Critically Analysis Of Professional Development Education Essay

Committed to a certain criterions of behavior is called the professionalism. This declaration is force us more productive as a whole. This professional cognition that people see you in your manus as a messenger of their Company, section, concern, community, etc. It is Professional ‘s duty to act in the ways that brings recognition to themselves and more significantly to the organisation. If we think about the features of communicating. Communication is important in my definition of professionalism because, communicating is frequently the solution of all jobs. In order to be deafening in concern everyone has to be satisfied with their occupation and atmosphere. Communication gives workers the chance to province their sentiments, concerns, or encouragement. It helps people work more expeditiously as section, therefore doing concerns blossom. Many qualities make up a individual ‘s character. Equally good as Honesty is really of import in portraying good character because it helps a individual to derive the trust of others. In a good working environment people have to number on each other for many things, and being an honest individual makes it a batch easier. Once trust is lost, it is difficult to derive back. Assurance is a key to being a professional. A confident individual who has the ability to manage every thing is non afraid to take a hazard and at the terminal of the twenty-four hours do a batch of money. Some hazards need to be taken particularly when the wages outweighs the hazard. Confident people climb the societal ladder and adapt to what needs to be done in different countries. Assurance is frequently an property found in leaders and every company needs a leader. Respectfulness is something that should be nowadayss everyplace. Peoples should acknowledge their higher-ups and handle them with the extreme respectful manners. Respect should be given to your seniors, because you would anticipate the same has to be done from your juniors. Performance wise I am bit weak of as Cyril o houle ‘s demands as he is reference that in his public presentation features: cognition and accomplishment base pattern for the personal development which can besides depict in pattern of your profession: a adult male should be command of theoretical cognition which is come be experience ; to work out the jobs easy ; so usage of practical cognition which I learnt in my yesteryear by sing the easy and difficult undertakings in my past life or by the professional surveies ; in the terminal he said self enhancement harmonizing to the professional by take parting the cognition base activities. For case, reading books, listserv treatment groups, newspapers etc. Continue professional instruction besides heighten the sense of professional association and individuality. Basically we are following the demands: in other words every one is in race of demands, holding evolved over 10s of 1000s of old ages. So I would wish to demo the maslow ‘s hierarchy of demands motive theoretical account which is still valid in all over the universe since 1940's-50 ‘s. This theoretical account explains how these demands motivate us all. It shows us how we must hold to fulfill each demand in bend, get downing with the first, which deals with the most obvious demands for endurance itself. If lower order demands of physical and emotional wellbeing are satisfied so we need to worry about with the higher order demands of influence and personal development.3. Mention from old undertakingHarmonizing to my 1st undertaking of my assignment I had explained my formal professional development in the signifier of my analyzing in Bachelorette grade in calculating I did that in twelvemonth 2005, every bit good as in informal developments of my life. It helps me a batch in my life, to alter my life manner and nearing manner every bit good as how to manage the jobs more expeditiously and efficaciously. But I have n't had any practical cognition in IT field but still I am seeking to acquire the higher degree of my professional abilities in information engineering wh ich I will able to acquire by utilizing these techniques are below. Which I have found them in my Professional development category, these are really first-class for a professional ‘s if they will use on his practical life.Reflected surveies:What is contemplation or reflected surveies?As we know contemplation is an every twenty-four hours procedure as we interact with series of job which we face every twenty-four hours in our life. By snaping these inquiries: What went good? What did n't? Why? How do I experience about it? It merely happens as interior feelings, ideas and emotions about something by and large. To undertake the jobs we think possibly we can take to make something otherwise, or non, as a consequence of reflecting, but contemplation is basically a sort of loose processing of ideas and feelings about an event. Any event or experience at all. Contemplation can be a more structured manner of processing in order to cover with jobs. This type of contemplation may take topographic point when we have had clip to be stand back from something, or speak it through, as in: as on one contemplation, I think you might be right ‘ , or on the 2nd ideas, I realised he was more disquieted than me. ‘ If we deliberately reflect as portion of the function, there would be a unsmooth patterned advance of ‘How did it travel? What went good? Why? What did n't? Why? What next? ‘ Examples might be of a cricket manager reflecting after a lucifer, a instructor reflecting on a lesson, or merely a parent believing about how best to cover with a adolescent. In this sort of contemplation, the purpose is to look profoundly at what happened, kind out what is truly traveling on and research in deepness, in order to better, or alteration something for following clip.3.2 Key Necessities of a contemplation1. Understanding of an event: We do n't ever larn from experiences. Contemplation is where we critically analyse our experiences. 2. Standing back technique: It could be hard while standing back but it is good technique with that you will gain or could acquire the hitter position of a state of affairs. 3. Repeat: Contemplation involves making one thing once more and once more to make a broader position of the incident to carry through accurately. Or it could assist you to look into the mistakes to change them in right manners. 4. Endeavoring after truth: we acknowledge the truth of any state of affairs by endeavoring or delving deeper in the incident. 5. Reviewing activities: Contemplation can convey greater lucidity, if you see the same incident in same for your chance for case, seeing events reflected in a mirror. This can assist at any portion of planning, reexamining activities. 6. Learning ability: Contemplation is about larning and life long learning and understanding in deepness of any thing. This includes deriving valuables knowledge that can non be merely ‘taught ‘ . 7. Decisions: Contemplation is as constructing blocks of any incident for pulling decisions in order develop an attack, scheme or motion. Contemplation is a type of believing associated with deep idea, aimed to accomplishing better understanding. It contains a mixture of some necessities:3.3 Reflecting on your acquisition:It can assist you take an nonsubjective position of your advancement and see what is traveling good and what needs to be emend or needs to alter for the following clip it is about future planning. 3.4 Key inquiries to believe about as practising contemplation acquisition: 1. How did it travel? How do I experience about it? 2. What went good, or OK? Why? 3. What was non so good? Why? 4. How could this have been done otherwise? 5. What should I alter or work on for following clip? What would be the first measure?3.5 Advantages of contemplation acquisition:You will experience that instantly so you would n't travel in front you will wait until every thing is all right, it helps you see what went good and give you spotlight on the positive side of an action every bit good as the more negative side of the action or event. Helps you to develop a problem-solving attack, instead than stand back believing about troubles. For case, it is really helpful to reflect when you receive feedback of on your assignment, as a manner of utilizing the feedback to alter or develop your attack.3. DecisionManner I have n't learnt decently? What were the hindered in my life?Writing merely for me means I can compose freely, ideas and feelings are expressed in a relaxed and informal manner. I can do leaps in my thought and research connexions between ideas this composing a originative procedure that encourages me to develop new thoug hts. Writing on a regular basis in a diary helps me to develop and experiment with my ain authorship manner. Puting thoughts into words is a important academic authorship accomplishment. It takes pattern to develop a manner you feel comfy with, and a diary is a good topographic point to take some hazards and seek out different ‘voices ‘ . You do n't hold to compose a batch at one time, but it does assist to compose small and frequently, if possible every twenty-four hours. It helps your assurance to look back over a diary and see advancement, how you have dealt with troubles, and how your thoughts have moved on. Develop your composing manner ; composing on a regular basis in aid you develop and experiment with your ain authorship manner. Puting thoughts into words is a critical academic authorship accomplishment. It takes pattern to develop a manner you feel comfy with, and a general is a good topographic point to take some hazards and seek out different ways. You do n't hold to compose a batch at one time, but it does assist to compose small and frequently, sooner every twenty-four hours. It helps your assurance to look back over authorship and see advancement, how you have dealt with troubles, and how your thoughts have moved on. It is really utile to hold a note of issues and questions you might desire to raise with a coach or other pupils. A general authorship is an of import record for look intoing back, and can assist you plan following stairss.

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

The Secret of Ella and Micha Chapter 2

Ella â€Å"I swear to God if we don't find a bathroom soon, I'm going to piss in my pants.† Lila bounces up and down in the driver's seat. The air conditioner is turned up as high as it will go and â€Å"Shake it Out† by Florence + The Machine plays from the speakers. There's a long road of highway stretched out in front of us, weaving over the hills spotted with trees, sage brush, and the pale pink glow of the sunset. My cell phone is in my pocket, heavy like it weighs a hundred pounds. â€Å"You can always pull over and pee behind a bush.† I prop my bare feet up on the dash and pull my white lacy tank top away from my skin to get air flowing. â€Å"Besides, we're like five minutes away from the off-ramp.† â€Å"I can't hold it for five more minutes.† She shoots me a dirty look and squeezes her legs together. â€Å"You're not going to think it's so funny when the car smells like piss.† I smother a laugh and search the GPS for the nearest restroom. â€Å"There's one right off the exit, but I think it's more of an outhouse.† â€Å"Does it have a toilet?† â€Å"Yes.† â€Å"Then it works.† She makes a sharp swerve, cutting off a silver Honda. The Honda lays on its horn and she turns in her seat to flip him the middle finger. â€Å"What a jerk. Doesn't he understand that I have to pee?† I shake my head. I love Lila to death, but sometimes she can be a little self-centered. It's part of what drew me to her; she was so different from my old friends back in Star Grove. My phone beeps again for the millionth time, letting me know I have a message waiting for me. Finally, I shut it off. Lila turns down the music. â€Å"You've been acting weird ever since we left. Who called you?† I shrug, gazing out at the grassy field. â€Å"No one I want to talk to right now.† Five minutes later, we pull up to the outhouse at the edge of town. It's more like a shack with rusty metal siding and a faded sign. The field behind it is spotted with corroded cars and trucks and in front of it is a lake. â€Å"Oh thank God!† She claps her hands and parks the car. â€Å"I'll be right back.† She jumps out and shuffles inside the bathroom. I climb out of the car and stretch my legs, trying not to look at the lake or the bridge going over it, but my gaze magnetizes toward the level bridge with beams curving overhead and out from the sides. The middle one was where I was standing the night I almost jumped. If I squint one eye and tilt my head, I can spot it. An old Chevy pickup comes flying down the road, kicking up a cloud of dust. As it nears, my nose twitches because I know who it is and he's one of the last people I want to see. The truck stops just outside the perimeter of the field behind the restrooms. A lanky guy, wearing a tight t-shirt, a snug pair of jeans, and cowboy boots comes strutting out. Grantford Davis, town pothead, infamous brawl starter, and the guy who dropped me off at the bridge that God awful night eight months ago. I bang on the bathroom door. â€Å"Come on Lila, hurry up.† Grantford looks my way, but there's no recognition in his eyes, which isn't surprising. I've changed since the last time anyone saw me, shedding my gothic clothes, heavy eyeliner, and tough-girl attitude for a more lighter and pleasant look, so I blend in with the crowd. â€Å"You can't rush nature, Ella,† Lila hisses through the door. â€Å"Now let me pee in peace.† I watch Grantford like a hawk as he rolls a tire across the field toward his pickup. The bathroom door opens and Lila walks out cringing. â€Å"Gross, it was so disgusting in there. I think I might have caught herpes just looking at the toilet.† She shivers, wiping her hands on the side of her dress. â€Å"And there were no paper towels.† Grantford has disappeared, although his truck is still there. I grab Lila's arm and tug her toward the car. â€Å"We need to go.† Lila elevates her eyebrows questioningly as she tries to keep up with me. â€Å"What's wrong with you?† â€Å"Nothing,† I say. â€Å"There was just this guy over in the field that I really don't want to talk to.† â€Å"Is he an old boyfriend?† â€Å"No, not even close†¦.† I trail off as Grantford rounds the bathroom. There's sweat on his forehead and grass stains on his jeans. â€Å"I need to talk to you for a minute.† â€Å"Why?† I question, swinging the car door open. Please don't bring up that night. Please. Lila freezes as she's opening the door and her gaze darts to me. â€Å"Ella, what's going on?† Grantford tucks his hands into his pockets, staring at the hood of the car. â€Å"This ain't your car, is it?† â€Å"No, we just stole it and took it for a joy ride.† Shit. Ten minutes back and my old attitude is slipping out. â€Å"I mean, yes it is – her car anyway.† I nod my head at Lila. â€Å"Well, I was just wondering how fast it goes?† He gives me a fox smile that makes me want to gag. I was never a fan of Grantford. He always had a sleazebag attitude, which was part of the reason why I had him drive me to the bridge that night – he was the only one I knew who would leave me there alone. I can't help myself. â€Å"Probably a lot faster than your pick up over there.† He has a shit-eating grin on his face. â€Å"Is that a challenge?† I shake my head and motion for Lila to get in the car â€Å"Nope, that wasn't a challenge. Just a mere observation.† Recollection fills his eyes. â€Å"Wait a minute. Do I know you?† Ignoring him, I start to shut the door, but he catches it. â€Å"Holy crap! I do know you. You're Ella Daniels.† His eyes mosey up my legs, cutoff jeans, lacy white tank top, and land on my eyes lined with frosty pink eyeliner. â€Å"You look†¦ different.† â€Å"College will do that to you.† I scale up his scuffed cowboy boots, his torn jeans, and stained shirt. â€Å"You haven't changed a bit.† â€Å"I see your mouth hasn't changed at all,† he snaps. â€Å"And besides, you didn't change for the better. In fact, you look like you could be friends with Stacy Harris.† â€Å"Don't exaggerate the situation,† I say. Stacy Harris was a popular girl in our grade; head cheerleader, homecoming queen, wore a lot of pink. His face scrunches. â€Å"You didn't just change on the outside either. If anybody would have compared you to Stacy Harris, you'd have punched them in the face.† â€Å"Violence solves nothing.† I begin to shut the door again. â€Å"I have to go.† He complements my move and seizes the door, prying it back open. â€Å"You ain't going anywhere until I get something out of you.† â€Å"Like a kick to the balls,† I threaten, but my insides churn. I can talk tough, but when it all comes down to it he's a really big guy who could easily hurt me. His grey eyes turn black as the sun sets behind the shallow hills. â€Å"I heard you bailed. Packed up your stuff one night and took off. Pissed off a lot of people, too. The ones that were always protecting you when that mouth of yours got you into trouble. Especially that one guy you were always with.† â€Å"Don't pretend like you don't know his name.† My voice is slightly uneven. I feel out-of-control of the situation and I'm starting to panic. â€Å"You don't forget the names of the people whose fist have slammed into your face.† A vein bulges in his thick neck as he punches the window. â€Å"That night I was wasted and Micha was completely sober. And it was total bull shit that he sucker punched me for leaving you on the bridge. I mean, you asked me to take you there. How the hell was it my fault?† Apparently, Micha hit him more than once because it's not the instance I'm referring to. I tug at the door handle. â€Å"I'm going to close the door now and you're going to walk away.† â€Å"Who are you?† His eyes are all over me. â€Å"I'm who I always was,† I mutter. â€Å"Just without all the baggage.† Calmly, I close the door. â€Å"You can drive away now, Lila.† She floors the car backwards and skids it onto the asphalt. I don't look back at Grantford or the bridge. I breathe through my nose, trying to stay composed and in possession of my feelings. â€Å"What was that about?† Lila asks. â€Å"Who was that creep?† I buckle my seatbelt and turn up the air conditioning. â€Å"Just some guy I used to know from high school.† â€Å"I thought he was going to kill you or something†¦ Maybe we should call the police.† Flashbacks of my old life resurface. â€Å"That's just how things are around here. Besides, he was all bark and no bite. Trust me. He was just irritated with something I did.† Her eyes enlarge and she grips the steering wheel. â€Å"What did you do?† I glance in the rearview mirror at the desolate road behind us. â€Å"Nothing I want to talk about.† She slows down as the speed limit decreases. â€Å"How did you do that? You were so calm even when he tried to hold the door open. I was freaking out.† â€Å"It was just instincts,† I lie. If she knew the real reason we sure as hell wouldn't be friends. *** The urge to make Lila flip a U-turn and floor it back to Vegas becomes more powerful the closer we get to my home. Lila relaxes about the Grantford ordeal when the outhouse is far behind us. We make the rest of the short drive talking about classes and frat parties, but when we pull into the driveway of my house, her fear and panic reemerges. â€Å"This is†¦ nice.† She shudders as she peers through the windshield. â€Å"So this is where you grew up?† The full moon shines in the starry sky, lighting up the trash piled in the driveway, the old cutlass balanced on cinderblocks in front of the garage, and the peeling paint off my two-story home trimmed with a broken rain gutter that's swaying in the wind. The tree beside my window looks like it's dying. It was once my gateway for sneaking out of my room, but the last time I snuck out was the night my mother died. I'll never climb that damn tree again. â€Å"Yep, this is home.† I step out into the cool breeze. Rise Against â€Å"Like an Angel† blasts from the speakers next door. The lights are on in the house, and there's a lot of screaming and yelling going on. The driveway is lined bumper to bumper with cars and people are smoking on the dry front lawn and on the deck. One of Micha's parties. It's like time has frozen and was waiting for me to return. â€Å"God things never change around here.† I round the back of the car. â€Å"Lila, can you pop the trunk, please.† The trunk pops open and Lila steps tentatively out of the car. Her eyes fasten on the party and she's chewing on her thumbnail, which is a nervous habit of hers. â€Å"Jeez, it's more intense than even a frat party. I didn't know that could be possible.† I sling a heavy bag over my shoulder. â€Å"Are you sure you want to sleep at my house tonight?† I rummage through the trunk for the bag holding all my toiletries. â€Å"There are some pretty decent hotels in the next town over.† â€Å"I'm just not used to this kind of a place. That's all†¦ But I'm sure it's fine.† She collects one of my pillows from the trunk and hugs it tightly. â€Å"Are you absolutely sure?† I balance a small box under my arm. I don't want her to stay and witness this side of my life. â€Å"This place is a lot to take in for some people.† She narrows her eyes and points a finger at me. â€Å"I may come from an upper class town, but that doesn't mean I haven't been in rougher areas before. Besides, we went to that pawn store that one time in Vegas and that neighborhood was definitely sketchy.† It really wasn't that bad of an area, but I decide to let it go, since she'll only be staying here for one night. â€Å"Sorry, I just†¦ I want to make sure you're comfortable.† I shift the bag onto my hip and feel around the dark trunk for my other bag. â€Å"I promise I can manage for one night.† She crosses her heart with her finger and smiles. â€Å"In fact, I might even get brave enough to go check out the party next door.† I rapidly switch the subject. â€Å"We can probably get the rest of this stuff out tomorrow, since it's dark and I can barely see. And I don't know about you, but I'm exhausted.† â€Å"I think†¦Ã¢â‚¬  Her eyes wander in the direction of the driveway. â€Å"Dear God Almighty, who is he? Wait a minute. Isn't he†¦ yeah†¦Ã¢â‚¬  She lets out a quiet squeal and hops up and down. â€Å"Ella, I think it's the guy from your drawing, that Micha guy you insist you never dated.† My bag falls to the ground as I slouch down, debating an escape. Duck under the car? Run into the house? Dive into the trunk? â€Å"Hey there, beautiful,† Micha says in his flirty tone. â€Å"You shouldn't park your car out here in the open. Someone will probably jack it.† The sound of his voice sends a tremble through my body that coils down deep inside me. I thought the feeling would be gone after being away for eight months, but somehow time has had the opposite effect – it's amplified and taking over my body. I pretend to be engrossed by a box in the trunk and put my head amidst the shadows. Lila giggles. â€Å"I'm sure my car will be okay. This is my friend's house.† â€Å"Your friend's house†¦Ã¢â‚¬  He drifts off, making the connection and anxiety strangles me. â€Å"Wait a minute? Are you talking about Ella Daniels?† Collecting myself, I slam the trunk down. When he sees me, his eyes enlarge and he has the same expression on his face as when his mama told him his daddy wasn't ever coming back. He blinks the stunned expression away and a hint of anger transpires. â€Å"What are you doing here? I thought you were in Vegas.† For a moment, I'm unable to speak, caught in a mixture of emotions from seeing him again. Micha has always been stunningly beautiful in a way that makes artists' hands ache. He's dressed in a red plaid shirt, dark jeans, and a pair of black boots. His lips are full and ornamented with a silver loop and his dirty blonde hair has a slight wave to it. His skin is like porcelain and his aqua eyes carry more than I can handle. â€Å"I was down there for school, but I'm back now,† I say in the polite tone I've used with everyone over the last eight months. But on the inside my heart is wild, and my blood is roaring with the same yearning I felt for him when I left. â€Å"Wait a minute. You knew I was down there?† He sidesteps around Lila and positions himself directly in front of me. Micha is one of the few guys that is taller than me and I have to angle my head up to meet his eyes. â€Å"I had no idea where you were until this morning,† he says. â€Å"Since you didn't tell anyone where you went.† The ache in his voice stabs at my heart and the phone carrying the voicemail in my pocket weighs a thousand pounds. â€Å"Sorry, but I needed a break from this place. It was†¦ things were†¦ well you know how it was.† â€Å"No, I don't know how it was.† He braces a hand on the trunk like he's going to fall over. â€Å"Since you took off and never told me where the hell you went.† I need to go before he gets to me, and all my self-control evaporates. Picking up my bag from the ground, I wave good-bye to him. â€Å"It was nice talking to you again, but we've been on the road for like twelve hours and all I want to do is lay down.† â€Å"I'm not really that tired,† Lila says and I press her with a pleading look. â€Å"Oh, wait maybe I am.† She fakes a yawn. I hurry for the side door of my house, but Micha blocks my path, and his hand comes down on the car like a railroad track barricade. He drags his lip ring into his mouth with a passionate look on his face, like he might kiss me or something. For a second, I wish he would. He leans toward my ear, lowering his voice to an intimate level. â€Å"Come with me somewhere. Please. I've been waiting eight months to talk to you.† I flinch at my body's fiery reaction his voice emits. â€Å"I can't talk to you, Micha.† I choke, backing away, and bumping my hip on the edge of the car. Tears threaten the corners of my eyes, but I haven't cried in over a year and I refuse to break down. Spinning on my heels, I dash for the house. He doesn't call out to me – it's not his style. But his gaze bores a hole into my messed up head the entire way, until I'm finally locked inside my house. Then I can breathe again. Micha I swear I'm dreaming. Ella is standing in front of me and she looks just like Stacy Harris, a slutty cheerleader we used to go to high school with and who Ella beat up once because Stacy was making fun of a girl in a wheelchair. It was one of the things that made me fall in love with her; the fire, passion, and the need to stick up for the outcasts, even if it meant being an outcast herself. She never fell into any category – she was just Ella – but now she looks like a freakin' Stepford Wife. She's still hot as hell, a rock hard body, and long legs that go on forever. I've pictured those legs wrapped around my waist many times and the same images flood my head, even though she looks like a stranger. Her gorgeous green eyes are glossed over, like she's repressed everything inside. She's unhappy to see me and it hurts a little, but pisses me off more. She starts rambling about being tired, something she used to do all the time to avoid confrontation. I watch her lips move, wanting to kiss her so God damn bad, but knowing she'd probably kick me if I tried anything. So I lean in, smelling her hair and beg her to come with me somewhere. Then she runs down the driveway and locks herself in the house. I start to chase after her, but a Frisbee smacks me in the side of the head. â€Å"Sorry man,† Ethan calls out, hopping over the fence with a smirk on his face. â€Å"It slipped.† Rubbing my head, I arch my eyebrows at Ethan. â€Å"Perfect timing asshole.† He holds up his hands. â€Å"I said I was sorry. You were just standing there all dazed out like a freaking whipped pussy, so I thought I'd snap you out of it.† He scoops up the Frisbee from the concrete and gives a low whistle at Ella's friend's Mercedes as he circles it rolling up his sleeves. â€Å"Whose sweet ride is this? Wait, is it Ella's?† â€Å"I think it's her friends.† I eye the back door of her house, debating whether I should barge in after her and demand to know why she shut me out for eight months. â€Å"Since when does Ella hang out with people who drive cars like this?† he asks, peeking through the tinted windows. â€Å"She's been gone for eight months.† I back toward the fence that separates Ella's yard from mine with my hands in my pockets. â€Å"Who the hell knows who she is anymore?† I need a drink, even though I haven't had a drop of alcohol in eight months. The day Ella took off, with no note or a good-bye, I had gone up to the cove, got drunk, and took all my anger out on Grantford Davis' face. The cops showed up and I got busted for being under the influence and for assault. I'm still on probation for it and I had to go to anger management classes for a while. I've been really good about keeping my crap together, but five minutes after Ella shows up and I'm about to throw it away. I head to the kitchen, scoop up a beer from the ice chest, and settle on the couch between a blonde and a brunette. The blonde one giggles. â€Å"Oh my God, is the bad boy Micha finally back?† I can't remember her name, but I play along. â€Å"I sure am, baby.† Then I swig my beer back and bury my pain, along with Ella. She's the only girl that's ever been able to get me this upset. The only girl that's never wanted me.

The Sociological Aspects of the Climate Change Phenomena Essay

The Sociological Aspects of the Climate Change Phenomena - Essay Example The sociological perspectives that will be used include deviance, social change, and social stratification among others. The paper also includes a discussion of the measures that can be adopted to reduce the negative effects of climate change. Climate Change Review ‘APNewsbreak Panel says wild weather worsens’ this is the title of the article that will be reviewed and analyzed. The article by Borenstein and it talks about the effect of climate change on weather. In the article, Borenstein asserts that the weather conditions in different areas are becoming worse by day and that the change is a man-made made disaster. The article goes on to show how man has contributed to climate change and what can be done to reverse the negative effects that are already being experienced with different magnitudes in different areas (Borenstein 2011). There are many events that happen in the world, and these events leave people scrambling to find answers to the different outcomes of the e vents. Sociology as a discipline, therefore, offers people a way to explain the different reasons or the motivations behind the economic, social or political issues or events of the day. One of the issues that is receiving global attention and which can be analyzed using the sociological concepts is the issue of global warming and climate change. While there are many explanations and theories that are put forward to explain global warming, the global warming phenomena can be said to be a social phenomenon and is, therefore, best explained from a sociological standpoint. As global warming is discussed in the media and in the public domain, it elicits different reactions and attitudes. Most of the discussion on global warming is informed by the idea that global warming is a phenomenon that is caused by human activity and can be rectified through human action. There is, however, a group of people that believe that global warming has been exaggerated and is not in reality as it is prese nted (Henslin, 2010). Climate change is a significant change that occurs in the distribution of the different weather patterns over given periods of time. The change in the weather patterns is long lasting and may even be permanent (Borenstein2011). In the article it is suggested that some of the effects that climate change will have is a rise in the sea level, an increase in the occurrence of severe weather events (including droughts, hurricanes and floods), the decreased availability of fresh water for use, and the change in the seasons as we know them which will lead to temperature changes and changes in the growing seasons which will, in turn, affect the availability of food supplies. To understand global warming from a sociological perspective, sociological concepts can be applied as follows: Social Constructionism (Concept 1ID) Social constructionism refers to the way through which the individual members of a given society construct their social reality (Concept 1 df) In order to understand the human decision-making processes, it is important that one understands the motivation that led to the specific decision being taken.

Information Technology Trends Research Paper Example | Topics and Well Written Essays - 500 words

Information Technology Trends - Research Paper Example Antà ³n, P. S., Silberglitt, R., & Schneider, J. (2001).  The Global Technology Revolution: Bio/Nano/Materials Trends and Their Synergies with Information Technology by 2015. This work comprises the most important issues of information technology development. Technological trends, such as information processing, practical implications of false memories, recognition and other phenomena. The most important fact is that people are able to design robots, information systems and other innovations may be developed on the basis of new developments in information technology. Bednarzik, R. W. (2005). Restructuring Information Technology: Is Offshoring a Concern? Employment Trends by Industry and Occupation Suggest That Offshoring in the Information Technology Sector Occurs, but Not to a Great Extent.  Monthly Labor Review, 128(8), 11+. The role of modern trends in information technology is important for international employees. Therefore, a reconsideration of information technology’s role in professional experience of every employee is of crucial concern. When combining trends of globalization and information technology development, it is evident that white-collar services are of the utmost importance nowadays. It is underlined that employees’ training in information technology innovations requires huge costs, but making investments into this sphere is very important for any international company. Godwin-Jones, R. (2008). Emerging Technologies Mobile-Computing Trends: Lighter, Faster, Smarter.  Language, Learning & Technology, 12(3), 3+. This article is focused on a specific issue of mobile computing field’s developments. In this are, such trends as advanced usability, faster networking are of great concern. The developments of modern iPhones from Apple, Google-led Android phones indicate a high level of competitiveness in the field of mobile computing. Thus, this article is interesting and many

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Occupational Therapy Assistant Program - Essay Example The therapist is a challenge, enabling people of all ages to lessen to a greater or smaller degree or to completely overcome those disabilities that hamper their ability to live and work independently. I work as a nurse’s aide taking care of patients and assisting them in their daily living. It gives me immense satisfaction to see patients recover and go back to the productive, satisfying and meaningful lives that were impeded by disability. This field has attracted me and I want to get to the next level in my chosen field, hence my application to Harcum College for the Occupational Therapy Assistant Program. Harcum College attracted me because of the student-centric strategies used for teaching and the flexibility of the program. I am also looking forward to the exposure I shall get to new methods that enable occupational therapists to increase their success rates. I should also like to learn to work in different environments that give a broader perspective of the field and e nable me to work with patients with different disabilities and in varied age groups. The exposure that I will get as a result of coming into contact with people who have worked in environments different from those that I have experienced; will I think to improve my understanding and skills in dealing with a wide variety of patients. I look forward to working with settings that I have not worked before that will give me a chance to learn new techniques and hone my existing skills. Health has always been considered man’s greatest wealth. I think good health is the key to a door that opens innumerable opportunities. It will give me immense satisfaction if I can in some measure help people overcome their disabilities.  

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Wheelchair regulation Coursework Example | Topics and Well Written Essays - 500 words

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The Recent and Current Global Financial Crisis Essay - 1

The Recent and Current Global Financial Crisis - Essay Example This view has recently been confirmed by an IMF report (2011), that financial crises usually follow "credit or asset price bubbles" (IMF, p. 6). Moshirian (2010) has found that the inability of national regulatory bodies to respond adequately to a global market that has become increasingly interdependent has left these bodies unable to control regulatory arbitrage and the international movement of toxic assets (p. 504). In a way of confirming these last two perspectives Longstaff (2008) has found that lower movements in the ABX Index of credit-default swaps did cause financial contagion in other financial markets. This report will show how in the US, deregulation did serve to encourage market liquidity that could have advantaged banks and homeowners. The report will explain how the lack of appropriate regulation in the financial markets led to both a real estate bubble and the global financial crisis that reached the UK and world markets. Â  Since the Great Depression, the American government has initiated programs that encouraged homeownership for the average citizen while at the same time promoting and ensuring savings, as assets in banking institutions, that could be used to pay for mortgages. Following World War II there occurred several rounds of deregulation policy expressed through the passage of US federal acts that eventually, though not intentionally, allowed banks to collateralize the assets and to use them, as investment banks, to participate directly in the secondary financial markets. Deregulation was originally intended to finance supply with more liquidity of resources in order to meet an increasing demand in the real estate market.

The development of the American Empire Essay Example | Topics and Well Written Essays - 750 words

The development of the American Empire - Essay Example As they sensed a power vacuum and a unique opportunity to influence the United States, the Union was specifically interested in stymieing these efforts and ensuring that the conflict remained as one between the states. More or less, these efforts were widely successful and they helped to encourage the further understanding the continent of North America, and the surrounding regions could be viewed as the sphere of influence upon which the United States alone had the license to meddle. However, understanding the way in which the American concept of empire developed cannot be appropriately effected without a cursory discussion of the doctrine of Manifest Destiny. Manifest Destiny was the intrinsic belief that the Almighty had provided the United States with dominion over all the land between the Atlantic and Pacific oceans. This belief had a profound impact with regards to the way in which colonization of these lands took place and the means through which the native populations were mi streated and relocated. Just as Manifest Destiny and an interpretation of American sovereignty came to be formed during and before the Civil War era, as well as afterward, the course upon which the United States would eventually engage was all but assured. One of the most obvious interventions within this sphere of influence took place during the Spanish American War; a time in which the United States sought to further weaken the Spanish Empire and take territories in the Pacific – as well as carve out further influence within the Caribbean.

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Advantages and Disadvantages of tables computers for traveling salespeople - Essay Example The main aim of this paper is to provide a detailed analysis of the growing use of tablet computers by sales people. The paper would also contain a clear view of the various advantages and disadvantages of the tablet computers that can help salespeople to decide whether to choose tablet computers over other portable devices available in the market. The segments of tablet computers are considered to be one of the growing markets amid other electronic gadgets available in the business market. The main reason behind the growing preference of tablet computers over personal computers (PC’s) and laptops is their superiority in terms of convenience and features when compared to other hand held devices. It is worth mentioning that today’s youth also considers tablet as their first choice over mobile phones as they get larger screens and also provides additional advantages like high battery backup, full screen access and also provides the facility of calling over the laptop. The adaption of tablet PC by salesperson can be widely viewed due to their enhanced features and usability. The prime reason behind adapting tablet computers by salesperson it that, it not only provides them the advantage of carrying it anywhere but also helps in securing the data and helps business organization to keep a track of their sales. It also provides them with the facility to connect to any of their colleagues sitting anywhere. The ability to run programs, managing schedules, contacts can also be considered as an additional feature of tablet computers over laptops and other hand held devices. Though there has been continuous debate amid technological critics about the adaption of tablet computers by salespeople. ... The main aim of this paper is to provide a detailed analysis of the growing use of tablet computers by sales people. The paper would also contain a clear view of the various advantages and disadvantages of the tablet computers that can help salespeople to decide whether to choose tablet computers over other portable devices available in the market. Discussion The segments of tablet computers are considered to be one of the growing markets amid other electronic gadgets available in the business market. The main reason behind the growing preference of tablet computers over personal computers (PC’s) and laptops is their superiority in terms of convenience and features when compared to other hand held devices. It is worth mentioning that today’s youth also considers tablet as their first choice over mobile phones as they get larger screens and also provides additional advantages like high battery backup, full screen access and also provides the facility of calling over the laptop. The adaption of tablet PC by salesperson can be widely viewed due to their enhanced features and usability. The prime reason behind adapting tablet computers by salesperson it that, it not only provides them the advantage of carrying it anywhere but also helps in securing the data and helps business organization to keep a track of their sales. It also provides them with the facility to connect to any of their colleagues sitting anywhere. The ability to run programs, managing schedules, contacts can also be considered as an additional feature of tablet computers over laptops and other hand held devices. Though there has been continuous debate amid technological critics about the adaption of tablet computers by salespeople. Furthermore, it has been viewed that business persons

Coursework †Metamorphosis Essay Example for Free

Coursework – Metamorphosis Essay Gregor must work at a job he hates to pay off his family’s debts. The family is in debt, but he is the only one who has a job. While he wakes up early and goes on the train until late at night, his father has a leisurely life. Kafka writes, â€Å"for his father breakfast was the most important meal time in the day, which he prolonged for hours by reading various newspapers. † Instead of working, he is eating and reading newspapers for many hours. At this time, Gregor must work to support the whole family. Later, he finds out that the family has enough money to live on for a few years and maybe Gregor did not have to work so hard. Kafka writes, â€Å"with this excess money, he could have paid off more of his father’s debt to his employer and the day on which he could be rid of this position would have been a lot closer. † He is like a servant, and this is not natural for a family member. Changing into the insect is symbolic of being liberated from this life. Since he is now a bug and cannot work, he does not have to be responsible for paying off the family’s debt anymore. Instead, the family has to be responsible. Therefore, the metamorphosis is also symbolic of the family being liberated because they do not depend on Gregor anymore. They depend on themselves for support. After the change, the mother and sister must do the cooking and the family must all get jobs. Once that happens, the family quickly decides that they do not want or need Gregor anymore. They are independent and decide that Gregor is not an important part of the family. Question 2: If the story was set in contemporary America and Gregor was working two jobs, the plot would change in many ways. If he is working two jobs, it is probably because they are barely able to pay the debts. The family would already be working, they would not get new jobs so easily, and there would be no servant girl or lodgers. If Gregor had two jobs, the other family would probably be working too. This would change the plot significantly. If all the family is working, Gregor would not be the only one responsible for the debts. After the metamorphosis, the family would not have enough money. If they are already working and Gregor loses two jobs, the family would be more in debt every day. Also, in the story, the family starts working soon after Gregor is changed to an insect. However, today it is not so simple to get a job like in the story. If the family has to get new jobs, it would take a long time and their debts would be higher. In addition, there would not have been a servant in the story. Kafka writes, â€Å"The servant girl was now let go. A huge bony cleaning woman with white hair flying all over her head came in the morning and evening to do the heaviest work. The mother took care of everything else in addition to her considerable sewing work. † If Gregor was working two jobs, the family would not have a servant girl or cleaning woman. They would not have enough money and the family would do this work themselves. Also, the family gets rent from three lodgers. Today, lodgers are not so common so the family would be forced to find other ways to get money. The story does not say if the rent is a lot of money, but one of the family would have to get another job to replace the rent. Question 3: I researched â€Å"The Metamorphosis† and found two very good resources: 1. The Modern World. 16 Mar. 2007 http://www. themodernword. com/kafka/index. html. This website is a collection of information about Franz Kafka and â€Å"The Metamorphosis. † It has a biography, review of the story, and a collection of other resources like papers, research, and websites. 2. Bloom, Harold, ed. Franz Kafkas the Metamorphosis. New York: Chelsea House, 1988. This is a book with many essays about â€Å"The Metamorphosis. † I read â€Å"Metamorphosis of the Metaphor† by Stanley Corngold and â€Å"From Marx to Myth: The Structure and Function of Self-Alienation in Kafkas Metamorphosis† by Walter H. Sokel. In â€Å"From Marx to Myth: The Structure and Function of Self-Alienation in Kafkas Metamorphosis,† Walter H. Sokel writes Gregor turns into an insect because he has self-contempt. Sokel writes, â€Å"Seeing himself as vermin, and being treated as such by his business and family, the traveling salesman Gregor Samsa literally turns into vermin† (105). I agree with the author when he says vermin represents the way Gregor is treated, but I do not agree that Gregor sees himself this way. Gregor does not like his job, but must go to work to â€Å"pay off my parents’ debt† to his boss. His family uses him because he can make money and pay off the debts. His boss uses him because he can make money for the company. Kafka writes about Gregor, â€Å"He was the boss’s minion, without backbone or intelligence. † He cannot even miss work if he is sick. He certainly is treated like vermin by his family and boss. However, I do not see that Gregor thinks he is vermin until after he turns into an insect. He seems to be proud that he supports his family.

Successful Coaching Of Jose Mourinho

Successful Coaching Of Jose Mourinho Jose Mourinho is known as a no-nonsense football coach that carry out his role based his vast experience, supreme knowledge, principal values, valuable opinions and strong beliefs. His coaching philosophy is not only based during field play but also during training. His coaching philosophy during field play is as such: Football possession is not important, (Knowing himself) Winning a football match is more important than playing a nice and good football, (Knowing his strengths) Defending is a team exercise instead of individuals. (Knowing his weakness) He does not expect any egos from his players but only himself. (Knowing himself) As for football training, his coaching philosophy is as following: He emphasize that his players to put in a lot efforts during training, (Knowing his goals) He has detailed a plan, in the beginning of the season, (Knowing his obstacles) He concentrated his football training on tactical idea, this is the backbone of his whole training process. Those tactical ideas includes how to do pressing, when to do pressing, transition, ball possession, positional play, (Knowing athletes ability) Only after tactical training is done, then he will do physical, psychological aspects for the players. (Knowing his athletes weakness) In the nutshell, Jose Mourinhos philosophy of football, he likes to put up a wining team, but not a playing nice football team. Opinions about the use of coaching philosophy to the students A coach is a role model and teacher for his students. He uses his set of principles as a reference to conduct his lesson for his students. With a good philosophy, the coach is able to know himself, know his opponents and know his players, and this helps him to create a realistic, satisfying coaching roadmap for his students. The students will be rewarded in the form of improved performance and even achieve their dreams. Now, Jose Mourinho is in Real Madrid, he using his philosophy to guide Real Madrid to win the next Champion League. Is the coachs philosophy that directs the coachs everyday life thinking and actions? No. As mentioned, many coaches will agree that they will put in more efforts like time and attention to those less skilled players, but in reality only the best players will be get the most playing time, most rewards and attention. However, if there are extra resources, like more than 1 coaches in the team and more than 1 training courts. The team can be splits into small groups like what Jose Mourinho does. The head coach himself will coach the better ones, and the other coaches can train the not so good ones. Coaching Styles Jose Mourinho is more an autocratic, regimented style of coach. He likes the direct involvement with the players, deploying his football methodology, practicing the exercises, and the development of football ideas. He deploys has his own respect agenda, if any of the players dont follow them, they will be asked to leave. Example, Adrian Mutu a Chelsea player, was sacked by him in 2004 when he was found taking cocaine. He likes his players to feel pressured, he made his players to be aware that there is competition in every position in the first eleven. Jose Mourinho has recently became the head coach of Real Madrid, and immediately he has built sleeping quarters to put in at the clubs Valdabebas training facilities, he wants his players to stay at the facility instead of going home after morning and afternoon training sessions. He expects a 100% turn up for both morning and afternoon training including the star players. He had removed the areas designated for player-fan interaction. Players will be expected to train only while at the training facility. He also has insisted that Pedro Leon and Sergio Canales, players purchased from Getafe and Racing Santander respectively, not to be loaned back to their old clubs. Does the coach possess more than a coaching style No, Jose Mourinho is detrimentally rigid. My opinions on his coaching styles. Jose Mourinho is my idol. He is a ruthless, fear-inducing, respect-commanding coach. Even though, he did not become a top player, but he studies football, sports science and methodology, and on reaching a 34 age, he decided to be coach, and to be involved in football. He picked up his football techniques from a very good football instructor in Scotland, Andy Rocburgh, but more importantly he followed and understudied from the 2 legend football coaches, Bobby Robson and Louis van Gaal back in Sporting Libson. Both as manager of FC Porto and Chelsea, Jose Mourinho love to uses 4-5-1 in his football tactics. His tactics is relying on strong defensive line-ups and an good holding midfielder, while the attack, he relied on a hard-working front man and a goal-scorer in midfield. As observed, he is definitely an autocratic coach. He does not like non senses from his players. He is very focus on his job, especially on wining, he works 12 hour a day and he expects his players also. He is self confidence that close to arrogance. He lack of respect to opponent also. The Roles of a Coach The primary role of Jose Mourinho just like any other football coach is to assist his football players in developing to their full potential. He is responsible for training players by analyzing their performance, provide correction in the relevant skills and by providing encouragement, if possible to guide players in their life also. Hence, the coach needs to wear many type of hats, he need to act as instructor, assessor, friend, mentor, facilitator, chauffeur, demonstrator, adviser, supporter, fact finder, motivator, counselor, organizer, planner and the Fountain of all Knowledge. Does the coach behaviour influence the students character? How can the coach help in students character development? Communication Skills techniques in coaching The reasons the coach needs to communicate to his player because he wants to give instruction, disseminate vital information, to tell his players not to make the same mistakes, to motivate the team spirit and to give feedback to his players. Generally, there are only 2 ways that a football coach can communicate to his players on the field, either using verbal or non verbal. In the case of Jose Mourinho, he is able to speak 17 languages and knows when to which language to tell his foreign players in his team what to do. Positive feedback is also needed during coaching sessions, everyone wants to be praised and be recognized, Joes Mourinho always do it by hugging, touching his players heads if they wins the match. During training, Jose Mourinho always split his players into groups based on condition, amount of playing time, so that he can give all players in their training groups same attention. Motivation Skills Jose Mourinho is a good motivator in team-motivated environment. He always emphasize that there is only 1 common goal in the team, it is to win many tropes (extrinsic: material reforcers). All players in the team must support each other until success is achieved (intrinsic), everyone care (intrinsic) for each other until success is achieved. For example, when the team wins a match, he will walk towards the pitch to congratulate all his players, by the act of hugging, touching their heads (extrinsic: social reinforcers). Jose Mourinho said that he likes players who love to win and he wants them to win not in 90 minutes but every day, training session and moment in their lives. Motivation strategies Jose Mourinho, the Special One brought in the togetherness and team spirit for the team under his charge. Below are some the strategies used by him: To develop a healthy environment by promoting humor and entertainment football sessions, e.g he used small-sided games to develop technical, tactical and fitness elements. To share the cup of tea with all team members. Jose Mourinho always seems moving from club to club, and undertakes new teams. When he tells the new team about his past wining trophies experiences of how to beat all obstacles and tough times to reach the final. This will motivate the new team like Real Madrid, and help build an even stronger team. To avoid any kind of disagreement and miscommunication as these can lead hamper the feeling of oneness. As reported, Jose Mourinho hates to speak about players individually, he only reports about team performance.

Pest Analysis of McDonalds in Malaysia

Pest Analysis of McDonalds in Malaysia PEST stands for Political, Economic, Sociological, and Technological. PEST analysis is an effective tool to audit companys environmental influences which can be used for strategic decision-making. The PEST analysis is a very useful tool to understand and analyze market growth, market position, future potentials and direction for a particular business so A PEST analysis can be termed as a business measurement tool. PEST analysis summarizes the external environment in which the business is planning to operate or already operating. However, an effective follow up and proper response plan is required to ensure optimum use of PEST analysis (Luthans Doh, 2008). This report aims to discuss PEST analysis of McDonalds in Malaysia. The report is divided into five parts. First part is introduction where the basic theory and application of PEST analysis is discussed. The next part is detail explanation of four components namely Political, Economic, Sociological, and Technological of PEST analy sis. The third part of this report highlights PEST analysis for McDonalds in Malaysia. The final part of this report discusses conclusion and summary analysis. 2.0 Background of the Company: 2.1 Introduction: McDonalds is a popular brand name in fast food industry. McDonald has 34,000 restaurants in 119 countries serving roughly 69 million people every day. Worldwide around 80% of McDonalds restaurants are franchised and generally owned and operated by independent local entrepreneurs (McDonalds, 2013). McDonalds annual report 2012 shows that worldwide the company generated operating income of 8.5 billion in 2011 with 9.7% growth over 2010 (McDonalds Corporation, 2012). McDonalds Malaysia opened its first store in 1982 in Kuala Lumpur. According to the figure of 2009, McDonalds Malaysia manages 194 restaurants nationwide catering the need of 10 million customers monthly. McDonalds Malaysia is growing significantly with 15-20 restaurants per annum. In order to manage day to day operations McDonalds Malaysia has around 8,000 local employees who are working in different outlets and near about 150 personnel are working in the headquarter (McDonalds Malaysia, 2009). 2.2 Company History: Ray Kroc the founder of McDonalds corporation started his business with Richard and Maurice McDonald by buying franchising right in 1950s to operate McDonalds restaurants in the USA. In 1961, he bought complete shares of the company from the McDonald brothers. In the last quarter of 1980, Golden Arches Restaurants Sdn. Berhad. (GARSB) received permission to bring McDonalds in Malaysia. The first McDonalds opened on 29 April 1982 at Bukit Bintang, (McDonalds Malaysia, 2009). 2.3 Products are Services: McDonalds offer wide variety of fast food and beverages including burger, nugget, chicken fries, French fries, set meals etc. Moreover the restaurant serves different type of coffee, carbonated beverages, ice creams and flavored drinks (McDonalds Malaysia, 2013). McDonalds continuously does research and update its menu to keep the market share. Cost leadership and price differentiation is McDonalds one of the key marketing strategies (McDonalds Corporation, 2008). 3.0 Introduction to PEST analysis: It is mentioned earlier that PEST stands for Political, Economic, Social, and Technological. This tool is used to evaluate the market for both new entrants and existing business units. This analysis tools are a framework for assessing a situation. It can be applied to evaluate a position or a strategy, company direction, new marketing proposition or even a new idea. Thorough analysis of the environment in which the firm functions empowers a company to take advantages of opportunities as well as minimize the threats. PEST framework often encourages proactive thinking and brainstorming rather than relying on instinct (Luthans Doh, 2008). 3.1 Political: Political factors often refers government intervention, entry barriers, tax or tariff structures which are designed to benefit Government or the citizen. The political environment has huge influence on the business. Political stability, regulations, spending power of consumers often shapes the profitability of a business (Oxbridge Graduates, 2013). There are certain factors which influence political situation of a country which includes ecological or environmental issues, current legislation home market, future legislation, international legislation, regulatory bodies and processes, government policies, government term and change, trading policies, funding, grants and initiatives, home market lobbying/pressure groups, international pressure groups, wars and conflicts (businessballs.com, 2010). 3.2 Economic: Economic factors comprise many factors e.g. stability, income status, income parity, purchasing powers, unemployment rates, exchange rate, interest rates etc. there is no doubt that these factors plays a vital role in decision making for an industry or a business (Oxbridge Graduates, 2013). It is necessary to consider certain factors while analysis economic situation of a country, for example, home economy situation, home economy trends, overseas economies and trends, general taxation issues, taxation specific to product or services, seasonality and weather issues, market and trade cycles, specific industry factors, market routes and distribution trends, customer or end-user drivers, interest and exchange rates, international trade and monetary issues (www.businessballs.com, 2010). 3.3 Socio-Cultural: Socio- cultural factors refer to the pattern and trend of demand which generally occur due to the nationality, religious or culture. As for food industry it is evident that local taste and preferences will decide the acceptance of particular food products. In order to survive and grow local likings and disliking should be followed. So a thorough understanding about local market is required to ensure successful business (Oxbridge Graduates, 2013). The cultural and social influences on a particular business vary country-wise. When a Socio-Cultural situation is analyzed lifestyle trends, demographics, consumer attitudes and opinions, media views, law changes affecting social factors, brand, company, technology image, consumer buying patterns, fashion and role models, major events and influences, buying access and trends, ethnic or religious factors, advertising and publicity, ethical issues should be considered (www.businessballs.com, 2010). 3.4 Technology: Technological factors shape the production output and efficacy of the plant and operation. As for the food industry it is seen that employment of technology brought fruitful results in the food industry (Oxbridge Graduates, 2013). Technology is a critical success factor to achieve and sustain competitive advantages. Moreover, this is a key driving force of globalization. An analyst considers competing technology development, research funding, associated or dependent technologies, replacement technology or solutions, maturity of technology, manufacturing maturity and capacity, information and communications, consumer buying mechanisms or technology, technology legislation, innovation potential, technology access, licensing, patents, intellectual property issues, global communications while evaluating technological situation (www.businessballs.com, 2010). 4.0 PEST analysis for McDonalds in Malaysia: 4.1 Political Components: Malaysia is a multicultural country with three major ethnic groups namely Malay, Chinese and Indian. Moreover, the country has few indigenous groups who live mostly in East Malaysia. Evidently, these groups live in peace without any major clashes (Rex, 1991). Moreover, this country is a popular tourist destination. According to Malaysian Tourism Board in 2012 around 25.03 million international tourists visited Malaysia and on an average 64,000 tourists landed in Malaysia everyday which is 7.2% higher than the inbound tourist in 2011 (MTPB, 2013). The apparent political stability is one of the main attracting factors for foreign as well as local investors. Pro- business government mentality, stable political situation and a good legal system shows attractive prospects for investors. Moreover, in order to attract large investments, the government offered greater portion of foreign equity ownership in businesses and enterprises under the Promotion of Investment Act (PIA), 1986. Market-o riented economy and an educated multilingual workforce made Malaysia as one of the popular destinations for investment (Tsen, 2005). So, McDonalds has tremendous opportunities in Malaysia and the company can capitalize this harmonious political situation for further expansion. 4.2 Economy Factors: The global financial crisis has affected the whole world at the end of 2007 resulting sharp decline in global trade and it also increased the unemployment rate in many countries. The good thing is Malaysia was not affected severely by the recession like its neighboring country Singapore. One reason could be Malaysia learnt its lessons from the previous financial crisis which occurred in 1997. Moreover, McDonalds dealt the problem efficiently by reducing product price and offering value meals. This is how McDonalds managed to maintain sales figures and performed better compared to its competitors. Currently, Malaysian economy is growing at a pace of 4.5-5% per annum. The rate of Malaysian Ringgit against US Dollar was steady at average 2.95 (Zheng, 2009). The . 4.3 Socio- Cultural Factors: As it was mentioned earlier that Malaysia is a multi- religion and multicultural country. Islam is considered official religion in Malaysia and more than 50% of population is follower of Islam in Malaysia. So naturally the concept of Halal plays important role in Malaysian food industry (Muhammad, Isa, Kifli, 2009). To respect the religious sentiment of Muslims and to comply government rules McDonalds in Malaysia does not serve any pork item. Moreover, McDonalds follow strict Halal compliances while buying the main ingredients e.g. chicken or meat from suppliers. Beef is one of the popular food items for many Malaysians especially Muslims, that is why data shows that in Malaysia the bestselling McDonalds product is Big Mac (McDonalds Malaysia, 2009). Recent trend shows that the Millennial generation in Malaysia are becoming health concern. 4.4 Technological factors: Malaysians are becoming more and more technology oriented. Social networking sites are playing vital role in every aspect of Malaysian peoples lives especially the younger generations are heavy users of internet and other IT gadgets (Miniwatts Marketing Group, 2010). McDonalds Malaysia has its own website and also it has strong Facebook and other online social networking presence. It disseminates corporate information as well as various promotions and events through these channels (McDonalds Malaysia, 2013). However, it certainly lacks in some aspects where the other competitors are way ahead. For example, McDonalds did not have internet ordering system until recently. Moreover, the delivery service in inadequate and often does not cover most of Kuala Lumpur let alone other cities (McDonalds Malaysia, 2013). In order to sustain in todays competitive business world McDonalds should design appropriate strategies to response changing need of the customers. 5.0 Conclusion: A PEST analysis is an excellent tool to understand the external affecting factors of business. It enables the company to capitalize the opportunities as well as minimize the potential threats. This report has outlined a PEST analysis for McDonalds Malaysia. However, it should be remembered that todays business world is very dynamic, demanding and ever changing so in order to ensure maximum success, the factors should be analyzed and updated on a regular basis (Luthans Doh, 2008). 5.1 Summary of the PEST Analysis: The summary of PEST analysis McDonalds Malaysia is mentioned below: Political: Despite of being a multi-cultural society, Malaysia enjoys a peaceful environment. Moreover the government is trying to encourage investments in various ways so McDonalds can use this opportunity for further expansion. Economic: Though Malaysia was not badly affected by 2007 world recession but still McDonalds was prepared and had taken timely measures. The overall economic improvement of Malaysian opens new opportunities for McDonalds. Socio- Cultural Factors: McDonalds has managed to blend with Malaysian culture nicely and understood local preferences very well, as a result McDonalds is a household name in Malaysia. However, recent health consciousness among Malaysians poses a threat for McDonalds. However, McDonalds can capitalize this change in consumer behavior by offering healthier foods e.g. organic foods, salads etc. Technology: McDonalds understands the need of technology applications. It has strong presence in online social medias e.g. Facebook. The communication patterns and preferences are changing, McDonalds should respond to these changes by innovation.