street consists of mostly female characters. These characters are strong and inspirational, but they are unable to escape the suppression of the surrounding environment. According to one critic, "The girl's mother, for instance, has talent and brains, but lacks practical knowledge about society because, says Esperanza, Mexican men 'don't like their women strong' " (Matchie 69-70). It is Esperanza's mother who tells her to never be ashamed because shame can only hinder her dreams. In "The Three Sisters", the women tell Esperanza that she is special and remind her not to forget where she came from when she finally makes it out of Mango Street. This inspiration makes Esperanza understand that she must help others who aren't as fortunate to leave as she is. Esperanza is a very strong woman in herself. Her goals are not to forget her "reason for being" and "to grow despite the concrete" so as to achieve a freedom that's not separate from togetherness.

Building New Brands on the Internet

Consumers are the main source of revenues and profits of many businesses. Companies always try to ensure that their consumers’ welfare are noted and considered in their decision making. Companies strategize their marketing campaign based on what their target market needs. They try to create a name and reputation for themselves that would be â€Å"loved† by all their consumers and keep them coming back. Companies do this by doing common forms of marketing strategy which well-planned. Some of these marketing strategies are those that people see everyday, all around, in different forms.These can be advertisements in billboards, radio, television, newspapers, flyers, etc. But as technology continues to present new means of communication, these forms have now evolved and now include media such as mobile phones and the internet. Branding Defined What most companies want is for their names or brands to be popular and well-known. Most entrepreneurs and company executives consid er branding top priority in their â€Å"to-do† list. Some people think that branding is just merely a name or a logo that represents the company or the product.In its truest essence, branding is, in fact, more than that. Dunn defines branding as ‘a demanding, complex process that requires disciplined attention over an extended period of time. ’ For company heads who are serious in making a lasting impression and a great image for their company or product, branding is a major part of their everyday responsibilities. Dunn explains more: Branding is owning a single idea, concept or feeling in the mind or heart of the customer. Sometimes it’s just a word. A phrase. A thought. An emotion. Whatever it is, you want to own it in the mind of the customer.A brand helps differentiate you from the competition. It makes your product, service or experience different from all others. It lets you stand out from the crowd. Without differentiation, you might end up competin g only on price. And with price, there seems to be no bottom to the bottom. Markets today are extremely competitive and getting ahead of competitors and winning the hearts of customers are really important for any company. Customers now are also a lot wiser and smarter than before. They know what they want and they make sure that what they patronize is up to their set standards.Branding, indeed, is a lifelong effort as continuous improvement is necessary in order to keep up with the current demands of customers. What people want today may not be the same tomorrow. Advantages and Disadvantages of Branding Every company’s goals are to be ahead in the industry it belongs, be known to its target market and be profitable. An important factor in achieving these goals is to create a brand that will make a lasting impression to the company’s target market and make customers love it. Effective branding requires a lot of time, effort and creative minds.Geoffrey Randall enumerate d the following that brands can benefit the customers: †¢ Identity: the brand must identify itself clearly and unambiguously, so name, legal protection and design elements are important. †¢ Shorthand summary: the identity should act as a summary of all the information the consumer holds about the brand. [†¦] †¢ Security: buying a familiar brand should be reassuring. The brand should guarantee to provide the benefits expected. †¢ Differentiation: the brand must clearly differentiate itself from its competitors, and show buyers how it is unique. †¢ Added value: the brand must offer more than the generic product.These are just the five major things, but there are even more that brands can do to customers. Customers patronize brands for several reasons such as trust, instinct, perceived quality, knowledge and image. Customers like to try new brands but once they already found one that is a perfect fit for their taste, it is highly likely that they will stic k to that brand for a certain period of time. It may not be forever, though, that they will just go with one brand, unless the brand keeps on reinventing itself and always stays up to date with the current market demands.Thus, it is important for marketing people or brand managers to always be updated with the latest trend and be knowledgeable on what customers want. Nowadays, any industry, any market is so dynamic that changes happen every now and then. Being always in the loop on all market updates is imperative for all company owners and executives. Branding, indeed, has a lot of good benefits to the customers. However, with all the upside comes the downside of branding such as cost, time and difficulty in reinventing the brand.For a company to establish a brand, a lot of money is required. From research and development, application, testing, up to finally marketing the brand, a huge investment is definitely needed to ensure everything works out smoothly. There are also times whe n brands tend to already have a fixed image which makes it difficult for companies to deviate a little (i. e. adding another product of different kind) and still maintain customers’ trust in the brand. Reinvention is one factor to keep the popularity of the brand and make consumers love it as time goes by.However, when people already got so used to what the brand has to offer, it may be difficult to extend the brand which might create a new image for it. Time is yet another huge investment required in coming up with a brand and marketing it. Coming up with a good brand and make people love it does not happen overnight. These things, though, can all be worth it anyway when there is a solid plan on the table and an effective team working on it. Types of Branding There are different types of branding strategies that are adopted by different companies depending on how they want to be known by the market.Among these branding types are the following: †¢ Unique Branding  œ ‘A unique branding strategy allows a company to dominate a product area by building a successful brand that stands for just one thing. Such a brand can often become synonymous with the product. ’ A good example of this branding strategy is Procter & Gamble. This giant company manufactures a wide range of products. Each of those products has its own brand name such as Ariel, Pantene, Pringles, Pampers, Head and Shoulders, and a lot more. These brand names have been popular and have already been associated to its single type of product.But behind all of those household names, there is just a single company enjoying all the success. With this branding strategy, companies can come up with same product types and market them with different brand names. However, ‘it takes a significant investment in time, money and effort to establish a new brand. ’ †¢ Corporate Branding – This branding strategy is somehow the opposite of unique branding. The company has different product offerings but all using the same brand. An example of a company using corporate branding strategy is Apple.When customers are already familiar with the brand, it is easy for them to patronize new product releases of the company. Once the company already has the customers’ trust, it can come up with new products and not have difficulty marketing it. Releasing a new product using corporate branding takes significantly lesser time and money than unique branding. However, companies using this branding strategy should also be careful to maintain the quality of their product as a failure of one may affect the entire brand. Also, range of products may be limited so as to avoid customers doubting the company’s dedication to its original product line.†¢ Range Branding – This is a combination of the two abovementioned branding strategies. A single company creates two or more brands depending on the market needs and customers’ existing pe rception to its original brand. A good example of a company that utilized range branding is Toyota. The company Toyota came up with Lexus, another brand of cars but meant to be marketed to the upper societal class. Toyota decided to do this because people already have the perception of Toyota being an affordable brand and most of its clients belong to the middle class.Using the same brand to reach the upper class may be difficult for them as their original brand was already stereotyped. Branding Methods Development of brands can be done in different ways. Branding starts in identifying a striking brand name which may represent the characteristics of the product; or it may be a name that is easy to remember. It takes a substantial amount of time before companies can come up with a brand name that will be released in the market. On the more creative side, companies also do come up with logos associated with their brand name.Logos help companies attract more customers who will also ten d to remember the brand better because of the visual representation. Brand names and logos are important aspects of branding because those are the things that really represent the product. However, there is more to branding than just those representations. Branding should also happen within the company. The work environment and culture of the company should also coincide with what it is trying to promote. Executives and all employees of the company also represent the brand. They should embody the company’s and the brand’s beliefs, mission and vision.In short, employees should be able to â€Å"live the brand. † For example, in a fast food chain promoting quick, appetizing food on the go, the staff should act as quick as possible but still treat customers very well; packaging should be sturdy enough and really meant for people who like eating while moving; machines and equipments should be efficient to meet daily demands. The overall process in making the product and delivering the service should indeed â€Å"live the brand. † Advertising is also one other aspect which should not be taken for granted in branding.Coming up with the brand name and logo is one thing, but introducing it to the market is another. Creating an identity and making a name in today’s very dynamic market is not a walk in the park. A lot of time and great deal of effort is required for the company to reach out to customers and be known. Establishing the brand is the hard part but can be done if all the people behind the brand work together. The abovementioned brand development greatly applies to brick-and-mortar companies. Today’s generation needs more than just the traditional branding methods.Customers are now looking for more interactivity and convenience as today’s technology continuous to get better and better. Companies should now also try the world of e-commerce or building brands in the internet. Most people now have access to the int ernet and are aware of the different things they can do with it, which include researching, communicating, and online shopping. Companies trying to establish a new brand, want to extend their existing brand or want to reach more market will benefit with the interactive world of the internet. However, branding in the virtual world is a lot different.The only representation the company will have over the internet is its webpage. The homepage should have a very attractive and interesting layout that will make visitors stay. Backend should also be stable and reliable with fast servers and wide bandwidth. Existing brands who have already made its name offline should also keep their image online because that is what people will actually look for. Also, online presence also requires human intervention in terms of customer support which should be available 24 by 7, if possible. The website should also have an easy-to-remember domain name.‘Even the best web site will be overlooked if u sers cannot remember where to find it. ’ In online branding, customer experience is very important because this is where customer loyalty starts. Capturing customers’ attention right from the start and providing excellent customer experience through the company’s virtual presence translates to an effective online branding. ‘For an online business, the look and feel of its website and the quality of the interface is the most important way to communicate its brand. ’ Schools of Internal BrandingThe importance of employees embodying and living the brand has already been mentioned. This is, in fact, termed as internal branding. Within the company, all the employees should ‘fully understand and appreciate their brand [for them] to provide the desired brand experience to customers. ’ There are four schools of internal branding defined in book by Van Gelder. These schools are as follows: †¢ Mission school – asserts that organizatio ns must have a corporate belief, extolled by visionary management, that functions as an internal bonding mechanism and strategic directive.†¢ Strategy school – brand-based strategic management, in which the brand is the leading organizing principle of a corporation and drives all corporate activities. †¢ Communications school – sees branding as an internal and external communications strategy which is aimed at educating staff and customers alike about the brand. †¢ Organization school – aims to establish internal conditions that allow employees to deliver the correct brand experience to consumers during so-called moments of truth.These schools aim to deliver the best customer experience by making the company’s employees understand the brand and the image the company wants to create, and equipping them with the right tools and knowledge to accomplish their jobs. Whether branding is done offline or online, these things are important as there are always people working behind the brand. Conclusion Creating a name that will be inculcated in the minds and hearts of consumers is definitely not an overnight job.It takes a lot of time, effort and money to plan, strategize and decide on the right branding strategy that will be the best match for the products and services the company is selling. Technology, indeed, has opened more opportunities for companies to build and create a name. Yet, the requirements to be successful in making a name on the virtual world are more comprehensive. Marketing and building a brand through the internet is totally different from the common media that people have been used to. Nevertheless, the benefits of this, if done correctly, are better and more exciting than the usual means offer.Bibliography Dunn, D, Branding: The 6 Easy Steps, Cameron Street Press, Oakland, 2004. Mauro, C, Visual/Interactive Brand Development, TaskZ, 2000, retrieved 4 May 2007, < http://www. taskz. com/visual_interactive_i ndepth. php> Randall, G, Branding: A Practical Guide to Planning Your Strategy, 2nd ed, Kogan Page Limited, Dover, 2000. Seidenberg, J, Three Types of Branding, Deltaflow, 2006, retrieved 4 May 2007, Van Gelder, S, Global Brand Strategy: Unlocking Brand Potential Across Countries, Cultures & Markets, Kogan Page Limited, 2003