Capital Market Essays Examples Essays (Examples)

Capital Market

Men who marry career women are more likely to get divorced, is that true or can both men and women work full time and still have a happy marriage and family?

Men who marry career women have a higher chance of having a happy marriage and family. This is because most career women are likely to be educated and are more open to the opinions of others including their husband. So, the possibility of misunderstanding is greatly reduced when it comes to career women.

Career women marry at a later age and this means they are a lot more mature to handle a relationship well. This gives rise to a high quality marriage with little chance for a break-up. Also, they are keen to start a family at the earliest because of their age and this gives rise to a happy family. Another reason for men to marry…

Banking Development

One of the steps in determining the best countries to target for overseas subsidiaries is by examining different countries for the characteristics of their banking and capital markets. There are four main categories of characteristics that will be the focal point of this report, for each of the banking and capital markets. The four main characteristics are the access, the depth, the efficiency and the stability. For a company seeking a country in which to enter, each of these has particular relevance for both the size of the market and the potential of the market. Access reflects the market penetration for banking and finance, which can be seen as a proxy of sorts for market potential. Depth is another factor that can highlight the size and potential of a given market.

The efficiency reflects whether there are synergistic opportunities. Remember that companies making acquisitions will always pay an…

Inappropriate exchange rates can spell disaster. A fixed exchange rate is ideal. There are sharp mismatches in the financial and the banking sectors of the countries. The national debts of countries have also become subjects of alarm and controversy. "The global economic upturn seems to be gathering pace -- it certainly is in Asia, now the world's fastest growing region. A period of economic growth offers a chance for governments to get their fiscal affairs in order, to reduce their debts burdens and so reduce the risk of pro-cyclical fiscal tightening later." (Krueger, 2003) the capital flow must be regulated but not restricted. There must be a level playing field for all countries. All these are absent in the modern international capital market. (Krueger, 2003)

International Capital Market - Analysis

The modern market is in crisis and is volatile. And after 1990 many nations have removed the restrictions on capital…

Risks to the Global Capital Market

"Beware the next financial blind spot." Summary

Gillian Tett's article exemplifies various issues and risks involving financing in and out of the bank. The world marketing systems and non-bank entities are taking shape because it happened during the managerial times of Mr. Paul Tucker. Tucker expresses the point of need for many financiers to understand and consider the effects brought by shadowy banks, most of which are referred to as "Russian doll finance," or "Vehicular finance." According to Tucker, these are the financial entities in the market, which are likely to cause systemic entries. When Tucker's comments are understood, Tett depicts the call for financial stability board to issue a financial report. This sought to look further on the issue of "oversight of the shadow banking world," as it had accrued a $67th assets.

According to the board, the financial regulators have taken too…

Hypothesis

Within the context of the current study, there are several proposed hypotheses. First, the study will aim to prove that the private equity market in Austria is underdeveloped. Second, this is caused primarily a cultural phenomenon based on attitudes towards the capital market, especially private equity. Additionally, it looks at how the SME segment is important within the Austrian economy and that a boost in private equity would then be beneficial to this market.

Methods and Procedures

The context of the study will be broken into two main parts. The first will be an empirical study of the capital market development in Austria. This will provide exploration of the key players and their role in the Austrian capital market with references to International comparison and benchmark. This will include a thorough literature review regarding the SME structure in Austria, including information on what the typical ownership structure is.

The…

Please develop capital market expectations, over the forecast horizon of the next 2 to 5 years for the following USA variables:1. Real GDP a. Most Recent Observation - Real GDP growth last year was down 3.5%b. Central Tendency of Forecast The central tendency of the forecast is 2.5%c. Range of Forecast The range of the forecast is between 2% and 4%d. Longer Run Forecast The long run forecast is 2%e. Methodology The methodology for this forecast is based heavily on historical context. Here population growth average around .8% a year. In this instance we will round up to 1% for ease of calculation. In addition, total factor productivity gains typically amount to 1% to 1.5% per year. Therefore, on a real basis, accounting for population and productivity gains, GDP should rise around 2% to 2.5% per year (Blanchard, 1997)2. Unemployment ratea. Most Recent Observation The…

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What differentiates our services is our passion for…

The capital markets play a critical role in allocating capital between savers and investors. It is through this function that society benefits by providing capital to new and innovative companies who require it. In exchange from money provided by capital providers these companies in turn share their profits with shareholders ultimately enhancing the overall wealth of society. Underpinning the performance of the capital markets are oversight committees which ensure the ethical integrity of market participants. These oversight committees attempt to ensure a level playing field that allows a free and fair exchange of information and trading activity. It is here were the public function derived from this activity differs from country to country. This gap is particularly apparent when comparing the United States with China. Although both services attempt to monitor and instill confidence in the functioning of the capital markets, they differ in their overall manner of enforcements. In…

U.S. financial market. To start with, we shall have an understanding of the various concepts for the study. A Financial Market can be defined as the market that is meant for either the raising of finances or money, as it is known, or the investment of assets. (Financial Market) An investment here means the production of capital goods that are not actually meant to be consumed but are meant to be saved up for use at some future date, and an asset refers to anything that is owned by either an individual or by a group of people who possess the asset together. A financial market is therefore the place in which finance is raised or investments of assets are made. Various risks are present in the market, and these are also dealt with in a financial market. A risk in financial terms means that potential harmful effect in the…

Investment Scenarios

During the last several years, the U.S. economy has been going through a number of challenges. As it went through a major economic contraction and began expanding. However, the underlying rates of growth have not been sufficient enough to erase the job losses that were created from the last recession. This means that there are two scenarios that are most important today. ("Kiplinger Economic Outlooks," 2013)

Outward shift in supply of capital occurs in situations where new sources of capital enter the market, either from a domestic savings (people desire to save more) or foreign investment sources. The greater the supply of capital requires banks and other intermediaries to reduce the interest rates and encourage more borrowing. Net result: Lower interest rates and more capital invested.

In this situation, the outward shift in capital is resulting in an increase in the money supply and available sources to lenders.…

Capital Project

esults and acceptability of the item for key stakeholders

Da Vinci is a lucrative product that has immense contributions to the delivery of health services in many health centres globally. The effectiveness of the product lies on its new entry into the modern market. Da Vinci production and use have enlightened the public and hospital fraternities on new approaches of managing surgery operations. The resultant effects that are going to be felt after using the product are more increasing and beneficial than using the old mechanisms. The innate objective of the tool will improve on delivery of surgery services in ways that are more safe, effective, and affordable to the public. Da Vinci was first introduced as a safe way of improving surgery operations in the hospitals. Moreover, the use of the product had not been made public. Now that the machine will be available in many health…

Capital Requirement and Risk ehavior

Arab African International ank

Midan ElSaray El Koubra, Garden City Caoro

The research will mainly dwell on the capital requirements and risk behavior of banks, more in particular the credit risk. The purpose of this research is to identify and analyze the relationship between capital requirements and the risk behavior of banks in Egypt

more in particular the Arab African International ank, which is the case study for this research. Secondly, the research will seek to investigate the impact of capital regulation on the banking behaviors and particularly on the levels of credit risk of banks operating in Egypt

The findings of the research show that there is negative relationship between capital requirement and banks' risk behavior; the findings also show there is empirical evidence to prove that capital regulations have a negative impact on credit risk of banks levels of credit risk of banks…

Capital Structure Decision and Cost of Capital

My SLP Company of choice is Wal-Mart Stores. The other two companies I will be relying on for purposes of this discussion are Target Corp. And Costco Wholesale Corporation. Both companies happen to be in the same industry as Wal-Mart Stores. Most specifically, this text will compute the debt ratio and the debt-to-equity ratio of Wal-Mart Stores and discuss whether or not these ratios could be regarded too large or too small. Further, comparisons will be made between the debt-to-equity ratio of Wal-Mart Stores and that of its two competitors - Target and Costco.

The debt ratio in the words of Graham and Smart (2011, p. 44) is "a measure of the proportion of total assets financed by a firm's creditors." It is computed by dividing the total debt figure with the summation of equity and total liabilities. All the dollar figures below…

It would be difficult for the company to satisfy its shareholders with differing interests, but there is a solution-Net Present Value.

Using Net Present Value (NPV) as criteria to select projects assumes proficient capital markets. In other words, in order to work the company has to have access to whatever budget is needed to continue the positive Net Present Value projects. Sometimes there may also be capital ration and the concept of capital budgeting process becomes more and more complex.

Alternative Rules for Capital Budgeting

While NPV is the rule which maximizes value of shareholders, some companies use other strategies for their capital budgeting decisions. Common alternative strategies include:

Profitability Index

Internal Rate of Return (IPR)

Payback Period

Return on Book Value

Investment decisions made from the Profitability index and Internal Rate of Return methods agree with those of Net Present Value. Decisions made using the return on book value…

Although advertising costs can be substantial, it is essential that companies place significant amounts of funding into advertising. Such funding is necessary because it provides companies with a competitive advantage. According to Doraszelski & Markovich, (2007)

"Practitioners know very well the value of advertising to achieving their long-term market share and profitability goals. A survey of senior executives in 1999 reveals that 82.9% somewhat or strongly agree that good advertising can provide their company with an edge over the competition in the marketplace. Furthermore, 86.8% somewhat or strongly agree that advertising is a long-term investment that contributes to the financial growth and stability of their company (American Advertising Federation, 1999; Doraszelski & Markovich, 2007)."

The authors also explain that firms believe that advertising has the capacity to give them a sustainable competitive advantage over other firms (Doraszelski & Markovich, 2007). Nevertheless, dynamic models of advertising competition, assert that the opposite…

The company finances foreign operations with debt from a number of different countries. It does this on the basis of the parent company's credit rating, which illustrates that the implicit understanding with respect to the parent company default guarantee of subsidiary debt holds across different debt markets (Stern & Chew, 2003, 394).

There are also times when the capital structure is determined more by strategic considerations than any other. Many firms operate foreign subsidiaries as joint ventures, for example, because this gives the firm greater access to foreign capital markets and usually reduces the country risk and market risk associated with the subsidiary, when compared to a greenfield subsidiary. There is evidence that firms using this tactic do so in part to reduce the costs associated with foreign market entry, including financing costs. Hennart's (1991, 483) study of Japanese subsidiaries in the United States showed that transaction costs played a…

capital fall if financial markets are no longer segmented? What evidence is there of this effect?

Up until the mid-1940's markets where knows to be restrictive in cash flow movement, this in combination with tax and transactional barriers on ownership by foreign entities meant that equity markets were not developed. They were in fact marked with low liquidity, not enough regulation and inconsistent disclosures.

If capital markets are segmented, then investors can only invest domestically. This means that the market portfolio (M) in the CAPM formula would be the domestic portfolio instead of the world portfolio.

This equilibrium had banks, securities market and capital markets as the primary source of finance. The localized source of finance meant that domestic investors were they only players in the market with most shares, resulting in high cost of capital.

1970's brought on the liberalization of markets in the developed countries which resulted in…

Capital orks seeks to explain the venture capital industry, debunk myths and offer a view of what the role of venture capital is to the U.S. economy.

Zider begins by explaining that venture capital does not provide as much money to start-ups as is often considered to be the case. In general, venture capital goes to follow-on funding for projects that were originally developed by governments or corporations. Those latter bodies perform the innovation task, and venture capital comes in once the product/service has been developed somewhat and needs to be taken to market. Because of this, venture capital is short-term money, not long-term. The objective of the venture capitalist is to commercialize an idea and then exit either by taking the company public or selling to a larger company. Venture capitalists exist, Zider points out, because this segment of the capital markets is underserved by other players. In that…

Because Ameritrade's Initial public offering was in March of 1997, the time series is to short for estimating beta (August 1997), as the provided data will give inaccurate results. That's why in order to estimate beta for Ameritrade correctly we can refer to the finance data of the comparable companies. It means that we should choose companies, which have cash flows with similar risk indexes, as these companies will have same asset beta indexes. For running such test 14 different firms in 4 industries (investment services, Internet services, discount brokerage, internet) were chosen: A.G. Edwards, Bear Stearns, Lehman Brothers, MSDW, Paine Webber, . James, Merrill Lynch, Mecklemedia, Netscape, Yahoo, Charles Schwab, E*Trade, Quick & eilly, Waterhouse Investor Services.

We can use the following formula to calculate beta for the firms above:

In order to estimate reliable results we should choose firms, which specialize in brokerage services. Discount brokerage firms get…

" (Kinnunen, 2004) the work of Kaplan and Schroar (2003) states findings that the past performance is highly relative to capitals flows to private equity funds.

The work of Mishra, Kemmerer, and Shenoy entitled: "Managing Venture Capital Investment Decisions: A Knowledge-ased Approach" relates the building of a causal map of the investment decision through use of interviewing venture capitalists and then converting this information into a "causal ayes net" which are stated to be "especially suited for domains characterized by a high degree of uncertainty." (Mishra, Kemmerer, and Shenoy, 2001) This technique has also been utilized in developing artificial intelligence and even used "in medical diagnosis, modeling portfolio risk and return, and new product development..." And are based on "probability theory." (Mishra, Kemmerer, and Shenoy, 2001) This method is reported to be one that increases the likelihood of gaining an understanding of the decision-making process of Venture Capitalists (VCs) and…

Market in Early epublic

James Henretta is a history professor for the University of Maryland. In his article about the market in the early republic, Henretta (1998) outlines the structure of the market during that time period. He opens by pointing out that at the time there were two competing views of what the market should look like. One view, that of Hamilton and the Federalist party, was to "use the power of the state to assist monied men ... to pursue a capitalist path of domestic commercial development" (p.290). Such an approach would focus on building a strong banking industry to support the capitalists. The other approach, as advocated by Jefferson, Madison and the Democratic-epublican party, preferred a model that supported farmers, artisans and other small businesses. Incentives would be offered for these to produce for export markets, a "subsistence-plus" model that allowed people the means to survive while…

Capital Gains Tax in Australia

Capital gains tax refers to a type of tax levied on capital gains incurred by organizations or individuals. The capital gains refer to the profits that an organization or individual selling a capital asset obtains through selling an asset at a price higher than the original price. In many countries, the amount of capital gains tax takes into consideration the type of investment and the holding period of the asset. Australian capital gains tax takes a proportion of all achieved capital gains. Capital gains are not separate tax but part of the income tax on individuals and corporations upon disposing of capital assets. Australian capital gains tax exempts personal properties such as home, car, and furniture. Australian residents in any part of the world are subject to capital gains tax.

Issue 1. Moodly's Conversion of her main residence.

Moodly being a childcare worker, wishes to…

Furthermore, capital gains normally tend to be spread across a wider income scale than many believe. According to the IRS Individual Income Tax Returns, Preliminary Data, 1992 federal income tax returns, 55% of returns claiming capital gains were from incomes of $50,000 or less, including a capital gain (Thorning, 1995). hat this information appears to come down to is that the capital gains tax affects almost everyone, which happens to affect the economy in general.

Tax Act of 2011

ith some of the huge advantages that have been back loaded, the Tax Relief Act of 2001 displays itself as more of a tax odyssey than what would be considered a tax act. The most positive of those that are called our planners really just provide estate tax repeal which is a 50/50 possibility of essentially being executed. Taxpayers and planners similarly are left with the troublesome query, "hat is the…

Capital Budgeting for Guillermo Furniture

Guillermo Navallez, owner of the relatively small yet highly successful furniture manufacturer Guillermo Furniture, is faced with a tough decision. Due to changes in the industry an in his operating atmosphere, Guillermo is unable to continue competitively running his company as he has for the past decades, with a crew of skilled laborers building furniture and with distribution handled essentially by the company itself. He must either automate his manufacturing process with a very high initial cost for equipment but allowing him to continue as a furniture manufacturer, he can shift to distribution for foreign competitors with cheaper products seeking entry into the North American market, or he can begin manufacturing and selling his patented flame retardant instead. Each choice will require an initial outlay of capital and will also have varying returns over the years. Assessing these options from a budgetary standpoint requires the…

Capital-Intensive Manufacturing Method

In order to properly calculate the estimated break-even point in annual unit sales of the new product if Martinez Company uses the capital-intensive manufacturing method, the first step is to add the manufacturing cost of this methodology. On a per unit basis, those costs are $5 +$6+$3 for a total of $14 per unit. Therefore, for every unit sold the company will profit $16, which is that $14 minus the $30 unit sales price. While the company is profiting $16 for each unit sold, it has a fixed manufacturing cost of $2,508,000 for choosing this particular methodology. Additionally, the company must compensate for an annual incremental selling expense of $502,000 as well as $2 for each unit sold. It has been noted that, "the incremental cost of selling an additional item is the difference between the cost of selling with the item included and the cost of…

Market Study and Potential for EOT Cranes, Gantry Cranes, Jib, and the Market for Imported European Hoist and Crane Components in India.

A boom in the construction industry caused a corresponding boom in the demand for construction building equipment (specifically in cranes and hoists), which shows prediction of increasing in the future. Cement, steel, and construction industries have all been involved in this popularity, all of them requesting EOT cranes, Gentry cranes, JIB cranes and European-imported hoist and crane components. The market for machinery is huge, particularly for used machinery coming from Europe with the latter mostly being used in the unorganized sector. Off Highway esearch (OH), reported that in 2009, India sold 6,499 mobile cranes, most of which have been the pick and carry type. As of 2011, the market size for EOT cranes and hoists is approximately s 1,500 crore to 1,700 crore (Project Monitor). By the year…

But even with no cost savings whatsoever, this project has a positive NPV.

e can see, therefore, that the greatest area of sensitivity is with the terminal value. The terminal value at present is worth $143 million of the NPV. If we break down the variables that go into the terminal value, however, we notice that the cost savings are critical. If SGA expense is not reduced, then the terminal value is reduced to $67 million and the total NPV for the entire project ends up being $98 million. This figure is less sensitive to the change in cost of goods sold.

e should also consider testing combined sensitivity of our shakiest projections. Sales may not live up to expectations and cost savings might not occur. If we assume no net income and no additional cost savings, the project will have an NPV. If we assume that our expectations for…

To solve these emerging needs of the company to satisfy the demand in the market, it is necessary to invest into expanding of the services offered and shifting the existing concept of the club. Firstly, it is necessary to expand the space occupied by renting out additional premises and organizing Spa procedures there. This will require also investment into necessary human resources, such as hiring Spa administrative and consultants specialists offering services for both women and men, and for both facials and body treatment to maximize the services mix. Costs for occupying this space, purchasing necessary equipment and hiring adequate staff so can exceed the current costs by ?450,000, so this is the incremental expense from proceeding with this services expansion programs. Cost to organize the fitness and Spa cafe, which is proposed to call at EnerGi Box, will amount to another ?100,000 annually. The final improvement step is investment…

The cyclicality of Choice, evidenced by their beta, and the intense competitive pressures, means that the firm is at risk for periods of difficulty. If they are too highly-leveraged, these periods could cause irreparable harm to the company. Ideally, Choice would limit the downside damage caused by the inevitable turbulent times. The medium debt ratio achieves this.

The ideal capital structure for Dell Computers is a high debt ratio. Dell's business is growing. From their beta we can infer that Dell itself is relatively stable, since they have such a broad customer base. They sell to both businesses and consumers, with several of their product lines being business only. Thus, the bulk of their risk is market risk.

The high debt ratio gives Dell sufficient leverage to participate in their industry's growth. ithout a strong cyclical downside, they are in a good position to take on a higher debt ratio,…

Capital Structures

Essentially, there are really only two ways in which organizations can raise money -- debt or equity. The core of this comes down to cash flow for each type of financing. A debt claim, for instance, allows the holder to a set of cash flow, typically principle and interest; an equity claim entitles the holder to any leftover cash after meeting all other claims. Secondly, debt has prior claim on cash flow and assets. This complicates the matter of the way debt is managed and analyzed when looking at different industries. For instance, debt as a percentage of the market value of equity in an airline would be different than one in say, electronics -- all dependent upon a variety of inventory and supply/demand, price elasticity ratios.

Organizations that have high debt-equity ratios seem to be the ones that have longer term, or higher cost-based services; or those…

1

0.107

0.107

1.788005

4.37%

7.24%

D 20 Lev

1.2925

0.120475

0.11038

1.653411

4.05%

7.22%

D 50 Lev

1.87

0.1609

0.16045

-0.1731

-0.44%

7.05%

5. The only project that is unacceptable is Project D. At the 50% leverage level. This has a negative NPV. The other projects at each leverage level all have positive net present values. The following graph shows the NPVs for the different projects:

6. My objective in making this decision is to maximize firm value. The projects are mutually exclusive. I would use NPV as the main criteria. This means that Project B. is the most desirable, at the zero leverage level. Project A is the second-most desirable, against at the zero leverage level. Project C. is the third-most desirable. Project D. is the least desirable and at the 50% leverage level is unacceptable. I feel that it is best to use NPV has the criteria…

Capital One

There are a number of risks facing Capital One in the near future. As a financial institution, Capital One faces interest rate risk, in particular given the possibility of a perpetually low interest rate environment (2011 Annual Report, p.2).

There is also the risk that economic recovery will not be strong, given the dependency of Capital One on consumer spending, in particular the rise of consumer debt (2011 Annual Report, p.18). There are also significant risks in the regulatory environment, as banking is a heavily-regulated industry and there are a number of changes proposed to the regulatory environment (p.20).

The company has a number of strategies to mitigate these risks. It addresses interest rate risk by utilizing different financial assets, including different brands and sources of capital, to lower its cost of capital. Geographic diversification also helps to mitigate economic risk, although the company does still have concentration…

Market Efficient espect Set Information Impossible Makes Abnormal Profits

Market Efficient

In his work, Fama argued that given the massive use of resources by the brokerage firm to conduct studies on trends in the industry, the effects of changes in interest rates on corporate balance sheets and expectations of managers and/or political analysts of the companies should be able to systematically beat a generic portfolio with the same risk characteristics.

Since, according to Fama, professional in every situation, the analyst has a fifty percent chance of beating the market; although its specific capabilities did not exist he would beat a lot of the market. The analyst did "help" the market to be efficient if all the investors, in fact, would hold portfolios composed of stock indices, would open up significant opportunities for professional traders to take advantage of the situation. But the movement of traders to that "new market" would…

Capital Decision

Making a decision as a venture capitalist, whether as a director/adviser for a venture capital firm or as an individual investor looking for a substantial investment opportunity, requires a great deal of consideration on various levels. Before a decision to invest is made, a careful consideration of the quantitative and qualitative aspects of a company must be undertaken, and the potential payoff of any investment must be weighed against the risks identified both within the company and in its operating environment. The following paragraphs will present a brief analysis of two publicly traded companies that are well-established, yet are also potentially large investment opportunities for an entity with an appropriate amount of capital. The risks and current states of these companies will be assessed along with other details and information in order to determine which company represents the best investment.

pSividia

pSividia Corp., founded in 1987, specializes in…

Of course, this is a good thing for customers on short-term, but is negatively affects other companies on the market. This is because smaller competitors and especially those that intend to enter the market addressed by IBM find it at least difficult to provide product prices in accordance with those provided by IBM. These smaller companies do not have the ability of reducing their production or operating costs, which does not allow them to introduce competitive prices on the market. This way, they are clearly disfavored by IBM's position and market power.

In addition to this, in a field like it, it is imperative to make continuous investments into the research and development activity. This requires significant capital amounts from these companies. The investment levels that IBM reaches cannot be reached by many of these companies. This makes it difficult for these companies to keep up with IBM and its…

Simerly and Li believe that an organization must find a match or fit between the demands of its competitive environment and its internal management systems in order to succeed and to survive." In general, the authors recommend firms in industries with low rates of environmental change high economic performance choose equity over debt in financing projects with uncertain outcomes. Conversely, firms in industries with high rates of environment change and low economic performance should consider increasing debt to increase returns to investors. Further, Simerly and Li caution that increasing debt brings more external control and that management needs to decide how much autonomy is appropriate for the organization.

ibliography

Modigliani & Miller (M&M propositions I & II) - Capital structure of corporations. Retrieved from Web site: http://www.financescholar.com/modigliani-miller-propositions.html

Simerly, R.L. And Li, Mingfang. Re-thinking the capital structure decision. Retrieved from Web site: http://www.westga.edu/~bquest/2002/rethinking.htm

Capital Budgeting

The aim of hospitals is to measure and improve the quality of health care service for the patients. Patient satisfaction is the foremost concern. However, to run a hospital, there are a lot of other factors are also involved; e.g. managing cost, budgeting, optimizing operations and increase patient satisfaction level. In order to achieve the desired level of performance, the hospital needs to be up-to-date with the latest technology.

In this era of technological advancements, every company has to maintain all their records on computer because it saves time and needs less effort than manual work. Our hospital has digitalized their data but every department has its own data base. In order to optimize the operations, hospital requires having a central data base system.

As Schuhmann (2009) stated in his article that the recent economic crisis has made it difficult for hospitals finance their capital expenditures. The capital…

Capital Assets

Classification of Gains or Losses on Futures Contracts

Facts: Taxpayer: In order to properly account for the loss that she took on her futures, Haig Simmons must understand the difference between a capital loss (or gain) and an ordinary loss (or gain). In her situation, the coal futures were a something that she entered into as a hedge in order to protect herself against fluctuations in the price of coal. This year, she has recorded a loss on the futures contract.

Is the futures contract considered a capital loss or an operating loss?

May the taxpayer deduct the loss on the futures contract from operating income?

Yes, the taxpayer may deduct the loss on the futures contract from her operating income.

In this situation, the futures contract was indicated to be a hedge at the time of the purchase. This means that it is not a capital asset.…

Capital Project

The Nexus Q, Google's new media streamer, is failing to satisfy investors because it fails to incorporate Google TV, is limited to Google Play, while You Tube has all the necessary features has been let down with the Nexus Q, and it has no Android interface (Smith). The operating system has been buried under Google-owned apps. The device is lacking in features with an overbuilt operating system. With the device costing more to the consumer than competitive products, this will not sell well and could cause the company to develop a bad image. Competitor products include Apple TV, Roku, and other Internet friendly set up boxes.

To make this product more competitive and provide justification needed for the higher price to consumers, it needs to be upgraded to provide features compatible for Google TV, You Tube, and Android compatible features for users to be able to do more…

Capital Budget Processes and Techniques

People often ask what happens when there is a surplus of imports brought into the U.S. Many think that we just have more of what we brought in to be able to hang on to and sell at a later date but that is not the case. When there is a surplus of the products that have been brought in then the price of what the surplus is will drop. Unlike when there just isn't enough for the demand for the product then the price will raise. The reason that the price will drop is due to the products already have been paid for and now they are storing the products which cost money.

When the price is dropped then this allows for the product to be moved quickly and make room for more product and different kind of product. By doing this the price…

Market Model Patterns of Change

Sir/Madam, answers attachment page. But write a APA format, citing quotations a APA format. answers fits 3 pages.

The operating system software industry that was dominated by Microsoft was a monopoly till quite some years back when other players came into the market and disrupted the monopoly. These players include Linux with their various operating system software such as edhat and Ubuntu and Apple with their Macintosh operating system.

The general pattern of change in this particular market model was that of monopoly to oligopoly. There are several short-run and long-run behaviors in the monopoly and oligopoly market models. In monopoly, there is only one market player who has full control over the market. However, in oligopoly, there are several market players who hold different market shares depending on their marketing strategies, brand awareness, product specification, product diversification, etc. Soberman & Gatignon, 2005()

The short-run…

The assumptions of industry structure and pricing are based on the market shares of the leading competitors in the motorcycle market including Harley-Davidson with 65% and Honda with 12.9%. There are over 40 different manufacturers of motorcycles globally who comprise the remaining 22% of the worldwide market (Murphy, 2008). Gaining distribution for a new motorcycle model will be challenging given the concentration level of competitors in the market. As motorcycles are considered discretionary purchases, they are influenced by the consumer sentiment index, the level of per capita disposable income, the downstream demand for motorcycle dealership and repair, and the available time consumers have for using them (Diamond, 2008). All of these factors are taken into account in the factoring of both the baseline motorcycle industry forecast and the hybrid motorcycle forecast as well.

Sales and Unit Forecasts

Using exponential smoothing and an average sale price of $9,100, the forecast for…

For this type of customers, Diesel should create a special line of clothing items, different from the one for the primary target customers. For the primary target customers the central piece is the jeans. For the secondary target customers Diesel designers should combine jeans with other clothing items that are best suitable for 25-35 aged customers, that have good jobs and that are present in high social circles. For the secondary target customers the price should be significantly higher than the price for the primary target customers. The secondary target customers are trying to buy a certain status together with the clothing items they buy, so the higher the price of the clothes, the higher the status they are achieving. Other than this, the price should reflect the work invested in creating these clothing items, which require extra care for the secondary target customers.

As mentioned above, the communication strategy…

Market Society and the Public Sphere

My journal text comes to illustrate the utmost significance of globalization viewed as the force molding and shaping the current world. It describes the multidimensional aspect of globalization that influences and encompasses all facets of life through an integrated network. Currently, globalization is the buzzword in media articles, daily talks of media people and talks of politicians. There is no aspect of life that is not influenced or affected by globalization (Tober, 2006, 33). However, many people find it difficult to reflect on this phenomenon. This is because the term is applied in so many aspects leading to its ambiguity in defining it according to my text.

Numerous volumes of work have written about globalization in numerous fields such as political, science, business, economics, sociology and many more. This has made the term globalization lack a precise cogent theory and definition. This is seen…

Secondary markets can help to bundle capital with the best managers of that capital, which can be used to generate capital in the primary markets, but in general the primary market is more efficient at allocating capital and of the two is the only one that truly generates new capital, as it funds actual production (Harris 2003).

4)

The Hussman strategic growth fund most closely aligns with my need for long-term financial growth and security, as I am still many years away from retirement, I do not need to take any unnecessary risks in order to achieve more aggressive growth. Though such a fund might be an appropriate secondary investment, the bulk of my capital should be somewhere safer and more assured (Hussman 2009).

eferences

Haris, L. (2003). Trading and exchanges: market microstructure for practitioners. New York: Oxford University Press.

Hussman. (2009. Accessed 24 September 2009. http://www.hussmanfunds.com/…

ith a strong customer and employee basis, the company envisions taking early leadership of the global market. This is also to be based upon management excellence on a local scale. The management team is envisioned to be capable of translating vision into performance on both a local and global scale, while also investing strategically to maximize profitability and performance.

d. In terms of Research and Development, Applied Materials has increased its investments despite economic downturns. The purpose of this was to increase its potential future profitability by providing advanced manufacturing systems for its customers worldwide. This proved to be a good strategy, as the company had build a broad product line that catered for nearly every chip manufacturing stage. In order to reach the next step; integrating systems to perform a specific process sequence, a new facility was needed, and 1997 saw the beginning of construction on the Equipment and…

The company's internal focus will need to shift dramatically in order to maintain or increase its current market position.

Corporate and Business Strategy

Capital One's business strategy is highly aggressive, as is evidenced by their innovative move (for a company with their focus) into the banking industry, and their take-over of several regional banks. Capital One also actively recruits new strategists to work directly at the corporate level, and maintains an internal strategy of frequent strategic change and innovative practices. This leads to an incredibly adaptive business strategy; Capital One has remained poised to exploit new opportunities in the changing banking market.

At the corporate level, Capital One has a healthy mixture of steadfast leadership (the CEO has remained unchanged since the company's formation in 1988) and innovation through new partnerships and new personnel. Like their business strategy, aggressiveness and adaptability have been key components of Capital One's corporate strategy.…

Capital Budgeting

There are five strategic projects that are available for Superior Health System. The system lost money last year, but it does have a contingency fund. Whether it is worth dipping into that fund, or other avenues of financing, depends on the strength of these projects. So it is important to analyze the projects.

Partner with a major supplier who will guarantee price, delivery, and product quality

Expand the ENT, Plastic, Gynecology, and Orthopedics surgical programs

Develop a cost-reduction program.

Spend $3,000,000 to expand primary care physician membership in Corinth Health Systems, SHS's PHO

The rational for this order is as follows. Financially, the first two options are positive. Partnering with a major supplier, if it costs nothing up front and delivers that sort of value, should have been done yesterday. Expanding the ENT, gynecology and orthopedics departments has the highest up front cost, and while that might be…

Specification of Thesis's Main Point:

Goldman (2009) surmises that today's economic crisis has changed many aspects of financial reporting, one of which is the calculation of the cost of capital.

Three Supporting Opinions/easons:

Utilizing much of his own personal, professional experience as well as other sources, Goldman's (2009) three supporting opinions all highlight the impact today's economic crisis has had. He quotes Marc Panucci, an SEC associate chief accountant, in his first supporting opinion. Panucci agrees with Goldman's theory that the turbulent economic environment of today requires changes to existing disclosures, in order to meet disclosure requirements. This is especially true when meeting disclosure requirements in liquidity, risks and uncertainties, and credit risks.

The Internal evenue Service is Goldman's (2009) second supporting source. Not known for their empathy, the IS has eased rules so that homeowner's facing tax liens can sell or refinance their homes. In fact, in some instances,…

Capital

There are a number of financing options for small business. The two major categories are debt and equity. Debt comes in a variety of forms. Bank loans are common. Credit cards are used sometimes by startups; bond issues by larger firms. Debt is an attractive option for a number of reasons. Debt has a lower cost of capital, which is beneficial to many small businesses. As well, debt financing allows the owners of the company to maintain control, and this is usually considered to be quite important for many small businesses in particular. The downside to debt is that the company is then obligated to pay that debt back before it can reinvest profits back into the business - debt repayment is more important than reinvestment in terms of financial obligations (Parker, 2012).

Equity comes at a higher cost than debt. Equity is also means that some control is…

(Dunn, 2009)

Arumemi-Ikhide believes that Arik can succeed due to a combination of the opportunity -- helped by economic and air transport reforms in Nigeria -- and the capability to deliver a high quality product." (Dunn, 2009) Also stated by Arumemi-Ikhide is that this "will be a key in differentiating it in the international market and providing feeder traffic. That will be the lifeline for the international network. That's what sets up apart from our rivals." (Dunn, 2009)

Martin Russell states in the report entitled: "Arik Air: The Future of African Aviation" that both the "internal opinion of African air travel and that of onlookers overseas was bleak before the arrival of Nigeria's newest treasure, Arik Air." (2008) Russell states that the aviation industry is African is "hampered by somewhat less predictable weather and frequent storms" resulting in aviation in African being "far from predictable with temperamental skies that readily…

International Financial Markets and Institutions:

Throughout the globe, today's landscape of international financial market and institutions has continued to experience several changes that require practitioners to examine new models. The need for practitioners to examine new models that are relevant to the state of these markets and institutions has also been necessitated by the recent events that contribute to financial crises, which have been very dramatic. Actually, the recent financial crisis has had significant impacts on the financial institutions and markets resulting in the need for changes. International financial markets and institutions have become an important aspect of economies because they affect daily life. This is primarily because they involve the huge flow of different types of funds in the entire economy that in turn impact the profits of businesses, production of goods and services, and economic well-being of countries. In some cases, the events in these institutions and markets…

27-29) This provoked financial demands and awareness of the people in different parts of the world. People and businesses are dissatisfied with the traditional financial systems due to lack of opportunities for investors. Businesses today require more diversified portfolios for investments because this will reduce their investment risks and increase the probability of future capital flows.

Increased capital mobility has increased the importance of exchange rates which is serving as a monetary policy channel in some industrialized economies. In mid 2000s, there was a sharp shift in the flow of international investments and savings (geographic pattern) resulting in the segmentation of current account imbalances. This was also a major contributing factor. Additionally, the domestic financial markets were also affected by the change in regulatory environment. The two important factors for this are as follows:

1. apid growth of OTC (over-the-counter) markets of derivatives in terms of complexity as well as…

organizations customer markets fundamental business models • In a 3- 5-page paper, apply framework -market analysis (external labor markets, internal labor markets, capital markets, customer markets) conduct a compensation strategy analysis competitive landscape organizations • In addition, organization, highly influential, large population job organization apply question, "What economic difference organization performance job, poor, mediocre outstanding?" Post a multiple market analysis.

Competitive Landscape Analysis on Three Companies

Coca Cola Competitive Landscape Analysis

External Labor markets

Coca Cola is one of the most well-known companies on international level. The company is an established brand with high popularity. Coca Cola has built in time significant emotional attachment to this brand from customers, employees, and business partners. Therefore, it is expected that numerous individuals want to work for the company. Coca Cola has developed a recruitment and selection process oriented towards external sources of recruitment especially regarding entry level and mid level positions. This…

International Equity Markets

Advantages and disadvantages of cross listing on stock exchanges

When a company lists its stock exchange on many stock exchanges in different countries, it is referred to as cross listing. It entails exchanging in more than one country. However, a company can list its stocks on two stock exchanges in the same country. The administration is likely to be widened besides the generation of great pool of possible investors. In most cases, companies employ the common form of cross listing whereby they launch a primary listing in the country of origin before initiating a secondary listing in a foreign country. This happens when a business is pursuing to go global. For instance, an Australian firm expanding in the U.S. And seeks to reflect this in the best way (Dobbs & Goedhart, 2010).

The major reason of cross listing is to avail stock to many people across the…

Paid-In Capital

It is important to keep paid-in capital separate from earned capital (retained earnings) because they are two different forms of capital. For the investor, it is important to understand the differences between the two. Paid-in capital is the capital that the stockholders have paid into the business. Earned capital is the capital that has accumulated from the firm's earnings (Kieso, eygandt and arfield, 2007). Thus, the latter is a measure of how much money the firm has made while the former is a measure of how much money the firm has raised.

It is important to keep these two forms of capital separate because they derive from two different activities. On the cash flow statement, for example, paid-in capital would be a financing cash flow while earned capital would be a combination of operating and investing flows. By maintaining a clear distinction between the two, the exact nature…

due to changes in the economical, financial, political and technological changes, the capital markets across the world are highly influenced by the changes. As compared to the past, the development in the financial sector has been observed to be at the highest rates. In order to understand and analyze the changes in the global capital markets the below report has been constructed.

Based on the theme idea, which is the change in the capital market due to many factors and elements, the report below tends to discuss and analyse the impacts of financial deregulation and capital control on financial globalization and international diversification. This will allow understanding of how these two elements are supporting the financial globalization. A part from this, the report will also analyze the role of financial innovation and advancements and technologies on international investments. Moreover, the risks and benefits that are associated with the carry trade…

GE Capital Strategic Planning

GE Capital

Strategic planning

Geographic diversification

Sales and marketing

Theoretical foundation of GE Capital management

Between risk management and optimization

Expansion as a management philosophy

Capital funding model

Organizational learning and knowledge management at General Electric (GE) Capital

Knowledge management tools

GE Capital Strategic Planning

General Electric (GE) Capital is the subsidiary unit of General Electric (GE), USA. GE Capital is headquartered at Norwalk, Connecticut, United States and has five divisions within GE Capital i.e. GE Aviation Services, GE Money, GE Energy Financial Services, and GE Commercial Distribution Services. These five divisions of GE Capital enable smooth functioning into respective market segments. Michael A. Neal is currently the CEO and Chairman of the company. With worldwide operational footprint, GE Capital has more than 55000 employees across 55 countries (General Electric Capital Corporation, 2012). The main services that GE provides are the leasing and lending to commercial…

Cross-Country Capital Flows and Currency

International Project

overseas investment .

GLOBAL INSTITUTES IN INTERNATIONAL FINANCE .

INTERNATIONAL FINANCE CORPORATION .

ORLD BANK .

ORLD TRADE ORGANIZATION

INTERNATIONAL MONTARY FUND .

INTERNATIONAL FINANCE IN CHINA .

BANKING INSTITUTES

NON-BANKING INSTITUTES

THE EXCHANGE RATE FIASCO

FINANCIAL CRISIS IMPACTS ON SINO-AMERICAN RELATIONSHIP

RECESSION'S AFFECT ON CHINA .

ASIAN MONETARY FUND .

CHINA'S TRADE POLICIES AND THEIR CONTRIBUTION TO THE FINANCIAL CRISIS

Monetary policy is the study of circulation of money, the granting of credit, the making of investments and the provision of banking facilities and international finance is studying it on an international level.[footnoteRef:2] Usually the affect can be seen in exchange rate and foreign investment and international trade. This includes the analysis of global financial markets, cross-country capital flows and currency, international projects, and overseas investments. [2: Merriam-ebster Online Dictionary: http://www.merriam-webster.com/]

US Monetary Policies have a far reaching effect on the other…

Business Finance

How firm raise capital by using venture capital? What conditions we need to raise capital by using venture capital?

Many startup companies are not mature enough to obtain capital from the public or secure a loan with the local banks in their area. They therefore, have to rely on venture capital as a way of raising capital for the firm to continue with the daily operations. Firms hence, raise capital by going out and looking for people who are willing to invest their money in a company that they see has the potential for growth. The company looks for a number of people who can pitch in large amounts of money depending on the nature and type of the business which if successful is expected to give above average returns to investors (Krishnan & Ivanov et al. 2011).

There exist certain conditions for a firm to secure capital…