Long Term Financing of Companies Essay Example | Topics and Well Written Essays - 1500 words

Long Term Financing of Companies - Essay Example Financing is necessary for a company to continue its business or improve the business. Mainly financing is necessary for the operations, continuing the day to day activities or expansion of a company. Financing may be of short term or long term. Short term financing is necessary for meeting the need of working capital when long term financing is necessary for a company mainly for expansion of its. If the firm wants to expand its business area then they have to plan for a long term period, because the expansion of a company is not a matter of some days. Then the company needs the long term financing. Usually a company obtains various sources for getting long term financing as there are various sources available in the market for long term financing. The cost of capital is different for the different sources. A company when obtain for different sources of financing then they found for the most suitable sources for financing from the available bunch. This paper is an attempt for analyzi ng the various sources of long term financing and find the type of long term financing is obtain by different sectors. Long Term Financing Sources and its Advantages and Disadvantages Long term sources of financing are needed for a company for getting the needed finance for generally over a year. Long term financing is necessary for expansion of the business.... But the opportunity cost of the source is much as the factor of paying the dividends to the shareholders is there. The retained earnings are also fluctuating as it depend on the company’s profit after tax, so a company can’t depend only on this source for long term financing. All types of companies use this source of financing. Depreciation Charges: The depreciation charges of a company is charged on the assets, but there is no cash outflow for the company but depreciation charge is calculated for the calculation of a company’s profit. As the depreciation save the tax charge on income so the tax savings can be invested again by the company for generating return (Shim and Siegel, 1999, p.198). The cost of capital of the source depreciation charged is minimal which is an advantage for the company but the amount generated for reinvestment is not so much, it is even less than the retained earnings generally. Al types of companies use this internal source of financing . Equity Shares: The equity shares issued by a company in the stock exchange are a large source of investing. The companies issue shares through an underwriter to the market. The investors who invest in the company are thereby become the owner of the company (Hamer and Hamer, 2008, p.4). The company management can generate finance by issuing the stock as an Initial Public Offering (IPO) and Follow on Private Offering (FPO). The advantages to going public and generating the capital from the market is that the cost of capital is not much for using the sources (Draho, 2004, p.3). The companies have to pay dividend to the shareholders of the company when the shares are ordinary or in the form of preference shares. The companies have to provide dividends

Christians in the Empire Essay Example | Topics and Well Written Essays - 1000 words

Christians in the Empire - Essay Example Hence it is easy to imagine what a multitude of people can be reformed if an opportunity for repentance is afforded." The Roman Empire has also forbidden any secret meetings, and considered them to be political associations against the emperor as Pliny clearly states: "in accordance with your instructions, I had forbidden political associations." Christians were treated like treators, like conspirators, to the state and the established pagan religion. Pagans considered Christians to be a threat to their own gods, and they considered that misfortunes or natural disasters came from the Christians' God. Pliny didn't know how to prosecute the Christians. For him they were superstitious people, just ignorant people. So Pliny states the following as he didn't know what to do: "I have never participated in trials of Christians. I therefore do not know what offenses it is the practice to punish or investigate, and to what event. . ." Trajan tells him that he has treated the matter in the right way when he said: "You observed proper procedure, my dear Pliny, in sifting the cases of those who had been denounced to you as Christians." There is some uncertainty in Trajan's mind when he said: "For it is not possible to lay down any general rule to serve as a kind of fixed standard." But Trajan is positive about not persecuting the Christians. So he said: "They are not to be sought out". This policy makes it easier for Christians to live in the Empire as they were not going to be chased openly. It is also clear in Trajan's words that the anonymous accusations are not going to be taken into account. He said: "But anonymously posted accusations ought to have no place in any prosecution. For this is both a dangerous kind of precedent and out of keeping with [the spirit of] our age." This policy by the emperor eased matters for Christians as they were not going to be persecuted openly, but it was not a perfect solution as they were not considered to be normal citizens in the empire. They were still forbidden. 3. How does Tertullian justify the Christians refusal to worship the emperor Tertullian gives powerful reason for not worshipping the Emperor based on the nature of the Christians conviction about the true God. He said very convincingly: "For we invoke the eternal God, the true God, the living God for the safety of the emperors. . . ." Tertullian states also that Christians do pray in favor of all the emperors with the following words: "Looking up to heaven, the Christians - with hands outspread, because innocent, with head bare because we do not blush, yes! And without a prompter because we pray from the heart - are ever praying for all the emperors. We pray for a fortunate life for them, a secure rule, a safe house, brave armies, a faithful senate, a virtuous

How Do Privacy Rights Extend To Sexual Orientation Essay

How Do Privacy Rights Extend To Sexual Orientation - Essay Example The different laws that have been enacted in the United States of America and the roles that have been played by the Supreme Court and the political parties have to be taken into account when one is analyzing the reasons for the marginalization of the homosexual community and the reluctance that society has had in opening up to this community. In certain cases, the Supreme Court has refused to accord the same status to homosexual couples as heterosexual couples (Government by the People). This automatically assigns to these couples lower status that would induce them to conceal their sexual orientation a secret. In a lot of cases, people fail to recognize their own orientations because of the social stigma that is caused by judgments that place them on a lower level than their ‘straight’ counterparts. In these cases, there is a covert intrusion into the lives of these people that the state effects. While invading the privacy of these groups by marking locations where the ir sexuality can be expressed in terms of the very geographical boundaries within which people of a certain sexual orientation are allowed to make their sexual choices (the rights that homosexual couples have varies from one state to the other), the state also drags their problems into the public domain, thus making them face the stigma of a homophobic society. There are also cases when individuals of a homosexual orientation are not allowed to participate in certain associations which consist of only members of their own sex (Government by the People). This limits the choices that people of this community have and makes them make decisions that affect their privacy greatly.

Wearing on Her Nerves by Brown and Ellerton Case Study

Wearing on Her Nerves by Brown and Ellerton - Case Study Example The following essay is about a case study that examines Kathy’s Multiple Sclerosis condition. 1. The nervous system consists of sensory systems, which are responsible for perception of sensory information. Receptors and neural pathways that constitute the sensory system effect sensory perception. The human body is a connection of sensory receptors throughout the body that are responsible for message sending to the brain. For example, the skin contains sensory receptors responsible for capturing messages. The messages are sent to the brain through the neural path to the brain, which then triggers the appropriate reflex action. 2. The musculoskeletal system gives organisms, including humans, the ability to move. This system is responsible for support, stability and movement of the body. The motor neuron of the skeletal system is responsible for the skeletal muscle movement. The motor neuron initiates signals to the muscles using the somatic nervous system. 3. A motor unit is a constituent of the motor neuron. It is responsible for the twitching and contraction of the muscles. The motor unit consists of four components. These include the motor neuron in the brain, its axion, peripheral nerve and the neuromuscular junction. 4. The contraction of muscles helps the body of a human being to stand up. The thigh muscles, which are initiated by the skeletal muscles system, need to contract. This is a joint mechanism between the muscle fibers and the sensory nerve system. The actin and myosin filaments receive signals from the sensory cells that enable the muscles to contract hence the ability to stand up. 5. Skeletal muscle fibers are enormous and multinucleated. Each muscle contains numerous nuclei in the cell membrane. During growth and development, myoblasts fuse together to form skeletal muscle fibers. The sarcolemma is the cell membrane of the muscles, and sarcoplasm or cytoplasm of the muscle fiber is surrounded by the cell membrane.

How Do Privacy Rights Extend To Sexual Orientation Essay

How Do Privacy Rights Extend To Sexual Orientation - Essay Example The different laws that have been enacted in the United States of America and the roles that have been played by the Supreme Court and the political parties have to be taken into account when one is analyzing the reasons for the marginalization of the homosexual community and the reluctance that society has had in opening up to this community. In certain cases, the Supreme Court has refused to accord the same status to homosexual couples as heterosexual couples (Government by the People). This automatically assigns to these couples lower status that would induce them to conceal their sexual orientation a secret. In a lot of cases, people fail to recognize their own orientations because of the social stigma that is caused by judgments that place them on a lower level than their ‘straight’ counterparts. In these cases, there is a covert intrusion into the lives of these people that the state effects. While invading the privacy of these groups by marking locations where the ir sexuality can be expressed in terms of the very geographical boundaries within which people of a certain sexual orientation are allowed to make their sexual choices (the rights that homosexual couples have varies from one state to the other), the state also drags their problems into the public domain, thus making them face the stigma of a homophobic society. There are also cases when individuals of a homosexual orientation are not allowed to participate in certain associations which consist of only members of their own sex (Government by the People). This limits the choices that people of this community have and makes them make decisions that affect their privacy greatly.

Agency Theory and Corporate Governance Problem Essay

Agency Theory and Corporate Governance Problem - Essay Example It is evidently clear from the discussion that the Agency theory conceptualizes the relationship between the firm managers and shareholders as a â€Å"nexus of contract† that is bound to result to conflict due to the different interests of each group. The proposal of this theory is that firms should have independent board structures and that the equity-based compensation for top executives should be applied to curb the aggressive behavior of the management. While this theory suffers a number of weaknesses by assuming perfect organizational structures, it provides a possible approach to a solution of the corporate governance problem. On this ground, agency theory, to a great extent provides workable solutions that can harmonize the interests of both the managers and company stakeholders. Corporate structures are characterized by a separation between the owners and the management of an organization. The owners of an organization appoint managers who are better versed with manage ment knowledge to run their business for payment. The expectation of the shareholders is that the managers run the organizations to the best interests of the shareholders at all times. However, there is the risk that the management may put their goals first before those of the firm, which would be contradictory to their duties. As expected, the managers are the information bearers and have for the power to influence the firm performance and profit through their strategic initiatives. From a different angle, the shareholders have little information and hence act in good faith expecting that the management will pursue the firm interests. However, it is hard for them to establish whether the management influenced the outcomes of their firms through economic manipulation. Ultimately, the shareholders wish to submit the business risks to the experts with the sole aim of maximizing the share values for their own benefits. Contrary, the manager’s goals may be against the shareholder 's interest as they seek to maximize the benefits they accrue from the organization.

Pricing Strategy Essay Example for Free

Pricing Strategy Essay Pricing refers to the process of setting a price for a product or service and more than any other element of your marketing mix, will have the biggest impact on the amount of profit you make. Developing an effective pricing strategy is a critical element of marketing because pricing is the only element of the marketing mix that creates sales revenue; the other elements create costs and sales volume. An effective pricing strategy will help you: meet your profit objectives meet or beat your competitors’ prices retain or increase your market share match the image or reputation of your business, product or service match your offer to market demand To arrive at a price for your product or service you’ll need to: Establish what it costs to offer and deliver your products. Without this knowledge, you’ll have no idea whether your prices are sufficient to not only cover all your costs, but to return a profit. Few businesses have failed because their prices are too high, however, many have folded because their prices werent high enough to cover costs or generate a profit. Conduct market research to establish what price your competitors are charging and what is the optimum price customers would be willing to pay for your product. Your price will inevitably fall somewhere between that which is too low to produce a profit and that which is too high to generate any demand. The pricing structure A pricing structure consists of a base (or list) price and a variety of price modifiers which depend on the type of product you are selling and the type of market in which you operate. The most common price modifiers are outlined below: Quantity discount – an incentive to buy more. Settlement discount – an incentive to pay quickly. Promotional discount – a discount for a specific period of time. Seasonal discount – an incentive to clear seasonally sensitive stock. Cash rebate – an after-sale incentive linked to a specified target. Ranging allowance – paid to a reseller in return for them stocking your product. Promotional allowance – for participation in a promotional campaign. Delivery fee – an amount you charge for delivering the product. Credit card fee – an amount you charge on credit card purchases. At the end of the day, your objective should be to achieve the best possible price for your products or services taking into account: The value they provide for your customers – ie: how they satisfy their needs and wants in terms of features, benefits, utility value and prestige. Your cost structure – what is your break-even point and how much profit do you want to make? Go to the Financial section for more information on calculating your break-even point and determining profit targets. The competitive environment – what do your competitors charge for similar products and services? Your competitive advantage – do the products or services provide advantages that warrant a price premium? The economic and market environment – what is the level of demand in your industry? A business can use a variety of pricing strategies when selling a product or service. The Price can be set to maximize profitability for each unit sold or from the market overall. It can be used to defend an existing market from new entrants, to increase market share within a market or to enter a new market. Businesses may benefit from lowering or raising prices, depending on the needs and behaviors of customers and clients in the particular market. Finding the right pricing strategy is an important element in running a successful business.[1] Method of pricing in which all costs are recovered.The price of the product includes the variable cost of each item plus a proportionate amount of the fixed costs. Contribution margin-based pricing[edit] Main article: Contribution margin-based pricing Contribution margin-based pricing maximizes the profit derived from an  individual product, based on the difference between the products price and variable costs (the products contribution margin per unit), and on one’s assumptions regarding the relationship between the product’s price and the number of units that can be sold at that price. The products contribution to total firm profit (i.e. to operating income) is maximized when a price is chosen that maximizes the following: (contribution margin per unit) X (number of units sold). In cost-plus pricing, a company first determines its break-even price for the product. This is done by calculating all the costs involved in the production, marketing and distribution of the product. Then a markup is set for each unit, based on the profit the company needs to make, its sales objectives and the price it believes customers will pay. For example, if the company needs a 15 percent profit margin and the break-even price is $2.59, the price will be set at $2.98 ($2.59 x 1.15).[2] Creaming or skimming[edit] In most skimming, goods are sold at higher prices so that fewer sales are needed to break even. Selling a product at a high price, sacrificing high sales to gain a high profit is therefore skimming the market. Skimming is usually employed to reimburse the cost of investment of the original research into the product: commonly used in electronic markets when a new range, such as DVD players, are firstly dispatched into the market at a high price. This strategy is often used to target early adopters of a product or service. Early adopters generally have a relatively lower price-sensitivity this can be attributed to: their need for the product outweighing their need to economise; a greater understanding of the products value; or simply having a higher disposable income. It will maximize profits for the better of the company. This strategy is employed only for a limited duration to recover most of the investment made to build the product. To gain further market share, a seller must use other pricing tactics such as economy or penetration. This method can have some setbacks as it could leave the product at a high price against the competition.[3] Decoy pricing[edit] Method of pricing where the seller offers at least three products, and where two of them have a similar or equal price. The two products with the similar prices should be the most expensive ones, and one of the two should be less attractive than the other. This strategy will make people compare the options with similar prices, and as a result sales of the most attractive choice will increase.[4] Freemium[edit] Main article: Freemium Freemium is a business model that works by offering a product or service free of charge (typically digital offerings such as software, content, games, web services or other) while charging a premium for advanced features, functionality, or related products and services. The word freemium is a portmanteau combining the two aspects of the business model: free and premium. It has become a highly popular model, with notable success. High-low pricing[edit] Method of pricing for an organization where the goods or services offered by the organization are regularly priced higher than competitors, but through promotions, advertisements, and or coupons, lower prices are offered on key items. The lower promotional prices are designed to bring customers to the organization where the customer is offered the promotional product as well as the regular higher priced products.[5] Limit pricing[edit] Main article: Limit price A limit price is the price set by a monopolist to discourage economic entry into a market, and is illegal in many countries. The limit price is the price that the entrant would face upon entering as long as the incumbent firm did not decrease output. The limit price is often lower than the average cost of production or just low enough to make entering not profitable. The quantity produced by the incumbent firm to act as a deterrent to entry is usually larger than would be optimal for a monopolist,  but might still produce higher economic profits than would be earned under perfect competition. The problem with limit pricing as a strategy is that once the entrant has entered the market, the quantity used as a threat to deter entry is no longer the incumbent firms best response. This means that for limit pricing to be an effective deterrent to entry, the threat must in some way be made credible. A way to achieve this is for the incumbent firm to constrain itself to produce a certain quantity whether entry occurs or not. An example of this would be if the firm signed a union contract to employ a certain (high) level of labor for a long period of time. In this strategy price of the product becomes the limit according to budget. Loss leader[edit] Main article: Loss leader A loss leader or leader is a product sold at a low price (i.e. at cost or below cost) to stimulate other profitable sales. This would help the companies to expand its market share as a whole. Marginal-cost pricing[edit] In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output. By this policy, a producer charges, for each product unit sold, only the addition to total cost resulting from materials and direct labor. Businesses often set prices close to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00 and a normal selling price is $2.00, the firm selling the item might wish to lower the price to $1.10 if demand has waned. The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all. Market-oriented pricing[edit] Setting a price based upon analysis and research compiled from the target market. This means that marketers will set prices depending on the results from the research. For instance if the competitors are pricing their products at a lower price, then its up to them to either price their goods  at an above price or below, depending on what the company wants to achieve. Odd pricing[edit] In this type of pricing, the seller tends to fix a price whose last digits are odd numbers. This is done so as to give the buyers/consumers no gap for bargaining as the prices seem to be less and yet in an actual sense are too high, and takes advantage of human psychology. A good example of this can be noticed in most supermarkets where instead of pricing at $10, it would be written as $9.99. This pricing policy is common in economies using the free market policy. Pay what you want[edit] Main article: Pay what you want Pay what you want is a pricing system where buyers pay any desired amount for a given commodity, sometimes including zero. In some cases, a minimum (floor) price may be set, and/or a suggested price may be indicated as guidance for the buyer. The buyer can also select an amount higher than the standard price for the commodity. Giving buyers the freedom to pay what they want may seem to not make much sense for a seller, but in some situations it can be very successful. While most uses of pay what you want have been at the margins of the economy, or for special promotions, there are emerging efforts to expand its utility to broader and more regular use. Penetration pricing[edit] Main article: Penetration pricing Penetration pricing includes setting the price low with the goals of attracting customers and gaining market share. The price will be raised later once this market share is gained.[6] Predatory pricing[edit] Main article: Predatory pricing Predatory pricing, also known as aggressive pricing (also known as undercutting), intended to drive out competitors from a market. It is  illegal in some countries. Premium decoy pricing[edit] Method of pricing where an organization artificially sets one product price high, in order to boost sales of a lower priced product. Premium pricing[edit] Main article: Premium pricing Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. The practice is intended to exploit the (not necessarily justifiable) tendency for buyers to assume that expensive items enjoy an exceptional reputation, are more reliable or desirable, or represent exceptional quality and distinction. Price discrimination[edit] Main article: Price discrimination Price discrimination is the practice of setting a different price for the same product in different segments to the market. For example, this can be for different classes, such as ages, or for different opening times. Price leadership[edit] Main article: Price leadership An observation made of oligopolistic business behavior in which one company, usually the dominant competitor among several, leads the way in determining prices, the others soon following. The context is a state of limited competition, in which a market is shared by a small number of producers or sellers. Psychological pricing[edit] Main article: Psychological pricing Pricing designed to have a positive psychological impact. For example, selling a product at $3.95 or $3.99, rather than $4.00. There are certain price points where people are willing to buy a product. If the price of a product is $100 and the company prices it as $99, then it is called  psychological pricing. In most of the consumers mind $99 is psychologically ‘less’ than $100. A minor distinction in pricing can make a big difference in sales. The company that succeeds in finding psychological price points can improve sales and maximize revenue. Target pricing business[edit] Pricing method whereby the selling price of a product is calculated to produce a particular rate of return on investment for a specific volume of production. The target pricing method is used most often by public utilities, like electric and gas companies, and companies whose capital investment is high, like automobile manufacturers. Target pricing is not useful for companies whose capital investment is low because, according to this formula, the selling price will be understated. Also the target pricing method is not keyed to the demand for the product, and if the entire volume is not sold, a company might sustain an overall budgetary loss on the product. Time-based pricing[edit] Main article: Time-based pricing A flexible pricing mechanism made possible by advances in information technology, and employed mostly by Internet based companies. By responding to market fluctuations or large amounts of data gathered from customers ranging from where they live to what they buy to how much they have spent on past purchases dynamic pricing allows online companies to adjust the prices of identical goods to correspond to a customer’s willingness to pay. The airline industry is often cited as a dynamic pricing success story. In fact, it employs the technique so artfully that most of the passengers on any given airplane have paid different ticket prices for the same flight.[7] Value-based pricing[edit] Main article: Value-based pricing Pricing a product based on the value the product has for the customer and not on its costs of production or any other factor. This pricing strategy is frequently used where the value to the customer is many times the cost of  producing the item or service. For instance, the cost of producing a software CD is about the same independent of the software on it, but the prices vary with the perceived value the customers are expected to have. The perceived value will depend on the alternatives open to the customer. In business these alternatives are using competitors software, using a manual work around, or not doing an activity. In order to employ value-based pricing you have to know your customers business, his business costs, and his perceived alternatives.It is also known as Perceived-value pricing. Other pricing approaches[edit] Other pricing strategies include Yield Management, Congestion pricing and Variable pricing. Nine laws of price sensitivity and consumer psychology[edit] In their book, The Strategy and Tactics of Pricing, Thomas Nagle and Reed Holden outline nine laws or factors that influence how a consumer perceives a given price and how price-sensitive they are likely to be with respect to different purchase decisions. [8][9] They are: Reference Price Effect – buyer’s price sensitivity for a given product increases the higher the product’s price relative to perceived alternatives. Perceived alternatives can vary by buyer segment, by occasion, and other factors. Difficult Comparison Effect – buyers are less sensitive to the price of a known or more reputable product when they have difficulty comparing it to potential alternatives. Switching Costs Effect – the higher the product-specific investment a buyer must make to switch suppliers, the less price sensitive that buyer is when choosing between alternatives. Price-Quality Effect – buyers are less sensitive to price the more that higher prices signal higher quality. Products for which this effect is particularly relevant include: image products, exclusive products, and products with minimal cues for quality. Expenditure Effect – buyers are more price-sensitive when the expense accounts for a large percentage of buyers ’ available income or budget. End-Benefit Effect – the effect refers to the  relationship a given purchase has to a larger overall benefit, and is divided into two parts: Derived demand: The more sensitive buyers are to the price of the end benefit, the more sensitive they will be to the prices of those products that contribute to that benefit. Price proportion cost: The price proportion cost refers to the percent of the total cost of the end benefit accounted for by a given component that helps to produce the end benefit (e.g., think CPU and PCs). The smaller the given components share of the total cost of the end benefit, the less sensitive buyers will be to the components price. Shared-cost Effect – the smaller the portion of the purchase price buyers must pay for themselves, the less price sensitive they will be. Fairness Effect – buyers are more sensitive to the price of a product when the price is outside the range they perceive as â€Å"fair† or â€Å"reasonable† given the purchase context. The Framing Effect – buyers are more price sensitive when they perceive the price as a loss rather than a forgone gain, and they have greater price sensitivity when the price is paid separately rather than as part of a bundle.