The Information Systems Development Life Cycle Assignment

The Information Systems Development Life Cycle - Assignment Example The researcher states that in the photograph printing store, the components (phases) in the SDLC will be the steps to be taken to migrate to a new computerized and more accurate (tamper-proof) employee time-entry system and analyzes each step. Planning – this is the very first or initial phase of the SDLC and ideas here are discussed such as what the proposed computerized system is expected to solve (problems like the lost punch cards, inaccurate timekeeping, and employee cheating – punching for an absent employee). The costs will also be discussed and the time frame needed to fully implement this new system. Creating – the hardware requirements will be specified including a software program to run the whole system. A total number of employees, backup systems, desired features and all other operational details are created at this point so that management expectations can be met. Testing – the new system will be tried if there are kinks or bugs in it so rem edies and patches can be applied immediately prior to actual implementation and avoid future problems. Deploying – once the new system is complete and fully operational (bug-free), it will now be implemented throughout the entire store and employees are required to use it. The new system can then be integrated into the firm’s payroll system to automatically compute wages and salaries for the employees based on their time records to generate a payroll.

Cultural Differences Affecting Meaning and Understanding Essay Example for Free

Cultural Differences Affecting Meaning and Understanding Essay How do cultural differences affect meaning and understanding? In today’s business environment, the mechanics of global business seem to be working on a surface level. We can make quick money transactions by phone or by computer. Consumers can purchase products from all different countries in one transaction. Although trade barriers are still a major topic, they are slowly decreasing. As we sick below the surface, we will see that Global business is still in major jeopardy because of a newly emerging challenge: Cultural differences. Culture is the pattern of beliefs or expectations that inevitably shape the behaviours of individuals and teams within organisations. It is concerned with the basic assumptions, values, attitudes, food and feeding habits, dress and appearance, relationships, a sense of self and space and norms shaped by members of an organisation or country. These elements of culture are usually taken for granted and guide others perceptions, thoughts and actions. For example, the Culture at McDonald’s fast food chain emphasises efficiency, speed and consistency. It orients employees to company goals and charters and suggests the necessary behaviours for success. Many educated, business people may say â€Å"But we are getting closer and closer to each other, we don’t have any cultural problems’. Yes, it is possible to transcend cultural differences; however statements like this can be misleading to many people. (Funakawa, p18) Geert Hofstede, a successful cross-cultural management researcher, observes five different dimensions within a culture: Power/Distancing – This refers to the degree of inequality that exists and is accepted among people with and without power. High Power distancing cultures conclude that society accepts an unequal distribution of power and people understand their place in the system. Low Power Distancing means that power is shared and well dispersed. It also means that society members view themselves as equals. Application: According to Hofstedes model, in a high Power distancing country like Malaysia, you would probably send reports only to top management and have closed door meetings where only a select few, powerful leaders were in attendance. Individualism – This refers to the strength of the ties people have to others within the community. A high Individualism society indicates a loose connection with people. In countries with a high Individualism society there is a lack of interpersonal connection and little sharing of responsibility, beyond family and perhaps a few close friends. A society with a low Individualism would have strong group cohesion, and there would be a large amount of loyalty and respect for members of the group. The group itself is also larger and people take more responsibility for each others well being. Masculinity – This refers to how much a society sticks with, and values, traditional male and female roles. High Masculinity societies are found in countries where men are expected to be tough, to be the provider, to be assertive and to be strong. If women work outside the home, they have separate professions from men. Low Masculinity societies do not reverse the gender roles. In a low Masculinity society, the roles are simply blurred. You see women and men working together equally across many professions. Men are allowed to be sensitive and women can work hard for professional success. Uncertainty/Avoidance Index – This relates to the degree of anxiety society members feel when in uncertain or unknown situations. High Uncertainty societies try to avoid ambiguous situations whenever possible. They are governed by rules and order and they seek a collective truth. Low Uncertainty societies indicate the society enjoys novel events and values differences. There are very few rules and people are encouraged to discover their own truth. Geert also observes that when people write about national cultures in modern society becoming more and more similar, the evidence cited is usually taken from the level of practices; people dress the same, use the same fashionable words in context, buy the same products and brands, they participate in global sports etc. These manifestations of culture are sometimes mistaken for all there is: the deeper, underlying values is often overlooked. (Funakawa p33) The value for cross cultural communication cannot be overemphasised. It is what enables any mission statement, vision or strategy, and affects meaning and understanding on every level.

TV Personalities Essay Example for Free

TV Personalities Essay For this project, I chose the television show House. In this particular episode, Dr. House and his team of doctors face the problem of diagnosing a man who came into the ER at the hospital after fainting. There are no clear symptoms that point to a single medical diagnosis. The second part of this episode deals with House and his best friend Wilson. Wilson is in a relationship with another doctor that House doesn’t particularly like and House is determined to get his fair share of time with his friend, away from his girlfriend. I have obviously chosen Dr. House has my subject for this paper. House is a very brilliant and gifted doctor. He is also very obnoxious, overbearing, rude, egotistical, sarcastic, arrogant, and cantankerous. House will gather his team to brainstorm about what the symptoms that patient is showing to see if they can come up with a solution and House will override everything they say. He will ask for a vote on the way to proceed and then disregard the vote for whatever he wants. Looking at Freud, it would appear that House’s id is still very strong and was not tempered very much by the Ego and Superego. House is still very demanding, irrational, illogical and impulsive in the way he lives his life. By studying Freud, it would also seem that in the stage of the Superego that House failed to fully develop the ego ideal and the conscience. The Behaviorist’s view would show that the way House is today is a result of environmental stimulus that was reinforced or strengthened in some way while he was growing up. It would suggest that his parents might have praised him when he acted out and was disrespectful instead of properly chastising or punishing him. The social cognitive view of personality suggests that House has a high self-efficacy. He is very sure of his talent as a doctor and therefore excels at his job. This view of personality also will show that House is very comfortable in his environment. Because of his comfort level, his behavior of being rude, sarcastic, and so on, will continue because he receives the type of reaction from others that it seems like he expects. This theory suggests that if the environment changes, his behavior should adapt to the change. In this episode, the only time his behavior changed in any way was when he was out with his friend Wilson. Although he was still sarcastic, overbearing and obnoxious, it was not as bad as when he was in the hospital. House’s real self and his ideal self are pretty well matched when looking at the humanistic perspective. House is very confident and sure of himself in what he is and who he wants to be. According to Rogers, House would be a fully functioning person. When House was growing up he must have received unconditional positive regard from his parents. The last personality theory that will be touched upon will be the trait theories. The one trait theory will be scrutinized is the Big Five. House is definitely an extrovert. He obviously likes being the center of attention. This was shown by the way he directed the attention to be on himself whenever he gathered his team of doctors together. House would also score very low on the trait of Agreeableness. House was very rude, irritable, and aggressive. A very high score would be given to House on Openness. House shows that he would have to be very curious and imaginative when looking for the causes for symptoms that patients emit and finding a diagnosis and cure for those symptoms. House was also very nonconforming. House definitely did not conform to the expectations of the way a doctor should conduct himself, whether with other colleagues or with patients themselves. House would also score high on Conscientiousness. He might not be the easiest person to be around, but he is very reliable. He would also have to be an ambitious person to become the brilliant doctor that he is. Neuroticism is hard to decide. Although House shows that he can be very temperamental, which is a characteristic for the higher score, it did not seem that he exhibited the traits of worrying, insecurity, and anxiousness. On the flip side, the low scoring characteristics for Neuoticism are calm, secure, relaxed and stable. House could probably be described as stable, but the other characteristics don’t really match him either.

How Investment Opportunities Affect Cash Holdings

How Investment Opportunities Affect Cash Holdings Introduction In recent years the interest of financial researches raised to firms cash policy, cash positions; if more accurate they are paying more attention why do firms hold so much cash. These issues have a long history and are the basis of corporate finance.  Indeed, from the day to day operations to finance long-term investments, own funds are just the most important source of funding. In particular, observers have recently serious doubts about the validity of so much cash.  This problem has led to important research aimed at clarifying the multifaceted aspects of monetary policy firms.  Although the rapid development of significantly enriched our understanding of the factors that stocks of companies the funds, the literature has paid little attention in the form of cash policys real impact on the daily activities of firms. In the 2007-2008 credit crunch business leaders and the media have made the phrase cash is sovereign back in vogue.  Although the firms internal cash flows decline, the stock markets collapsed and the credit markets nearly frozen, the lack of money has become a reality for many firms.  For example, General Motors (GM), based in the U.S. automaker, announced on 7 November 2008 that he could escape from the liquidity, despite the ongoing restructuring process. GM eventually reorganized through bankruptcy, but their fate was to demonstrate the importance of cash holdings.  Although the reduction of cash flows, as a rule, inevitable in many industries during the economic downturn, the symptoms can be removed by a sufficient amount of cash as a buffer to the crisis.  Nevertheless, for several reasons shareholders do not always want to see the firm to save money and sit on it.  The shareholders outlook on firms cash holdings and the cost they place on it will be examined in this research. The determinants and consequences of corporate cash holdings have attracted enlarged interest of scientists over the past ten years.  One key issue was that the relationship between cash and the value of the company.  Broadly speaking, two main factors in the equation of the advantages of liquidity of the company and the agency cost of managerial discretion.  Both these arguments have their supporters. For example, Myers and Majluf (1984) argue that costly external financing means that firms must maintain a sufficient cash reserve, which provides liquidity to take advantage of new projects a positive NPV.  However, according to Jensen (1986) the agency costs of managerial consolidation means that large amounts of cash should be paid to shareholders to keep managers overinvesting negative NPV projects.  Apparently, there is no single truth, which will apply to all companies at once, as the needs of both the firm and its managers are not uniform. Understanding the value of cash is of interest not only for researchers and scientists, but even more so for practitioners.  Equity analysts, financiers and corporate chief financial officers must all be very interesting to know which factors affect the cost of cash holdings in the company and why. Most equity analysts simply add cash to the top of the value of the company, without giving attention from what could be the reason why money should not be evaluated at face value. However, researches show, markets, monetary values in different firms in different ways, and, consequently, analysts may be too especially if the company has a large amount of liquid assets.  For corporate financiers situation is somewhat different, because they often give the conclusion that the value of the target firm is the acquirer, thereby eliminating the influence of the prevailing corporate governance and financial policies.  Nevertheless, it can be valuable to understand the value of cash when as sessing the market value of the firm.  Finally, the financial department of a firm must know why their cash cannot be appreciated at face value, and that they could do if they want.  This allows us not only to understand the preferences of shareholders, but perhaps an opportunity to meet them. Problem Statement In this research I want to find answers to the questions like: What is the reason of holding so much cash than needed? What kind of effects it could cause? How the financing constraints and investment opportunities together affect the value the shareholders place on cash? How firms investment opportunities affect the marginal value of firms cash holdings? How firms the state of external capital markets affect the marginal value of firms cash holdings? 1.3 Research objectives The aim of this work is the approach to the cost of cash holdings of firms in two directions. First, subsequent to Faulkender and Wang (2006), who studied the cross-section changes in the marginal value of corporate cash, which arises from differences in corporate financial policy. Secondly, inspired by the credit crunch of 2007-2008, I examine how changes in the external capital markets affect the cost of money over time.  As far as I know there have not been previous studies on the time changes in the value of cash.  There are several reasons why the loan should affect any results related to the companys cash holdings.  First, Almeida et al.(2004) show that financially constrained firms maintain a significantly higher proportion of their cash flow, the following adverse macroeconomic shocks than before.  This means that the relationship between the preserve cash flow and earnings of the company is dynamic and may change over time.  Second, the importance of cash is emphasized in a recession.  When a loan is becoming more rationed, the company in which a lot of cash does not need to worry about the inability to finance daily operations.  Intuitively, firms with more cash are less likely to be downgraded credit rating and are able to maintain acce ss to capital markets.  In addition, these companies can take advantage of the plight of the weaker firms, which may be less liquid assets, through active competitive actions and acquisitions.  Thus, it seems appropriate to us a treasure load of cash in good times to be able to strike when the economy turns.  Finally, as credit becomes more and more rationed, it also becomes more expensive.  This is especially true for financially constrained firms. I use a sample of around 1000 Malaysian firms for the last decade from 1999 to 2009 to test the hypothesis in Faulkender and Wang (2006), impact of investment opportunities on the value of cash, and the change in value of cash over the economic cycle. The usable observations begin from 1999 because for most of the variables I require a change throughout a fiscal year. The extraordinary state in the financial markets during 2007-2008 allows me to study how it may have impacted the value of cash. The following terms interchangeably I use in this thesis. First, in a few ways, mainly as cash holdings, cash reserves, or simply cash I refer to firms cash holdings. Nevertheless, cash level is used to refer to cash ratio (cash to net assets). Second, I use the value of cash, the marginal value of cash, value of additional cash, value of an extra dollar of cash, and the value the shareholders place on cash while referring to the value of firms cash holdings. Third, since most of the previous studies have been done with U.S. data, I discuss the value of a dollar in the introduction. However, my data are from Malaysia, and therefore in the empirical part I am examining the value of a ringgit. I review the related literature in the next section. Section 3 develops theoretical framework of the study, the main hypothesis, illustrates the methods and details the sample selection. LITERATURE REVIEW The literature on market value of cash can be divided into research focus on the benefits of liquidity, or agency costs.  The former approaches through the studies of financial policy and corporate decision making of companies, whereas the latter evaluates the degree of agency conflicts on the basis of corporate governance factors.  Despite the general division between the two issues, both are at least implicitly always present during the tests and conclusions. Although much effort has recently been devoted to studying the determinants of cash policy of firms, data on the impact of reserves firms cash remains relatively small.  However, there are a few notable exceptions.  Blanchard, Lopez-de-Silanes and Shleifer (1994), who studied a small sample of companies that received cash windfalls from lawsuits, and Harford (1999), studied the acquisition of the company with unusual cash, the document that managers with weaker incentives to maximize  value, tend to spend large amounts of cash is inefficient. Opler, Pinkowitz, Stulz and Williamson (1999) argue that corporate cash can be attributed to a compromise, the theory of financial hierarchy and agency theory.  Kim, Mauer and Sherman (1998) develop a model of compromise and argue that the optimal amount of corporate cash holdings is determined by the tradeoff between lower income and benefits to minimize the need for costly external financing.  Almeida, Campello and Weisbach (2004) believe that corporate cash holdings affected by financial difficulties.  Pinkowitz and Williamson (2001) believe that the bank authorities can affect the cash holdings of Japanese firms.  Faulkender and Wang (2006) consider changes in the marginal value of corporate cash holdings related to differences in corporate financial policy.  Foley, Hartzell, Titman and Twite (2006) offer tax-based explanations of corporate cash. Most of the literature to evaluate the relationship between financial policy and the exact market value cash holding focused on companies in the United States of America (USA) Pinkowitz and Williamson (2004), Faulkender and Wang (2006), and Denis and Sibilkov (2007) all  study how the financial characteristics of the company, and the cost of cash to play together. Pinkowitz and Williamson (2004) show that the average market value of the dollar held by a firm at roughly $ 1.20, which indicates that shareholders believe that the benefits outweigh the potential liquidity problems of the agency associated with it.  Faulkender and Wang (2006), using different methodologies to find the market value of the dollar at $ 0.94 on average.  Their results suggest that the potential costs of institutions, as well as tax effects outweigh the benefits to the average firm.  Denis Sibilkov (2007) focus on the financial difficulties of the company and the investment opportunities and find consi stent results.  Nevertheless, there is significant cross-section changes in the market value of money, thus focusing on the mean values shows only a little about the relationship between fiscal policy and the value of cash. The other branch of value of cash literature focuses on the effect of corporate governance.  For example, Dittmar and Mahrt-Smith (2007) use U.S. data show that the additional $ 1 cash for badly managed companies worth between $ 0.42 to $ 0.88, while good governance doubles the value.  Pinkowitz et al.  (2006) used a cross-border data and found that an additional $ 1 is associated with an increase in company value of $ 0.29 to $ 0.33, depending on the criteria of corporate governance in countries with weak protection of shareholders, while an additional $ 1 in cash  associated with an increase of $ 0.91 to $ 0.95 in the value of the company in countries with good shareholder protection.  In addition, Kalcheva and Lins (2003) found that a minority of investors who are not very well protected by applicable discounts for firms in high levels of cash.  This is consistent with the findings Fresard and Salva (2009), which show that the value of $ 1 of excess cash of typical non -US companies is U.S. $ 0,58, while it is $ 1.61 for the firms listed in the U.S. through exchanges means that  investors discount the value of corporate cash reserves when they are at high risk of turning into private profit. RESEARCH DESIGN AND METHODS Theoretical Framework Here I will talk about the early literature related to the value of cash holdings of the company, as well as provide relevant theory.  I begin with outlining the background to understand why firms hold cash. It is necessary to identify with why firms hold cash in order to understand how the shareholders determine the importance they attach to the cash.  Then I will present before the relevant studies and conclusions contained in the value of the cash literature. 3.1.1 Cash holding motives If all firms operating in the world of perfect capital markets, cash holdings will have no value.  If the firm was in need of cash for operations or investments, it can raise funds at zero cost. While there is no liquidity premium in such a world, holdings of liquid assets have no possibility of cost.  Consequently, if a company borrows money and invests it in liquid assets, shareholder wealth is unchanged. Nevertheless, in the real world markets are not perfect and the holding of liquid assets has its costs.  Thus, a firm must strike a balance between the marginal cost of holding liquid assets and the marginal benefit of holding these assets. Here, I present five theories of why firms hold cash and which have been shown in earlier literature. 3.1.1.1 The transaction motive Transactions motive for holding cash is due to the cost of converting money substitutes into cash.  According to Keynes (1936), a company can save on transaction costs by using cash to make payments without liquidation of assets.  Miller and Orr (1966) model the demand for cash to finance daily operations, and the required level of cash.  The company short of liquid assets has to raise funds in capital markets, liquidate existing assets, reduce dividends and investment, the revision of existing financial contracts, or use a combination of these actions.  Since there are both fixed and variable costs in increasing cash, the company must hold a buffer of cash to avoid raising cash often, and thus to avoid the associated fixed transaction costs. Myers and Majluf (1984) argue that the increase in external financing is more costly than using internal resources in the presence of asymmetric information.  Since outsiders know less than the management, they may discount the price of securities more than management was willing to accept.  Thus, the management may find it more profitable not to sell securities, and even reduce the investment.  For this reason, it may be optimal for companies that conduct a certain level of cash to meet the needs of investment spending. 3.1.1.2 The agency motive Jensen (1986) argues that entrenched managers have incentives to retain cash rather than an increase in payments to shareholders, even if the firm has limited opportunities for investment.  Opler et al.  (1999) tender reasons why managers can use the optimal cash policies.  First, managers can accumulate funds to pursue their personal interests.  Cash allows managers to invest in external capital markets would not be willing to finance.  They usually spend one dollar in cash in hand, even if they cannot raise financing from the markets.  Consequently, they could make investments that may have a negative impact on the value of the company.  Jensens (1986) free cash flow problem predicts that managers with surplus cash are probably to overinvest.  Thus, a one dollar increase in cash holdings of firms can lead to significantly less than one dollar increase in the value of the company.  As the outsiders do not know, whether managers are accumulating cash to increase the value of the company or pursue their own goals, the cost of external capital is likely to increase. 3.1.1.3 The tax motive In recent studies by Foley et al. (2007) shows that U.S. companies which will bear the tax consequences associated with the repatriation of foreign earnings hold a high level of cash. Affiliates referring to the highest tax consequences of repatriating also have the highest level of cash.  This means that multinational companies are more likely to accumulate cash.  The extent this applies to the Malaysian firms has yet be studied. 3.1.1.4 The theory financing hierarchy The theory of financing hierarchy implies that there is no optimal amount of cash, based on arguments similar to the hierarchy theory of capital structure (Opler et al. (1999)).  According to theory, firms are not willing to issue shares, because it is too expensive because of the asymmetry of information.  They sell the debt when they do not have sufficient resources, and when they can do so.  When they have sufficient resources to invest in profitable opportunities available, they pay the debt which becomes due, and to accumulate more cash or else.  The theory assumes that the cash holdings of firms are less strategic choice but more a result of a dynamic, endogenous process. 3.1.1.5 Investment opportunities and the value of cash Pinkowitz and Williamson (2004) were the first who studied the market value of cash holdings.  They focus on firms investment and financing opportunities.  They find that the growth of the company have the possibility of a positive attitude to the market value of money.  Firms with greater investment opportunities have a higher cost of cash.  They also show that firms with higher uncertainty of investment have a higher valuation.  In addition, firms in a difficult financial situation have lower valuation on cost. Faulkender and Wang (2006) confirm this conclusion, as they show that firms with lower leverage, a proxy for financial distress, have higher value put on cash.  Finally, Pinkowitz and Williamson (2004) argue that access to capital markets does not affect the market value of cash.  However, they note that their proxy for access to capital markets, company size may not be perfect. Consequently, Faulkender and Wang (2006) show that the difficulties in obtaining ac cess to capital markets play an important role in the market value of cash.  Liu and Chang (2009) show similar proof on the impact of financial constraints on the market value of cash.  Faulkender and Wang (2006) also show that the marginal cost of cash reduces with the amount of cash holdings.  They argue that this is associated with an increase in the probability distribution of cash to shareholders, and consequently incurring transaction costs and taxation, to reduce the cost of cash. Hypothesis After I studied the theory of the value of cash holdings, I turn to the empirical predictions.  I present hypotheses for the impact of financial policy and investment opportunities on the value of cash.  These hypotheses relate to previous work in the field of corporate finance and the value for cash. Hypothesis 1: The marginal value of cash is decreasing in the level of the firms cash position After Faulkender and Wang (2006), I initially hypothesize that the marginal value of the shareholders place on cash holdings of the company reduces as the level of cash holdings increases.  The reasons are based on agency and tax considerations.  As firms cash level rises it becomes more likely to distribute the cash to shareholders who then as a result incur a dividend tax.  In addition, the company with high cash holdings becomes more vulnerable to face agency costs as shareholders begin to worry about the interest and ability of managers to invest in positive NPV projects.  Thus, the marginal cost of cash should reduce as the cash level of the company increases. Hypothesis 2: An extra ringgit of cash holdings is less valuable for shareholders in highly levered firms than in firms with low leverage. The second hypothesis from Faulkender and Wang (2006), which I test in my Malaysian sample, is the negative relation marginal cost of cash and firms leverage.  The cost of cash for shareholders in high levered firms is likely to be less than in firms with low leverage as contingent claims analysis predicts that most of the value of these firms is in the hands of debt holders. Additional ringgit is likely to go mostly to increase the value of debt and therefore, the value for shareholders is low. Hypothesis 3: An extra ringgit of cash holdings is more valuable for shareholders in financially constrained firms. The last hypothesis which follows Faulkender and Wang (2006) is that the simplicity of accessing to external capital markets should have an impact on the value of cash.  Access may be limited for various reasons, but often associated with asymmetric information about the state of the company, which may occur for smaller firms, firms without any credit rating or equity research coverage and the firms that do not pay dividends.  These firms can be considered as financially constrained and can be thought of having higher costs in raising external funds.  Thus, with its own funds, i.e. cash in hand, should be more valuable to these firms than financially unconstrained firms, which are likely and able to obtain external financing. Hypothesis 4: An extra ringgit of cash holdings is more valuable for firms with good investment opportunities. I examine whether firms with better investment opportunities have a higher valuation on their cash holdings than firms with weaker growth potential by following Pinkowitz and Williamson (2004).  Pinkowitz and Williamson argue that the main theoretical determinant of the value of cash holding should be the investment opportunity set of the firm.  First, liquidity is important, because without liquid assets of the firm will be forced to abandon a positive NPV project (Myers and Majluf (1984)).  This should increase the cost of cash as it is expected to increase in value of assets.  Secondly, Jensens (1986) free cash flow problem arises when the firm has a few good opportunities for investment.  If a company with sufficient cash reserves has positive NPV investment opportunities, it is likely to use these advantages instead of wasting money on unproductive ventures.  Intuition is that when two identical firms except that one has a positive NPV investment opportunities and th e other one does not have the opportunity to invest, it is likely that the first firm will spend its cash in ways more valuable to the shareholders. Hypothesis 5: The marginal value of cash is high for financially constrained firms with good investment opportunities. One of the arguments in Faulkender and Wang (2006) having a higher marginal value of cash for financially constrained firms is that when firms have positive NPV investment opportunities. The higher the cost of raising external capital is, the more likely these opportunities are foregone. Though, they do not test for it empirically. I hypothesize that the reason why financially constrained firms and firms with better investment opportunities have a higher value placed on cash when examined separately, is in fact due to the combined effect of these two criteria.  A financially constrained firm without investment opportunities is unable to make return for the cash, while a financially unconstrained firm with good investment opportunities can simply increase external funding when it needs to. Thus, financially constrained firms with good investment opportunities should have a high value placed on their cash holdings by their shareholders compared with other firms. Hypothesis 6: Firms cash holdings, on average, decrease when the cost of external capital increases. When conditions in the corporate credit market deteriorate, it often leads to a reduction in the economy (Fisher (1933)).  As firms generate less internal cash flows and at the same time, corporate credit becomes more expensive and rationed, cash reserves of firms, on average, should decline.  It was also suggested by Opler et al (1999). Hypothesis 7: When the cost of external capital is higher an extra ringgit of cash holdings is more valuable. As the supply of credit becomes more rationed and therefore more expensive, the cost of raising capital increases.  The increase in the cost of capital makes firms more likely to give up positive NPV projects due to lack of funding.  Therefore, when a credit is more rationed, cash holdings should become more valuable because they can help companies take advantage of positive NPV investment opportunities without incurring high costs of raising external capital. Methods I follow Faulkender and Wang (2006) who developed a methodology which estimates the extra value the market incorporates into equity values that result from changes in the cash position of firms over the fiscal year to measure the impact of corporate financial policy on the value of cash holdings. Since stock returns are influenced by the common risk factors, as well as changes in firm-specific characteristics it is necessary to control for both to be able to estimate the magnitude change attributed to the change in cash. The change in the value of a firm is measured by the excess return for the firm i during fiscal year t less the return of stock is benchmark portfolio during fiscal year t. Then the excess returns are regressed on changes in the characteristics of the firm.  In this case the main interest is in the estimated coefficient corresponding to the variable measuring the ratio of unexpected changes in cash of the firms lagged equity value.  Since the dependent and indepe ndent variables are standardized by lagged market value of equity, the coefficient measures the dollar change in shareholder value resulting from a change of one dollar of cash held by the firm. Faulkender and Wang (2006) methodology is in effect a long-term event study, in which event is unexpected changes in cash holdings, controlled for other factors that may impact returns over the assessment window of one year. 3.3.1 Controlling for risk-related market-wide factors To control for risk-related factors excess returns are examined that may impact a firms discount rate and return. Fama and French (1993) show that size and the book-to-market of equity clarifies ordinary variation in stock returns. To arrive at the estimate of the excess return I use the 25 Fama-French portfolios (Fama and French (1993)) formed on size, measured as market capitalization, and book-to-market value of equity ratio (BE/ME henceforth) as my benchmark portfolios. First firms are sorted by size and divided in five size groups, and then firms are sorted by BE/ME ratios and divided in five BE/ME quintiles for each year. Then I group every firm into one of BE/ME portfolios and 25 size based on the intersection between the BE/ME and size independent sorts. Firms excess return is calculated by subtracting the firm is benchmark portfolio return during fiscal year t from the firm is stock return during fiscal year t. The fiscal year, or yearly, returns are calculated using the monthly returns. Hence, the dependent variable for the baseline regression is (1) where ri,t is the stock return for firm i during fiscal year t and is stock is benchmark portfolios return during the corresponding fiscal year t. 3.3.2 Controlling for firm-specific factors It is necessary to control for variables that could be correlated with both change and returns in cash holdings to be able to examine how much the change in cash holdings impacts the change in equity value. Hence, in addition to change in cash should be regressed the excess stock return over the fiscal year on changes in a firms profitability, investment policy, and financing policy. The subsequent equation describes baseline regression: = (2) where the ΔX term indicates unforeseen change in variable X. The dependent variable is described above. The independent variables are firm-specific factors that control for sources of value other than cash or may be correlated with cash holdings. The dependent variable was described above.  Independent variables are firm-specific factors that control the sources of value, except for cash and can be correlated with cash holdings. ΔCi,t is the unforeseen change throughout fiscal year t in firm is cash holdings in balance sheet and the most significant variable in the regression. I suppose that the unforeseen change in cash holdings equals to the realized change in cash holdings throughout the fiscal year. ΔEi,t is the change throughout fiscal year t in earnings before interest and extraordinary items, and controls for profitability of firm. Firms investment changes policy are controlled by ΔNAi,t, the change throughout fiscal year t in total assets net of cash, and ΔRDi,t, the change throughout fiscal year t in RD expenditure. The financing policy is controlled by ΔIi,t which is the change throughout fiscal year t in interest expense, ΔDi,t which is the change during fiscal year t in sum dividends, Ci,t-1 which is firm is lagged cash holdings at time t-1, Li,t which is market leverage at the of fiscal year t, and finally NFi,t which is the firms net financing throughout the fiscal year t. As the stock return is also by definition divided by Mi,t-1, the standardization allows for understanding the estimated coefficients as the dollar change in value for a one-dollar change in the relevant independent variable. Sample Selection For my empirical analysis of the marginal value of cash in Malaysia and how it may have changed over time with the availability of capital from the external market I use a sample of publicly listed Malaysian firms from 1999 to 2009. The sample includes both active and inactive firms to avoid a survivorship bias. In this section I describe how I calculate the variables and from where I obtain the data. Here I will first describe how the dependent variable is calculated, and then describe the independent variables in detail. 3.4.1 Dependent variable The dependent variable is the excess return of a firms stock (Eq. (1)). The stock return for a firm i through fiscal year t, ri,t, is calculated using Total Return Index (item ReturnIndex) from Thomson Reuters Datastream database (referred as Datastream after this). The index regulates for stock splits and dividends, and therefore the most accurate measure of increase in firm equity value. 3.4.2 Independent variables The change is basically the difference between fiscal years t and t-1. In addition, all variables excluding for leverage and net financing are deflated by one-year holdup market value of equity. The variables used in Eq. (2) are measured as below: a) Ci,t and Ci,t-1 One-year holdup cash holdings and cash holdings are measured as cash and short-term investments (CashAndSTInvestments). Ever since this is the most important variable, it should be noted that firms cash holdings are considered to include marketable securities and cash in majority of academic studies. Depending on the source, these can be listed as cash and equivalent, cash and short-term investments or marketable securities and cash. Though, in addition to cash the definition can include items such as commercial papers, treasury bills and other money market investments. In general databases adjust the reported records from firm financial statements in order to make the data comparable across the firms. b) Ei,t Earnings before interest and extraordinary items are calculated as earnings before extraordinary items (IncomeBefExtraItemsCFStmt) plus interest expenses (InterestExpenseOnDebt). c) NAi,t Total assets net of cash or net assets, are calculated as total assets (TotalAssets) minus cash holdings (CashAndSTInvestments). d) RDi,t RD expenditure is simply RD expenditure (ResearchAndDevelopmentExpense). It is set to zero if missing. e) Ii,t Interest expense is measured as interest expenses on debt (InterestExpenseOnDebt). f) Di,t Total dividends are measured as common dividends paid (CommonDividendsCash). g) Li,t Ma

A Child Called It Essay -- Child Abuse Essays Papers

A Child Called It As a child Dave Pelzer was brutally beaten and starved by his emotionally unstable, alcoholic mother; a mother who played tortuous, unpredictable games that left one of her sons nearly dead. She no longer considered him a son, but a slave; no longer a boy, but an 'it'. His bed was an old army cot in the basement, his clothes were torn and smelly, and when he was allowed the luxury of food it was scraps from the dogs' bowl. The outside world knew nothing of the nightmare played out behind closed doors. Dave dreamed of finding a family to love him and call him their son. It took years of struggle, deprivation and despair to find his dreams and make something of himself. A Child Called 'It' covers the early years of his life and is an affecting and inspiration memoir of one child's determination to survive. In most of my classes I’ve always heard that your parents are the most important people in your life and I truly believe this. People are affected by everything their parents say and do both in childhood and later on in adulthood. If a child is constantly looked down upon and made to believe that nothing they do is good enough, chances are they will grow up believing this and having low confidence. It is remarkable that a child David’s age fought himself from breaking down, dissolving into tears and giving up hope for a better future. David constantly worked towards or rather survived because of a dream, a dream t hat he was a prince and that every...

Integration Of Umts And B-isdn: Is It Possible Or Desirable? :: essays research papers

Integration Of UMTS And B-ISDN: Is It Possible Or Desirable? INTRODUCTION In the future, existing fixed networks will be complemented by mobile networks with similar numbers of users. These mobile users will have identical requirements and expectations to the fixed users, for on-demand applications of telecommunications requiring high bit-rate channels. It will be necessary for these fixed and mobile networks to interoperate in order to pass data, in real time and at high speeds, between their users. But how far must this interoperation be taken? How much integration of the fixed and mobile network structures is needed? Here, a fixed network, B-ISDN, and a mobile network, UMTS, under development at the same time, are examined to see how well and closely they should work together in order to meet expected user needs. Work already taking place on this is discussed. BACKGROUND The Universal Mobile Telecommunication System (UMTS), the third generation of mobile networks, is presently being specified as part of the European RACE technology initiative. The aim of UMTS is to implement terminal mobility and personal mobility within its systems, providing a single world mobile standard. Outside Europe, UMTS is now known as International Mobile Telecommunications 2000 (IMT2000), which replaces its previous name of Future Public Land Mobile Telecommunication System (FPLMTS). [BUIT95] UMTS is envisaged as providing the infrastructure needed to support a wide range of multimedia digital services, or teleservices [CHEU94], requiring channel bit- rates of less than the UMTS upper ceiling of 2 Mbits/second, as allocated to it in the World Administrative Radio Conference (WARC) '92 bands. UMTS must also support the traditional mobile services presently offered by separate networks, including cordless, cellular, paging, wireless local loop, and satellite services. [BUIT95] Mobile teleservices requiring higher bit rates, from 2 to 155 Mbits/second, are expected to be catered for by Mobile Broadband Services (MBS), the eventual successor to UMTS, which is still under study. [RACED732] Broadband Integrated Services Digital Network (B-ISDN), conceived as an all- purpose digital network that will supersede Narrowband ISDN (N-ISDN or ISDN), is also still being specified. B-ISDN, with its transport layer of Asynchronous Transfer Mode (ATM) is expected to be the backbone of future fixed digital networks. [MINZ89] It is anticipated that, by the year 2005, up to 50% of all communication terminals will be mobile. [CHEU94] The Mobile Green Paper, issued by the European Commission in 1994, predicts 40 million mobile users in the European Union by 2000, rising to 80 million by 2010. This gives mobile users an importance ranking alongside fixed-network users. [BUIT95] One result of this growth in mobile telecommunications will be the increase in teleservice operations that originate in either the fixed or mobile network, but

Nell :: essays research papers

Nell 1) The loss of Nell's twin sister had a dramatic effect on her. Nell and May were raised in a secluded environment with no outside contact. As a result, May and Nell became very close emotionally and were an integral part in each others lives. When May died, Nell lost part of her life as well which resulted in vivid memory replay. A good example of this is when Nell was turning around in circles by herself but, in her mind, she was turning around in circles with her missing half. At the end of the movie, the evidence of the importance of May in Nell's life was still evident as Nell played will Jerry's daughter on the rocks that May and her once played on. The movie did portray what is generally believed about twins. The loss of one had a dramatic effect on the other. They had their own twin speech and their own games. At the end of 20 plus years, Nell still felt the loss of her twin sister.   Ã‚  Ã‚  Ã‚  Ã‚  2) The expert psychologist in the movie believed that Nell was mentally retarded and had made a small amount of intellectual development as a result of being raised in seclusion. Fortunately, they were wrong. The speech that Nell gave in the courtroom proved that she had developed intellectually. While the language that she used was different, Nell still gave a good list of very abstract ideas that someone who is mentally retarded could not possibly comprehend. Nell understood why she was different saying that she was raised in a small world and knew small things unlike the large things found in the city of Charlotte, N.C. This proved that Nell was very capable of living by herself and taking care of herself.   Ã‚  Ã‚  Ã‚  Ã‚  3) The experts, in the beginning of the movie, said that Nell was not capable of making the correct judgments to make in the world by herself. They did not believe that Nell had the wisdom to make the correct choices in life situations. It seemed evident to me that Nell already possessed more than enough wisdom to make it on her own. After all, she basically took care of her crippled mother all by herself.   Ã‚  Ã‚  Ã‚  Ã‚  4) Nell is not mentally retarded. Nell was raised in seclusion with her twin sister and a crippled mother. The things that Nell learned were obtained socially from a woman that had loss the use of part of her body. The body language that Nell had learned were obviously learned from observing her mother. For an outside viewer Nell must have looked like she was mentally