All About Old Growth or Virgin Forests

An old-growth forest, late serial forest, primary forest or ancient forest is a woods of great age that exhibits unique biological features. Depending on tree species and forest type, the age can be from 150 to 500 years. Old-growth forests typically contain a mixture of large live and dead trees or snags. Unharvested fallen tree logs in various states of decay litter the forest floor. Some environmentalists blame the dramatic loss of U.S. old-growth forests to exploitation and disruption by Euro-Americans. It is true that old-growth stands need a century or more to grow. How Will You Know You are in an Old Growth Forest? Foresters and botanists use certain criteria to determine old growth. Sufficient age and minimal disturbance are necessary to be classified as old-growth. Characteristics of the old-growth forest will include the presence of older trees, minimal signs of human disturbance, mixed-age stands, canopy openings due to tree falls, pit-and-mound topography, downed and decaying wood, standing snags, multi-layered canopies, intact soils, a healthy fungal ecosystem, and presence of indicator species. What is a Second Growth Forest? Forests regenerated after harvests or severe disruptions like fire, storms or insects are often referred to as a second-growth forest or regeneration until a long enough period has passed that the effects of the disturbance are no longer evident. Depending on the forest, to become an old-growth forest again may take anywhere from one to several centuries. Hardwood forests of the eastern United States can develop old-growth characteristics with several generations of trees existing in the same forest ecosystem, or 150-500 years. Why are Old Growth Forests Important? Old growth forests are often rich, biodiverse communities harboring wide varieties of plants and animals. These species must live under stable conditions free from severe disturbance. Some of these arboreal creatures are rare. The age of the oldest trees in an ancient forest indicates that destructive events over a long period were of moderate-intensity and did not kill all the vegetation. Some suggest that old-growth forests are carbon sinks that lock up carbon and help prevent global warming.

The Challenges Of Canadas Health Care System - 1845 Words

There are 196 countries with healthcare systems across the world†¦ Canada’s healthcare system is ranked 30th overall. Most critics keep health care related debates to the small scope of Canada and the USA. However, neither the USA nor Canada’s systems are ranked in the top 25 for overall efficiency (The Patient Factor). In order for Canada’s healthcare system to improve, there must be changes made in regards to major problems; financial aspects, timely access, and the doctor shortages. â€Å"Evidence shows that the best healthcare systems in the world are founded on a strong primary care system† (TheStar.com). Perhaps Canada can learn from these countries that are ranked higher, and provide more efficient care to Canadian citizens. Magnifying†¦show more content†¦This survey included over 3,700 physicians in eight different countries. The results showed Canada continuously had the lowest overall adaption rate; early adaption of technologies is a key element to sustaining healthcare systems (Williams). â€Å"Canada is a slow adapter of innovative technologies that could enhance the quality of health care services and improve the health and quality of life of Canadians† (Daniel Muzyka). There is plenty of evidence to validate that many Canadians are incorrect in believing that they have â€Å"the best healthcare system in the world†. Spending on healthcare in Canada continues to outpace the government spending program in growth and is limiting public investments in other areas that would make for an overall more effective society (Daniel Muzyka). Canada is the 10th highest spender, spending an average of $2,600 per Canadian per year. Recent studies by Brett Skinner have looked at trends in the annual growth rates for provincial healthcare expenditures and total government revenue. â€Å"He found that if recent trends persist, provincial government spending on healthcare will consume more than half of total revenues from all sources in six of 10 provinces by the year 2020† (Neil Stuart). Due to the over-spending factor and tight budgets, several healthcare institutions in Canada are cutting back costs any way they can. Specifically, inShow MoreRelatedComparing The Denmark Healthcare System And The Danish Healthcare Systems1199 Words   |  5 PagesIntroduction This paper attempts to highlight a general overview and compares The Danish Healthcare System and the Canadian Healthcare System organization frameworks. Additionally, the paper will review how the Danish healthcare system is financed and monitored, the healthcare coverage, and the responsibilities of government and the private sector in the system. 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A Study Of The Market Reforms In Post

A Study Of The Market Reforms In Post-Communist Eastern Europe With A Essay SpecificCase Study of PolandA Study Of The Market Reforms In Post-Communist Eastern Europe With A SpecificCase Study of PolandIntroductionPoland, as well as its fellow post-communist countries, face an arduoustask in re-inventing their economies to match the dominant Western stylecurrently dominating the world. The difficulties lie in the areas of ideology,structural needs (massive changes required), world recession(current) and debtload. Communist EconomicsWhy did the economics of the communist bloc fail so miserably? Why hasevery single socialist, fascist, communist and other non-democratic country hadto implement economic change in order to survive? This is due to some inherentproblems in the command economy idea. Monopolies (in a command economy) tend to produce inefficiency, lowquality goods, lack of innovation and technological improvement. Command economies tend to focus on growth rather than strength leadingto larger production and an evan. worse use of available resources. The 1980s marked a change in world markets meant that the communisteconomies were faced with four challenges that would, if met, have meant thecontinuation of the USSR. Resource saving miniaturization requiring high technology and skill weredemanded (command economies have neither), Flexible production to meet a varietyof needs (command economies have large factories to keep production high they,thus, did not have the funds or ability to affect the necessary changes to theirmeans of production), the information age meant that the communist bloc had todeny the new prevalent types of technology, which would spread Western ideas,and thus they fell behind), and software became essential to the growth ofindustry (the hardware focus of the East could not absorb this new approach. As well, the changes are being attempted in a deep period of economiccrisis that make an already difficult process even more difficult. Changing the EconomySystematic transformation requires institutional innovations, theinternal liberalization of the economy, the external liberalization and theadjustment of the real economy as well as the monetary system. Not only does there need to be a different institutional framework for amarket economy but one has to remove most of the inherited structures and tochange the typical behavioral patterns in industry, state and private households. PrivatizationPrivatization is a difficult task because of four main factors. Firmsizes in post-communist countries tend to be large. This means that theirdivision or shrinkage poses difficulties for foreign investors, they are however,not worthwhile at current sizes and must be reshaped. Expectations are runninghigh but attitudes ingrained in the workforce will need time to change. None ofthe structure exists to deal with private firms and must be created along withthe labor needed to run it. There is very little knowledge and certainty aboutthe property rights issue and until resolved investors will be wary of thesituation. However, not all countries have addressed the needed changes in the samefashion. Poland has been a leader in foreign investment and involvement whencompared to its post-comminist counterparts. Poland:Brief HistoryThe name Poland is derived from that of the Polanie, a Slavic peoplethat settled in the area, probably in the 5th century AD. Poland is a nation ineast-central Europe. In the 18th century it was divided up by its neighbors andceased to exist until resurrected in 1918. Again partitioned by Germany and theUSSR at the beginning of World War II, it was reestablished as a Sovietsatellite state in 1945, and remained a Communist-dominated peoples republicuntil 1989. Mikhail Gorbachevs appointment as Kremlin leader in March 1985 was thesignal that the Polish opposition had been waiting for. Exploiting the newliberalization in the region, Lech Walesa and Solidarity, Pope John Paul II andthe church hierarchy, and ordinary citizens stung by the deepening economicrecession combined to force the Communists to sit down at roundtable talks in1989. They secured far-reaching political concessions and exploited theresulting opportunities for political competition to drive the Communists frompowerThe new non-Communist government sought to bring about economic reformthrough shock therapy in a scheme devised by Finance Minister LeszekBalcerowicz. Introduction to Polish economic situationPolands fundamental economic problem is that production and livingstandards for its 38 million people is considered to be inadequate. With a GDPabout a third of the United States (on a per capita basis), Poland is consideredto be a middle income country. Crime And Punishment EssayDuring the 1970s, the Gierek government tries to tackle the problem (ofeconomic distress) through a policy of rapidly expanding consumption coupledwith investment financed by foreign borrowing. For several years this economicpolicy generated growth of about ten percent per year (The

Mergers and Acquisitions

Introduction In today’s competitive world, when globalization has taken the front seat in almost all parts of the world, the companies have to face enormous amount of competition. It helps organizations to avoid investing considerable amount of money in combating the competition. For avoiding unnecessary blockage of money into things, which do not lay any output for the firms, the companies these days resort to corporate restructuring processes.Advertising We will write a custom essay sample on Mergers and Acquisitions specifically for you for only $16.05 $11/page Learn More Corporate restructuring involve mergers and acquisitions. On the bigger picture, the mergers and acquisition leave lasting effects on the performance and fate of the company. A merger is the coming together of two companies to form one larger company. Such actions in the business world are normally voluntary and they will involve cash payment to the company that is targeted or even stock swap. There may be a stock swap, which is mostly used by many companies since it always has the provision of allowing the shareholders from both companies to share all the involved risks in the business deal. The merger often has effect on the earnings of the company as well as on their market goodwill. Hence, the price of the share is also affected. Whenever any company goes through phases of restructuring, the expected output could be either negative or positive. In a way, a merger may be similar to acquisition but in merging companies, the resulting company will always have a new name, which may be a combination of the companies’ names. Branding of the resulting company will purely depend on the marketing and political reasons. Thus as time continues to pass and competition tightens between companies competing for the same markets, the drive to merge will continue taking precedence. It should be remembered that the management of the companies plays a key role i n the discussion of choosing a merger as a right strategy. It has been noted that a key element in mergers is to increase the competitiveness of the new organization and bring about better fortunes. Major force driving this acquisition of merger between Merck’s and Medco Mergers increase shareholder value and attract accrual of gains to the target company. Among the benefits, include the benefits of economies of scale, attempts by companies to form oligopolies and monopolies thereby creating market power, and need for diversification. In essence, formation of mergers is attributed to waves in an industry, prompting different companies to react by uniting and clustering to enhance their survival. The failure of the efficient market hypothesis gives rise to acquisitional takeovers, in which companies strive to increase their market power by accumulating material, financial, and human resources.Advertising Looking for essay on business economics? Let's see if we can help y ou! Get your first paper with 15% OFF Learn More Mergers are largely associated with increased shareholder value and company profitability, usually through expansions, diversifications, and cost savings (Gugler, Mueller, Yurtoglu and Zulehner, 2003). By using share values for the merged companies before and after the mergers, the researchers report that most of such mergers result in increased share value, implying that the wealth of the shareholder and the value of the company in the eyes of investors have increased. However, the value of shares of the acquiring firm and those of the target firm differ in relation to market conditions and public perceptions regarding the merger (Hunt, 2009 pp. 5). Returns on the mergers differ from company to company, with value firms reporting higher returns on average compared to growth firms (Frankel, 2005, pp. 153). The variations in returns on the mergers result from varying degrees of risks, and investor forecasts in relation to prev ious company performance. Similarly, the researchers attribute differences in company profitability following the mergers to different accounting and reporting practices, and the variation in industrial shock waves necessitating the mergers. Identifying the actual benefits resulting from mergers is challenging, since it is difficult to identify underlying sources of gains from mergers, and studies suggest that all benefits associated with the mergers accrue to the target firm shareholders (Andrade, Mark and Erik, 2001 pp. 106). As such, it would be difficult to establish the actual benefits resulting from mergers. Companies form mergers to increase their competitiveness by accessing a wider market, new skills, and technologies. With globalization, it is extremely difficult for a pharmaceutical company to succeed on its own. By forming mergers, companies can access new markets, new products, and extra finances. However, mergers are not always successful unless both parties are benefi tting. An effective merger must ensure that both parties derive benefits from it. Once a company enters into a merger, it may loose its sovereignty. This means that the company cannot get out of the merger in the future even if it has resolved its financial difficulties. It is therefore important to maintain independence so that if the merger fails to succeed, the companies can part ways and continue their operations as independent companies. Negotiators must always act in the best interest of the shareholders because it is their responsibility to ensure that they maximize the profits of the shareholders. If only one party is benefitting, the losing party should then not sign the deal. The parties should instead go back to the negotiating table and create a deal that increases the net value of both parties.Advertising We will write a custom essay sample on Mergers and Acquisitions specifically for you for only $16.05 $11/page Learn More The most general reason for the success of merger and acquisition is that many firms try to overcome concentration risk. Firms, which are excessively dependent on a single product, are exposed to the risk of the market for that product. Diversification by way of merger and acquisition reduces such risk. In addition, firms often use merger and acquisition as a strategy to enter into new market or a new territory. This gives them ready platform on which they can further build their operations. Tax shield is one another aspect of consideration. Tax shields play an important role. Firms in distress have accumulating past losses and unclaimed depreciation benefits on their books. A profit making taxpaying firm can derive benefit from these tax shields. They can reduce or eliminate their tax liability by benefiting from a merger of these firms. In some countries, tax laws do not permit passing of such tax shields to the acquiring firm except under specific circumstances (DePamphilis, 2009). From the case , the merger was meant to provide market for their products. The Executive Vice President, Sales Marketing believed that a merger was going to open up new markets that are in the managed health care market. Medco’s had kept marketing database which was going to be used to l create market expansion opportunities. However, the Chief Operating Officer did not consider benefits but thought of effects of cultural and operational differences. The merger was the right strategy because it would solve the problems that the two companies were facing. Merging the two companies would create a company that transcended national borders thus increasing sales. A merger is the most efficient way to enter a new market or increase distribution line. The company can respond to competitive cost pressures through economies of scale. For Merck Company, the merger would reduce marketing cost by $1billion and expand sales while Medco would be able to penetrate the American market and gain financial support. However, the merger failed to materialize because the two companies could not agree on the terms of control. Merger is an important business approach that is directed towards expanding the business (Gugler, Mueller, Yurtoglu and Zulehner, 2003). Merger may help an organization to increase its monopoly power on one hand, through increasing its economies of scale and scope and on the other, it may complicate its operational procedure and destroy inter and intra departmental harmony through increasing its size beyond manageable level.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Actually, merger is not a mathematical cloth that will always yield two by the summation of two one. Success of merger depends upon extreme managerial proficiency, nature of the product and market as well as the customer’s psychology immediately after the merger. It has been observed that in financial sector, when two banks merge, the credit deposit ratio incurs a set back. It might affect the rate of profit negatively. Therefore, it may be concluded that the outcome of merger is always uncertain and if it fails to generate substantial positive outcome, the stockholders of the respective organization might suffer a loss. Synergies of the merger The merger agreement was expected to provide an opportunity to Merck Company to increase market share in the industry as a leader and the highest revenue earner and with the highest market capitalization. Market growth was a major ground behind this acquisition the company wanted to ensure an increasing share in the managed care. This will ensure the growth of company earnings. There may be elimination of overlapping management and consolidation of business support functions. The benefits of the merger are witnessed through the company’s ability to adjust to market demands and the large market share attained through the merger. In the long term, the merger is likely to be beneficial to the companies due to the increment in revenues and overall cost saving. Merging makes it cheaper for companies to access materials from suppliers, and can get such materials at a discount due to the economies of scale. This is beneficial in the long-term performance of the company since it leads to more savings, hence more investment and overall increased profitability. The benefits of mergers are usually traced to shareholders and company performance, and these are derived from the value of shares. The merger turned company into one of the largest employers and is expected to increase the company’s revenue both in t he short term and in the long term. Following the positive changes in the company’s share value, the merger supports the existing literature on the claim that mergers increase shareholder value and company profitability. Additionally, the merger follows the observation that investors use a company’s previous performance record to predict a merger’s future performance (DePamphilis, 2009). The ratio of exchange When a firm trades its stock for the shares of another firm, the number of shares of the acquiring firm must be determined. The first requirement, of course, is that of the acquiring company have sufficient authorized and unissued and/or treasury stock ordered to complete the transaction. Often the repurchase of shares, is necessary in order to obtain sufficient shares for the transaction. Since the acquiring firm is generally larger and has a market for its shares, the acquiring firm offers a certain amount for each share of the acquired firm. This amount is generally greater than the current market price of publicly traded shares. The actual ratio of exchange is merely the ratio of the amount paid per share of the acquired firm to the market price of the acquiring firm pays the acquired firm in stock, which has a value equal to its market price. However, price has been stated of $ 6.6billion for acquisition of Medco Containment Services Incorporated. Benefits of merger The two companies will experience exponential growth in market share, since they end up dealing with a bigger organization than they did before. They also gain from an expanded network, which literally means dealing with more people and thus gaining more contacts with Medco’s database. This is a good prospect for business expansion. The benefit in the long run to the shareholders is that they can gain when the merged company does grow as profit margins increase. This happens when the new firm finally settles into business and gains new ground by benefiting from the cost cutting measures. Among the gains of the employees are that those who survive usually end up working for higher wages once the merger picks up and the gains begin to be seen. Higher pay packages are offered them, they experience, and exciting career growth provided that the merger is successful. This offers them greater opportunities and personal development prospects than they had before. There is a better prognosis for career advancement. Promotion means handling more people over a larger scope. This increases the gains that go with career advancement (DePamphilis, 2009). Even then, loyal consumers, especially the corporate ones are always considered when major decisions are being made. They are the ones who keep the companies going in the lean times, and with time, the companies learn that rubbing such customers the wrong way is economic suicide. Therefore, they do not emerge as losers even in a merger. The main advantage to consumers is the improvement in quality that results from the outstanding features of each individual company’s products being consolidated into one better whole. Apart from that, the consumer benefits from wide ranging products over and above what they had in the individual company before, especially in areas where only one of the partner companies was represented. Competitive reactions to Merck’s acquisition of Medco After Merck announced intention to merge with Medco competitors reacted quickly by merging with companies, which were vertically in their supply chain. British drug maker SmithKline Beecham planned to merge with Diversified Pharmaceutical Services Incorporated, at $2.3 billion while Roche Holdings Limited announced plans acquire Syntax Corporation. One year later Eli Lilly and Company intended to acquire PCS Health Systems from McKesson Corporation for $4 billion. Conclusion Mergers may have some economies of sale and scope, it is not materialized in every case, and hence there may be failures. Aga in, the benefits or synergies may take some time to reflect and it is usually reflected first in the value of the combine firm as against the sum of values of independent firms. In case of acquisitions, it is important for the bidding firm, which is the combined firm after the deal is complete, to perform well and show an improvement in valuation. References Andrade, G., Mark M. and Erik S. (2001). â€Å"New Evidence and Perspectives on Mergers.† Journal of Economic Perspectives 15, no. 2 (2001): 103–120. DePamphilis, D., (2009). Mergers, Acquisitions, and Other Restructuring Activities: An Integrated Approach to Process, Tools, Cases, and Solutions. London: Academic Press. Frankel, M. (2005). Mergers and acquisitions basics: the key steps of acquisitions, divestitures, and investments. San Francisco: John Wiley and Sons. Gugler, K., Mueller, D., Yurtoglu, B. Zulehner, C. (2003). â€Å"The effects of mergers: an international comparison.† International Journal of Industrial Organization 21, no. 2003 (2003): 625-653. Hunt, P. (2009). Structuring Mergers Acquisitions: A Guide to Creating Shareholder Value. New York: Aspen Publishers Online. This essay on Mergers and Acquisitions was written and submitted by user Rylie A. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here. Mergers and Acquisitions Introduction Mergers and acquisitions (MA) help a firm to grow by venturing into new markets. Mergers are a combination of two or more companies who join together to achieve some strategic or financial objective (Sherman A. et al 2006).Advertising We will write a custom essay sample on Mergers and Acquisitions specifically for you for only $16.05 $11/page Learn More Acquisitions involve the purchasing of assets or shares of a company in order to have control of that company (Sherman A. et al 2006). M A can take place peacefully or can sometimes be a difficult process for the companies involved. Having given the definition of MA, this report focuses on how they develop and the reasons why companies pursue MA. Then focus will be made on the types of MA along with the threats and opportunities. This report will further examine the factors that affect MA with the support of real cases. Finally a conclusion will be drawn from the research. Trends of mergers a nd acquisitions In the 1970s, there was increased formation of MA. This trend was persistent and resulted in increased, globalisation. Firms are incorporating the concept of internationalisation in their operation. The current boom with regards to MA in the 21st century has similarities with older conglomerations of the 1990s. However, the trend has affected firms in economic sectors (Hijzen et al 2008, p. 852). The financial markets are no longer the major factors in determining formation of mergers or acquisitions. Furthermore, there is a cause to believe that the current surge is progressed by strategic choices of businesses in light of opportunities offers by the economic prowess.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Most cross-border MA are mostly experienced in the same industry with few variations where new investors are involved. Reasons for acquisitions/mergers The prima ry motivation for coming together or purchasing another business has been to ensure creation of corporate profits hence maximising the shareholder’s value (Bà ¶secke, 2009, p. 46; Campa Hernando, 2004, p. 56). In addition, firms also enter into strategic alliances (business relationship between 2 or more parties with the objective of attaining a critical business objective such as acquire the skilled employees, products and intellectual property). Companies such as Googles, Cisco and Yahoo have all formed acquisitions over the years. MA may also take place because of a rapid change in technology, fierce competition, changing consumer preferences, control costs and a reduction in demand (Sherman A. et al 2006). This means that a company cannot keep up with the changing situation and thus, it resorts to this measure. In addition, firm’s share all the risks involved. However, the individual firm’s remain independent. When venturing in to new markets companies enc ounter problems. Cultural Factors Affecting M A When firms from different national origin interact through MA, they are bound to experience very different and incompatible cultural characteristics (Alvesson, 2002 p. 74). Cultural differences are major components to be considered because cultural clash is considered to be a major obstacle that often causes failed MA (Hà ¤kkinen et al 2004, p. 28).Advertising We will write a custom essay sample on Mergers and Acquisitions specifically for you for only $16.05 $11/page Learn More Various studies have revealed that the existence of cultural differences in different companies greatly contributes to failure of MA (Alvesson 2002, p. 76). In the process of implementing MA, managers assess the key cultural differences that exist in the merging/aquiring firm (Marmenout 2008, p. 75). To reduce the cultural differences interference with synchronization, managers are encouraged to have mergers with firms operating in the same industry. Analysing cultural differences will aid in increasing the probability of the merger succeeding (Mercer 2006, p. 134).This arises from the fact that the necessary harmony in the merger is established (Sudarsanam 2010, p. 135). Culture conflict translates into misunderstanding in the firm (Gitelson et al 2004, p. 1). , Hence, the merging firms experience inefficiencies and time wastage (Frensch 2007, p. 112). A number of aspects such as valuable resources, employee benefits, decision-making process, communication and measures are affected (Gertsen et al 2004, p. 123). Therefore, there is a need to establish harmony among a new firm since cultural differences can affect the synchronization process and hence reduce the intended synergy. The degree of complexity in M A is high if two countries are involved due to cross-cultural disparity. Despite MA involving firms in the same industry being easy, the workforce could respond to comparable situations in a completely different way (Mercer 2006, p. 134). Therefore, consideration of cultural differences prior to the merger is necessary (Gitelson et al 2004, p. 123). Firms should also conduct harmonisation of the MA which entails ensuring that their operation strategies are similar. Strategies of harmonization are very critical for managing cultural differences. To achieve this, an efficient communication within the organisation should be adopted to minimise chances of resistance (Gitelson et al 2004, p. 123).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Other disadvantages of MA Apart from cultural differences, other disadvantages relate to attainment of a bad reputation. This mainly occurs if one firm acquires a firm which has a negative publicity. This may have a significant effect in the success of the new entity established. Thus, the management team should conduct a comprehensive analysis of the potential partner so as to determine the reputation it has established. In addition, the firm may experience diseconomies of scale. This arises from the fact that the firm may grow in its size leading into an increment in unit costs. MA may also result into a decline in the employees’ level of motivation because some employees especially those in the management level may be rendered redundant. MA may also result into conflict of objectives between the two firms. The resultant effect is inefficiency in the firm’s operation. Cross-Border MA MA involve are formed with a common goal of sharing resources in order to achieve a particular goal. Sharing resources means that each firm benefits from the resources of the other firm and the new firm established is able to attain synergy (Sudarsanam 2010, p. 138).. For example, one party may have a skilled human capital while the other may have adequate financial resources. A cross border M A entails two firms that operate in two different national economies or two companies that operate in the same economy but they belong to different host nations (Andrade et al, 2001, p. 106). Global Trend According to Hijzen et al (2008, p. 852), the high rate of globalisation is forcing firms to incorporate the concept of internationalisation. Other factors include increased deregulation, corporate restructuring and privatisation (Marmenout 2008, p. 75). Understanding the threats and opportunities of cross-border is essential in M A activities and the nature of global strategy. Formation of cross-border MA is costly (Bruner, 2004, p. 89). The price being offered is a criti cal determinant of the success of the acquisition, there is no intrinsic reason why that can cause failure for the properly-conceived strategic mergers. Evidence gives quite contradictory outcomes. For instance, the BP and Mobil merger was aimed at gaining market power by competing with other larger oil corporations in the market and to cut down significant expenses through elimination of duplicate facilities, reducing work force and other overheads (Carleton et al 2004, p. 103). Some mergers may not have significant integration problems, it seems that it had a strong strategic logic and it’s regarded as a blueprint for other similar ventures among rival firms like Amoco and Shell. It is also quite unusual strategy because, the merger only consolidated market resource in Europe but the firms remained rivals in other places. Theories for International Expansion There are three theories that offer probable reasons why firms expand their businesses to the global market (Madura, 2006, p. 56). They include comparative advantage, product cycle and imperfect markets theories. The internalisation theory has also been highlighted by several researchers. Comparative advantage theory purports that a company/ country has a totally different comparative advantage of producing when it is able to run a cheaper production with minimal opportunity cost compared to other firms or countries (Finkelstein, 2009, p. 109). Thus, western nations invest in China due to its large population, China a source of cheap labour and market; however, it has had a totally different cultural background making integration very challenging (Finkelstein, 2009, p. 109). This theory further explains that the two firms engaged in MA could draw great benefits from each other because of these cheap production process and free trade. For example, Fresenius Kabi acquired APP pharmaceutical company to enter into the American market and supply generic drugs to US and Canada. Through the acquisition, Fresenius Kabi expanded its operation hence becoming a global leader of IV generics status (Mullin, 2008, p. 9). Other important examples of comparative advantages include the emerging economies that have great advantage in certain fields (Frensch, 2007, p. 212). Brazil has an advantage of investing in bio-fuels, Russia in energy, while Indians have captured the information technology industry and taking it to a very competitive level (Hoskisson et al, 2000, p. 454). China as a new strength in the economy enjoys comparative advantage of manufacturing, where most of products are made in china because of availability of cheap labour (Hoskisson et al, 2000, p. 455). Imperfect market theory asserts that countries are usually differing with the amount of resources that are accessible for production. These resources are not transferable to another country in a cheaper way or freely (Hoskisson et al, 2000, p. 458). This means that there could be a lot of obstacles and expenses that are att ached to the transferring factors for production. In essence, if there were no such barriers or if the factor were transferable without restrictions, then there won’t be comparative cost advantages hence there will be no reason for the international or cross-border MA (Chari et al, 2004, p. 126). Market imperfections help cross-border MA to grow and exploit international transactions which would be purely for domestic industries (Rossi Volpin, 2004, p. 278). Product cycle theory purports that whereas a company will initially produce products and services that are able to satisfy the demand in the domestic country, with time, the market becomes mature and saturate. This may force the firm to expand its market in the foreign market (Rossi Volpin, 2004, p. 278). This explains why firms are very innovative. It’s through such dynamics that Big Pharma was motivated to acquire Biotech in order to venture into new drugs and equipment after its patent expired. Basell acquisit ion of Lyondell chemicals led to growth in the size of the firm (Salmon, 2010, p. 27). The firm was able to improve its market position by diversifying its operation and also to attain economies of scale. Internalisation theory explains that when MA enables a company to exploit the benefits of intangible assets like branding, management skills, marketing strategies, patents, superior expertise and goodwill (Chari et al, 2004, p. 129). These assets are influenced by the size of the business. They also have immobility and limited information and basically founded on proprietor information (Rossi Volpin, 2004, p. 279). Such obstacles can be bypassed by engaging in cross-border deals hence gaining access to these intangible assets and consequently increasing shareholder value (Campa Hernando, 2004, p. 56). Studies have found that many takeovers in this perspective are mainly those in the research and development business (Guillà ©n, Tschoegl, 2008, p. 123). Target valuation The valu e of MA from the value creation impact of the target firm capital and profitability are implicit in value and there is goal difference between the goals of net assets value. From the financial results, MA following a merger value creation entail the increase in the net current cash flow value. From a corporate MA viewpoint, analysis of MA value creation from the merging firms’ net asset value, via an analysis and evaluation of the target firm’s intrinsic value, the MA value synergies developed to determine the acquisition value creation can be attained. The target firm in the value of the M A process of value creation can be addressed at three levels of synergy. Net asset value: together with profits from ongoing operations to changing the enterprises capital increase, the formation of accumulating capital, this accumulated capital is invested business on the basis of long-term business formation in the past. Target firm MA price is evaluated from the current enterpri se, future profitability and growth as determined by the inherent value, value added acquisition synergy and firm growth option value. Target Company’s Value: the acquisition seeks to pursue the objectives of the undervalued firms. It’s important to determine the target firm’s inherent value and then make comparison with the market. Growth option value: M A returns when the target firm has indicated rising trend, meaning that the value has a call option and future growth of M A income can be brought. The value of synergy Target firm: MA to create value via collaboration and bring together resources, knowledge for enhancing combined value of the MA on both sides. Many cross-borders mergers face serious difficulties in the process of integration after the merger or acquisition (Hà ¤kkinen et al, 2004, p. 32). The new firm has to undertake a number of activities so as to attain synergy (Carleton et al 2004, p. 103). Through effective integration, M A can succeed in the long term (Olie 1990, p. 206). Cross-Border Merger/Acquisition obstacles A number of legal requirements have to be met in cross-border mergers. As a result, the acquiring firm can be disadvantaged or hampered by lack of crucial information and the legal incompatibility (Olie 1990, p. 208).Sometimes, the legal structures frustrate organisations’ M A. These restrictions are not restricted to cross-border mergers but they explain the failure of M A (Vasconcellos et al 1990, p. 174). An example of legal barriers is evident in China where the government introduced a regulation on monopolies limiting the probability of entering into the market by foreign firms. Tax barriers are another obstacle which governments impose to cross-border mergers. Despite efforts by managers to ensure smooth transition process, taxation matters are usually problematic (Arnold 2002, p. 145). This is because these issues are usually dealt with domestically and they are sometimes not clear exhau stive to determine the effect of tax of the international M A (Vasconcellos et al, 1990, p. 178). Such impediments require seeking expert consultation services or special agreements with tax agencies on these grounds. Cross-border mergers could expose gaps or weaknesses in the regulatory framework thus making the regulatory bodies inadequate or uncertain on how to carry out the process of merger thus causing delays (Vasconcellos et al 1990, p. 179). Economic barriers, such as fragmentation of equity markets can impose extra transactions expenses on cross-border M A (Arnold 2002, p. 145). For example, the share mechanism can be intricate and costly when the merging firms are listed differently on the stock markets. The extra costs could influence the bidder on the kind of deal to get into (Sudarsanam 2010, p. 138). In addition to these barriers, there would also be differences of member state that would demand differentiated approach adoption. The differentiated approach has very l ittle information available on value-based process. With regard to the attitudinal barriers, some of the member states support ‘National Industrial Policy’ openly or surreptitiously, targeting to become domestic national champions. Among possible justification, some could argue that these types of policies could ensure more finances for the national economy. Political issues could also affect privatised firms that have in the past received public money hence cross-border mergers can be blocked (Cartwright Cooper 2000, p. 112). In the European banking sector, companies are seeking to consolidate their market position in the domestic arena before they make the strategic move in response to formation of single market and also introduction of single currency. Merging in this view is often differentiated because of specific development is individual nations (Vasconcellos et al 1990, p. 174). The following example is about a cross border acquisition of two banks from differe nt countries: Cross border Acquisition of the Royal Bank of Scotland with ABN AMRO In 2007 the Royal Bank of Scotland was involved in the Europe’s biggest cross border banking deal (F.T, 2011). ABN AMRO, a Dutch bank was acquired by the Scottish bank after having competing against Barclays. This was supposed to be an effective deal which was intended to cause rapid growth and global domination (Wilson H at el, 2011). They intended to make savings on the stationery bill and shared computer software (Hosking P, 2008). However, this was not the case. This type of cross border acquisition has been used to explain the consequences of a deal which produces negative results within a year. As stated not all acquisitions are successful. This deal had a liquidity impact on RBS in particular to its capital ratios. This was a costly deal for them. Also the ABN’s staff were concerned of the RBS management attitude, this reflects cultural differences in workers/managers. Finally in 2009, the ex boss of the Royal bank of Scotland, Sir Tom McKillop pointed out that the takeover of ABN Amro was a â€Å"bad mistake† (Duncan H., 2009). Conclusion From the analysis, it is evident that there are a number of factors which motivates firms to consider forming MA. Factors relate to the high rate of globalisation, increased privatisation and economic liberalisation. In addition there are a few theories which explain why firms expand into the international markets. These include the comparative advantage, product cycle, imperfect markets and the internalisation theory. However, MA are faced with numerous challenges, cultural differences etc which limit the probability of success such as RBS faced. MA may result into diseconomies of scale as a result of increment in the size of the firm. The employees’ level of motivation may adversely be affected limiting the firm’s operational efficiency. In addition, legal, political, and economic barriers are associ ated with MA. All these restrictions cause uncertainty of future trade and cash flow and this in turn affects asset value and therefore poor performance. However, various economies are considering forming trading blocs so as to harmonize these issues and allow free trade. In most cases, the target value of MA relate to increasing the net assets value, attain a high growth and to attain synergy. Reference List Alvesson, M., 2002, Understanding Organizational Culture. New York: Sage, pp. 74-76. Andrade, G., Mitchell, M., Stafford, E., 2000. ‘New Evidence and Perspectives on Mergers,’ Journal of Economic Perspectives 15, pp. 103–120. Arnold, G., 2002, Corporate Financial Management. 2nd Ed. Harlow: Prentice Hall. Bà ¶secke, K., 2009, Value Creation in Mergers, Acquisitions, and Alliances. Wiesbaden: Gabler Verlag. Bruner, R. F., 2004, Applied Mergers and Acquisition, Stockholm: Rutledge Publishers. Campa, J. M. Hernando, I. 2004, ‘Shareholder Value Creation in European MAs,’ European Financial Management, Vol. 10 (1), pp. 47-81. Carleton, R. J., Berry, C. S., 2004, Achieving Post-Merger Success: A Stakeholder’s Guide to Cultural due Diligence, Assessment and Integration. New York: John Wiley Sons. Cartwright, S., Cooper, C., 2000, HR Know-How in Mergers and Acquisitions. London: Institute Of Personnel and Development. Chari, A. Ouimet, P. Tesar, L. 2004, Cross Border Mergers and Acquisitions in Emerging Markets: The Stock Market Valuation of Corporate Control, EFA 2004 Maastricht Meetings Paper. No. 3479. Duncan H., 2009, Ex-RBS boss holds up hands to ABN takeover – admitting it was a ‘bad mistake’, Mail online. Web. Finkelstein, S., 2009, Advances in Mergers and Acquisitions. New York: Emerald Group Publishing. Frensch, F., 2007, The Social Side of Mergers and Acquisitions: Cooperation Relationships after Mergers and Acquisitions. Sydney: DUV FT 2011, ABN Amro takeover battle, Financial Times. We b. Gertsen, M. C., Torp, J. E., Soderberg, A. M., 2004, Cultural Dimensions of International Mergers and Acquisitions. Sydney: Prentice Hall. Gitelson G., Bing, J. W., Laroche, L., 2004, The Impact of Culture on Mergers and Acquisitions. New York: ITAP International Incorporation. Guillà ©n, M. Tschoegl, F. (2008). Building A Global Bank: The Transformation Of Banco Santander, Princeton, NJ: Princeton University Press. Hà ¤kkinen, L., Norrman, A., Hilmola, O., Ojala, L., 2004. Logistics Integration in Horizontal Mergers and Acquisitions. International Journal of Logistics Management, Vol. 15 Issue 1, pp. 27 – 42 Hijzen, A., Gorg, H., Manchin, M., 2008. Cross-Border Mergers and Acquisitions and the Role Of Trade Costs. European Economics Review, Vol. 52, Issue 5, pp. 849 – 866 Hosking P. 2008, RBS remains upbeat after ABN Amro deal, The Times. Web. Hoskisson, R. E., Eden, L., Lau, C. M., Wright, M. 2000. ‘Strategy In Emerging Economies,’ Academy Of Management Journal, 43: 249-267. Madura, J., 2006. International Financial Management, 8th ed., Thomson South-Western, Mason, Ohio. Marmenout, K., 2008. Getting Beyond Culture Clashes: A Process Model of Post-Merger Order Negotiation. Montreal: McGill University. Mullin, R. (2008). Generic Drugs Germany’s Fresenius Will Acquire Heparin Leader APP Pharmaceuticals, Chem. Eng. News, 86 (28), p. 9. Olie, R., 1990. Culture and Integration Problems in International Mergers and Acquisitions. European Management Journal, Vol. 8, Issue 2, pp. 206-215. Rossi, S. Volpin, P. 2004, Cross-country Determinants of Mergers and Acquisitions, Journal of Financial Economics, 74: 277-304. Salmon, J. (2010). The Rise and fall of Corporate America, Victoria: Trafford Publishing. Sherman A. Hart M., 2006, Mergers acquisitions from A to Z, American Management Association, second edition, printed in the United States of America. Web. Sudarsanam, P. S., 2010. Creating Value from Mergers and Acquisit ions. Harlow, UK: FT Prentice Hall. Vasconcellos, G. M., Madura, J., Kish, R. J., 1990. An Empirical Investigation of Factors Affecting Cross-Border Acquisition: The United States vs. United Kingdom Experience. Global Finance Journal, Vol. 1, Issue 3, Pp. 173-189 Wilson H., Aldrick P., Ahmed K., (2011), Royal Bank of Scotland investigation: the full story of how the ‘world’s biggest bank’ went bust, The telegraph. Web. This essay on Mergers and Acquisitions was written and submitted by user GwenStacy to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here. Mergers and Acquisitions A merger refers to a situation where two or more companies unite to form a single company and this kind of bonding is found among medium sized and small companies. Acquisition occurs when one company is bought by another one. These two aspects are meant to promote growth of the companies involved. This paper addresses the various mergers that took place in United States and their effects.Advertising We will write a custom research paper sample on Mergers and Acquisitions specifically for you for only $16.05 $11/page Learn More Let us take a look at the merger that took place in the banking industry in the year 2004 between the Bank of America corp. and FleetBoston Financial corp. In this merger the bank of America corp. acquired the ownership of FleetBoston financial corp. This means that the company that was bought existed under new ownership and as a result its identity was changed to resemble that of the bank of America corp. (Straub, 2007) A cross ch eck on the history of FleetBoston suggests that the bank had successfully merged with another financial institution known as BankBoston and its previous identity was fleet financial group. The history of FleetBoston indicates that this is not the last merger that’s happening involving FleetBoston. This shows that the management of this organization is determined and will do anything just to make sure they remain operational with a wider customer base. The bank of America had also entered into a merger which had seen it grow tremendously and since it was ranked third in US it had the required base to buy the FleetBoston bank. The bank of America also had a failed merger with a stock brokerage institution known as Merrill Lynch in 2008.The merger seemed attractive on paper but on the ground it was very tough. According to Depamphilis (2008), the bank of America lost many customers after acquiring the ownership of the stocks brokerage firm because the existing customers had pers onal relationships with the employees of the outgoing owners; people can not trust people who are not known to them. This loss of clients happened because the bank of America could not retain the organization culture of the outgoing Merrill. Before an acquisition takes place there are a few things that the new owner to be should consider and they are namely (1) asset assessment, (2) historical earnings, (3) future maintainable earnings assessment, (4) comparable company and comparable transactions and (5) discounted cash flow assessment.Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More These factors are used to determine the cost of acquisition (Depamphilis, 2008). In this case the cost of buying FleetBoston was 47 billion. The above stated factors were important and remain like so because by acquiring the ownership of FleetBoston the bank of America was going to bear all the losses that were being incurred by the bought company and besides it had to take the unknown risks. In the final end the FleetBoston was no more because its shares were now owned by the bank of America. Straub (2007) argues that there are various reasons for mergers and acquisitions. First, merging companies reduces the cost of operations as opposed to when the companies are being run as independent entities. This results in rise in company proceeds because there are several sellers of goods and services hence the union causes the group of companies to have an upper hand in business. When a smaller company buys a bigger company it stands to raise its proceeds and also improve its market share. This is because the acquired company could have managed to gather many customers and hence the new owners do not need to look for new customers. Acquisition promotes cross trading because the incoming company can sell its products and services to the existing customers of the outgoing owners. For in stance if a company that deals with insurance brokerage was bought by a company that sells automobiles the customers of the insurance company can buy automobiles from the new owner of the company. An example in Information Technology industry involves the case of Google when it purchased Like.com in August 2010 for almost $100 million with an aim of improving the IT infrastructure of Boutiques.com. Google integrates managers, websites, employees, network, and data in driving its IS strategy. With its newly implemented e-commerce site, Boutiques.com, Google seeks to widen its market base by offering customers new ways of searching and purchasing clothes and accessories (Efrati Morrison, 2010). According to Harwood (2006) companies that make huge proceeds can buy companies that make less or no profits in order to capitalize on their taxation which is normally subsidized. This trend was very common in the US until recently when the government implemented a policy that prohibited large companies from buying companies that are operating at a loss. Company mergers and acquisitions usually have negative impacts on the management. This is because when a company acquires ownership it lays of some of the employees of the previous owner.Advertising We will write a custom research paper sample on Mergers and Acquisitions specifically for you for only $16.05 $11/page Learn More This could affect the performance of the company and thus reduce its productivity because the new management team may not follow the legacy of the previous management team. Since the remaining employees were used to the leadership strategies of the previous managers they would take much time to get used to the new leadership strategies. When a deal involving a merger and acquisition is being closed the parties have to agree about which brand name should be used. There are several suggested options. First, the weaker brand name can be done away with and it can be replac ed by the popular brand. Secondly the parties can do away with their respective brand names and develop a new brand. In some mergers the parties may opt to retain their identities and thus use them simultaneously. Therefore, instead of relying on creating mergers, companies should find new strategies of penetrating into upcoming markets because success in business comes after a business have held on to its position after others have left. In business world the ups and downs are part of life. References Depamphilis, D. (2008). Mergers, Acquisitions, and other Restructuring Activities. New York: Elsevier, Academic Press. Efrati, A. Morrison, S. (2010). â€Å"Google Jumps Into Fashion E-Commerce.† The Wall Street Journal. 18 November 2010. Retrieved from https://www.wsj.com/articles/SB10001424052748703688704575620840174153292 Harwood, I.A. (2006). â€Å"Confidentiality constraints within mergers and acquisitions: gaining insights through a ‘bubble’ metaphor† . British Journal of Management 17(4):347-359. Straub, T. (2007). Reasons for frequent failure in mergers acquisitions: A comprehensive analysis. Wiesbaden: Deutscher Universitasverlag.Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More This research paper on Mergers and Acquisitions was written and submitted by user Dirty Parrot to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Writing Tips Metaphors and Similes - Get Writing Tips with Proofed!

Writing Tips Metaphors and Similes - Get Writing Tips with Proofed! Writing Tips: Metaphors and Similes Metaphors and similes are common in creative writing, and both use comparisons to tell us something about the world. However, there are some important distinctions between the two. So, before you dive into the seas of literature, let us offer the life jacket of knowledge as we explain the differences between metaphors and similes. We will apologize in advance for all the nautical imagery, but we do enjoy a theme. What Are Metaphors? Metaphors are words or phrases applied in a non-literal way to make a comparison. For example: The winter sea was a dark blue wasteland stretching to the horizon. Here, the metaphor is calling the sea a â€Å"dark blue wasteland.† The sea is not literally a wasteland; if it were, it would be considerably drier. However, by making this comparison, we can suggest that the winter sea shares qualities with a wasteland (e.g., being inhospitable and empty). The essence of a metaphor is that, even though it is not literal, it is stated as if it were. It is not just a comparison: We are saying that the sea is a wasteland, which looks like a literal statement on the surface, so we have to know that it is a metaphor before we can understand it. Metaphors are common in poetry and literature, but they’re also in some everyday phrases. If we say we are â€Å"all at sea,† for instance, we mean that we’re confused, not literally that we are lost on the ocean! Even the term â€Å"table leg† is technically a metaphor, since â€Å"leg† originally applied to limbs only, but it so common now we don’t even notice it. It is therefore known as a dead metaphor. What Are Similes? While metaphors involve suggesting that something is something else, similes are more modest. If we use a simile, we are only saying that something is like something else. For example: The sky rumbled like an argument in the heavens. Here, we’re not suggesting that there was actually an argument going on; we are simply saying that the thunder reminds us of an argument. Similes therefore use terms such as â€Å"like† or â€Å"as if† to indicate they are not literal (e.g., â€Å"the wind seemed angry† or â€Å"we ate as if we were starving†). Metaphors vs. Similes Ultimately, you don’t need to know the differences between metaphors and similes to use them. However, knowing this is essential if you’re writing about literature for a college paper! Remember: A metaphor involves claiming that something is something else to make a comparison A simile only involves claiming that something is like something else

Emperor Montezuma Before the Spanish Arrived

Emperor Montezuma Before the Spanish Arrived Emperor Montezuma Xocoyotzà ­n (other spellings include Motecuzoma and Moctezuma) is remembered by history as the indecisive leader of the Mexica Empire who let Hernan Cortes and his conquistadors into the magnificent city of Tenochtitlan virtually unopposed. Although it is true that Montezuma was unsure of how to deal with the Spaniards and that his indecision led in no small measure to the downfall of the Aztec Empire, this is only part of the story. Before the arrival of the Spanish conquistadors, Montezuma was a renowned war leader, skilled diplomat and an able leader of his people who oversaw the consolidation of the Mexica Empire. A Prince of the Mexica Montezuma was born in 1467, a prince of the royal family of the Mexica Empire. Not one hundred years before Montezumas birth, the Mexica had been an outsider tribe in the Valley of Mexico, vassals of the mighty Tepanecs. During the reign of Mexica leader Itzcotl, however, the Triple Alliance of Tenochtitlan, Texcoco and Tacuba was formed and together they overthrew the Tepanecs. Successive emperors had expanded the empire, and by 1467 the Mexica were the unquestioned leaders of the Valley of Mexico and beyond. Montezuma was born for greatness: he was named after his grandfather Moctezuma Ilhuicamina, one of the greatest Tlatoanis or Emperors of the Mexica. Montezumas Father Axaycatl and his uncles Tà ­zoc and Ahuà ­tzotl had also been tlatoque (emperors). His name Montezuma meant he who makes himself angry, and Xocoyotzà ­n meant the younger to distinguish him from his grandfather. The Mexica Empire in 1502 In 1502, Montezumas uncle Ahuitzotl, who had served as emperor since 1486, died. He left an organized, massive Empire which stretched from the Atlantic to the Pacific and covered most of present-day Central Mexico. Ahuitzotl had roughly doubled the area controlled by the Aztecs, launching conquests to the north, northeast, west and south. The conquered tribes were made vassals of the mighty Mexica and forced to send quantities of food, goods, slaves and sacrifices to Tenochtitlan. Succession of Montezuma as Tlatoani The ruler of the Mexica was called the Tlatoani, which means speaker or he who commands. When it came time to select a new ruler, the Mexica did not automatically select the previous rulers eldest son like they did in Europe. When the old Tlatoani died, a council of elders of the royal family came together to select the next one. The candidates could include all male, high-born relatives of the previous Tlatoani, but since the elders were looking for a younger man with proven battlefield and diplomatic experience, in reality they were choosing from a limited pool of several candidates. As a young prince of the royal family, Montezuma had been trained for warfare, politics, religion and diplomacy from an early age. When his uncle died in 1502, Montezuma was thirty-five years old and had distinguished himself as a warrior, general and diplomat. He had also served as a high priest. He was active in the various conquests undertaken by his uncle Ahuitzotl. Montezuma was a strong candidate, but was by no means his uncles undlisputed successor. He was elected by the elders, however, and became Tlatoani in 1502. Coronation of Montezuma A Mexica coronation was a drawn-out, splendid affair. Montezuma first went into a spiritual retreat for a few days, fasting and praying. Once that was done, there was music, dancing, festivals, feasts and the arrival of visiting nobility from allied and vassal cities. On the day of the coronation, the lords of Tacuba and Tezcoco, the most important allies of the Mexica, crowned Montezuma, because only a reigning sovereign could crown another. Once he had been crowned, Montezuma had to be confirmed. The first major step was to carry out a military campaign for the purposes of acquiring sacrificial victims for the ceremonies. Montezuma chose to war against Nopallan and Icpatepec, vassals of the Mexica who were currently in rebellion. These were in the present-day Mexican State of Oaxaca. The campaigns went smoothly; many captives were brought back to Tenochtitlan and the two rebellious city-states began paying tribute to the Aztecs.   With the sacrifices ready, it was time to confirm Montezuma as tlatoani. Great lords came from all over the Empire once again, and at a great dance led by the rulers of Tezcoco and Tacuba, Montezuma appeared in a wreath of incense smoke. Now it was official: Montezuma was the ninth tlatoani of the mighty Mexica Empire. After this appearance, Montezuma formally handed out offices to his highest ranking officials. Finally, the captives taken in battle were sacrificed. As tlatoani, he was the maximum political, military and religious figure in the land: like a king, general and pope all rolled into one. Montezuma Tlatoani The new Tlatoani had a completely different style from his predecessor, his uncle Ahuitzotl. Montezuma was an elitist: he abolished the title of quauhpilli, which meant Eagle Lord and was awarded to soldiers of common birth who had shown great courage and aptitude in battle and warfare. Instead, he filled all military and civil positions with members of the noble class. He removed or killed many of Ahutzotls top officials. The policy of reserving important posts for the nobility strengthened the Mexica hold on allied states, however. The royal court at Tenochtitlan was home to many princes of allies, who were there as hostages against the good behavior of their city-states, but they were also educated and had many opportunities in the Aztec army. Montezuma allowed them to rise in military ranks, binding them - and their families - to the tlatoani. As tlatoani, Montezuma lived a luxurious life. He had one main wife named Teotlalco, a princess from Tula of Toltec descent, and several other wives, most of them princesses of important families of allied or subjugated city-states. He also had countless concubines and he had many children by these different women. He lived in his own palace in Tenochtitlan, where he ate off of plates reserved for only him, waited on by a legion of servant boys. He changed clothes frequently and never wore the same tunic twice. He enjoyed music and there were many musicians and their instruments at his palace. War and Conquest Under Montezuma During Montezuma Xocoyotzà ­ns reign, the Mexica were in a near-constant state of war. Like his predecessors, Montezuma was charged with preserving the lands he inherited and expanding the empire. Because he inherited a large empire, much of which had been added by his predecessor Ahuitzotl, Montezuma primarily concerned himself with maintaining the empire and defeating those isolated holdout states within the Aztec sphere of influence. In addition, Montezumas armies fought frequent Flower Wars against other city states: the main purpose of these wars was not subjugation and conquest, but rather a chance for both sides to take prisoners for sacrifice in a limited military engagement.   Montezuma enjoyed mostly successes in his wars of conquest. Much of the fiercest fighting took place to the south and east of Tenochtitlan, where the various city-states of the Huaxyacac resisted Aztec rule. Montezuma was eventually victorious in bringing the region to heel. Once the troublesome peoples of the Huaxyacac tribes had been subjugated, Montezuma turned his attention to the north, where warlike Chichimec tribes still ruled, defeating the cities of Mollanco and Tlachinolticpac. Meanwhile, the stubborn region of Tlaxcala remained defiant. It was a region made up of some 200 smallish city-states led by the Tlaxcalan people united in their hatred of the Aztecs, and none of Montezumas predecessors had been able to defeat it. Montezuma tried several times to defeat the Tlaxcalans, launching large campaigns in 1503 and again in 1515. Each attempt to subjugate the fierce Tlaxcalans ended in defeat for the Mexica. This failure to neutralize their traditional enemies would come back to haunt Montezuma: in 1519, Hernan Cortes and the Spanish conquistadors befriended the Tlaxcalans, who proved to be invaluable allies against the Mexica, their most hated foe. Montezuma in 1519 In 1519, when Hernan Cortes and the Spanish conquistadors invaded, Montezuma was at the height of his power. He ruled an empire which stretched from the Atlantic to the Pacific and could summon more than a million warriors. Although he was firm and decisive in dealing with his empire, he was weak when faced with the unknown invaders, which in part led to his downfall. Resources and Further Reading Berdan, Frances: Moctezuma II: la Expansion del Imperio Mexica. Arqueologà ­a Mexicana XVII - 98 (July-August 2009) 47-53.Hassig, Ross. Aztec Warfare: Imperial Expansion and Political Control. Norman and London: University of Oklahoma Press, 1988.Levy, Buddy. . New York: Bantam, 2008.Matos Moctezuma, Eduardo. Moctezuma II: la Gloria del Imperio. Arqueologà ­a Mexicana XVII - 98 (July-August 2009) 54-60.Smith, Michael. The Aztecs. 1988. Chichester: Wiley, Blackwell. Third Edition, 2012.Thomas, Hugh. . New York: Touchstone, 1993.Townsend, Richard F. The Aztecs. 1992, London: Thames and Hudson. Third Edition, 2009Vela, Enrique. Moctezuma Xocoyotzin, El que se muestra enojado, el joven. Arqueologia Mexicana Ed. Especial 40 (Oct 2011), 66-73.

Commentary on quotations Essay Example | Topics and Well Written Essays - 1750 words

Commentary on quotations - Essay Example Unfortunately, greed and ambition got the better of the European colonizers treating Indians, along with other â€Å"inferior† races as indentured servants. The process of colonization was necessary to give the ideas freedom, prosperity, and identity a potent reality in America as a civilization of peoples evolved. Immigration of new settlers coming from various parts of the world and migration to the west enabled cultural interactions which resulted to the conscious awareness of cultural differences. As history begins to unfold, the definition between savagery and civilization has become clear. As people of different backgrounds emerged, their motives which were easily characterized by their actions, defines what the word civilize truly means. "Twenty years ago, half our continent was an unknown land, and the Rocky Mountains were our pillars of Hercules. Five years hence, the Orient will be our next door neighbor. We shall hold the worlds granary, the worlds treasury, the worlds highway. But we shall have no West, no border, no Civilization, in line of battle, pressing back hostile savages, and conquering hostile nature.† (p.10) Richard White wrote about the frontier in American culture based on Frederick Jackson Turners academic paper entitled The Significance of the Frontier in American History. The quote is a reminiscence of the past and the prediction of what was to come in the future, seeing the how things have been going at present and for the last quarter of a century, the end of the frontier is very imminent. Immigrants have suppressed the pioneers, referred to as savages, so that the land could be theirs. As a civilization of peoples evolved, a strong, rich, and progressive America was born. Yet, being civilized ended on a superficial level because overcoming of mans hostile nature proved to be a never ending struggle. A speech by Captain Pipe, Hopocan, in 1781, a

What causes wars Essay Example | Topics and Well Written Essays - 1750 words

What causes wars - Essay Example Second reason for failure to bargain is that resources that parties can take over through a war have higher benefits than the benefits that may be obtained from reaching an agreement (Schultz, 2001, p.55). Thirdly, there may be a difference between the benefits that the leaders foresee and the benefits that the population foresees. Fourthly, information about the advantages and disadvantages of having a war are unclear to both the parties and, lastly, agreement cannot be practiced because other parties involved are against all agreements. A war may end up lasting longer if both the sides fail to reach an agreement or if the sides keep realizing that the cost of war is lower than its benefit. While on the other hand, if a war starts as there is little or unclear information of the strength of the parties, and as the war continues and information becomes clearer, the possibility of reaching an agreement becomes higher and the chances of the war ending soon even increases. Reasons that lead to failure to bargain between two parties are considered as rational reasons for war, but in general there are various irrational causes of war (Levy, 2010, p.67). These causes have certain amount of rationality as these causes are related to bargaining failures. Religion has been a cause of war for several years, two countries or states having different religious believes fight against each other on the basis of war (Salter, 1932, p.21). In this cause of war, it is thought that there is no material involvement, while the idea behind this cause of war may be to eradicate the existence of the population of one religion or increasing the population of one of the religious party at war. In this cause of war, parties fail to reach an agreement as they believe that they are being directed to fight this war by a higher authority. Leaders in this kind of war fail to reach an agreement as

Diminishing American Pride Essay Example for Free

Diminishing American Pride Essay The book Zeitoun basically talks about a Syrian American family’s experience in the time of Hurricane Katrina. It was mainly divided into two story lines, one of Abdulrahman Zeitoun, the main character, a Syrian American contractor; and one of Kathy, his wife, a white woman converted Muslim. Zeitoun had an extraordinary life, also an extraordinary experience in the time of Hurricane Katrina. He was a successful well-known businessman in local area. When everyone else was fleeing their hometown before Katrina came, Zeitoun chose to stay to protect his house and business. Later then when the city was flooded, he travelled around with his small canoe, delivering help and resources. However, he was wrong arrested as a looting suspect then and was sent into jail. He was treated as a terrorist and taken away the right of fair trial, forced to confine in a maximum security prison for a crime he didn’t commit. At the end, Zeitoun was released and able to unite with his family again, but he was not compensated in any ways for his misfortune. As this book describes, everything in the time of Hurricane Katrina had gone crazy, including the American criminal justice system. The main objection of this book is to criticize racism phenomenon in America and the rotten criminal justice system. Racism is a main subject in this book. It was first mentioned in this book in Kathy’s story line about her past life experience. â€Å"Years earlier, Kathy and her mother had gone to the DMV together to have Kathy’s license renewed. Kathy was wearing her hijab, and had already received a healthy number of suspicious looks from DMV customers and staff by the time she sat down to have her picture taken. The employee behind the camera did not disguise her contempt. ‘Take that thing off,’ the woman said. † (Zeitoun page 58) From the mentioning of these kinds of past experience seemed irrelevant to Hurricane Katrina, we can see the author’s desire to insert the topic of racism into this book. Kathy’s case shrinks small comparing to Zeitoun’s case in his arrest. â€Å"‘You guys are al Qaeda,’ the soldier said. Todd laughed derisively, but Zeitoun was startled. He could not have heard right. Zeitoun had long feared this day would come. Each of the few times he had been pulled over for a traffic violation, he knew the possibility existed that he would be harassed, misunderstood, suspected of shadowy dealing that might bloom in the imagination of any given police officer. After 9/11, he and Kathy knew that many imaginations had run amok, that the introduction of the idea of ‘sleeper cells’- groups of would-be terrorists living in the U. S. and waiting, for years or decades, to strike- meant that everyone at their mosque, or the entire mosque itself, might be waiting for instructions from their presumed leaders in the hills of Afghanistan or Pakistan. (Zeitoun page 212) It didn’t surprise me at all that Zeitoun have those thoughts that might seem over-worried in some people’s eyes.. Indeed, another author Maysan Haydar had mentioned similar thoughts in her essay â€Å"Veiled Intentions: Don’t Judge a Muslim Girl by Her Covering. † â€Å"Now some people hold their breath a bit longer, assuming I’m a fundamentalist or wondering if I’m there to cause them harm. I sense people studying me on the trains, reading the cover of the book in my hand and trying to gauge if I am one of ‘us’ or one of ‘them’. I grapple with the frustration that I can’t reassure everyone individually that my goals have everything to do with social justice and nothing to do with holy war. But I have seen suspicious fade in the eyes of the pregnant woman to whom I’ve given my subway seat or the Hasidic man whose elbow I’ve taken to help him up the stairs. † (Haydar pg 406) I feel very sorry for Haydar and Zeitoun’s experiences. Muslim people are always feared to be presumed as terrorist. American frightened by the traumatic event of 9-11 developed a stereotype against people from Middle East. The fear of being attack also again drove American crazy on national security. However, for whatever reason, racism has put upon so much harm on people we discriminate against. Muslim people like Zeitoun, hard working and honest people, are forced to live under the fear of being prosecuted for his race someday, taken away from his family, locked up in somewhere nobody would know he’s died or not. Those fears have made them coward under a lowly skin, live like second-class citizens. â€Å"In the weeks after the attacks on the Twin Towers, Kathy saw very few Muslim women in public. She was certain they were hiding, leaving home only when necessary. In Late September, she was in Walgreens when she finally saw a woman in a hijab. She ran to her. ‘Salaam alaikum! ’ she said, taking the woman’s hands. The woman, a doctor studying at Tulane, had been feeling the same way, like an exile in her own country, and they laughed at how delirious they were to see each other. † (Zeitoun page 46) Indeed, as part of international society, American allowed people to be exiled from their own country. In Edward Said’s essay, â€Å"States†, he escribed how they, Palestinian people was exiled from their own country and forced to scatter around the world, be denied of personal identity everywhere. †Some Israeli settlers on the West Bank say: ‘The Palestinians can stay here, with no rights, as resident aliens. ’ Other Israelis are less kind. † (Said pg 546) â€Å"The fact is that today I can neither return to the places of my youth, nor voyage freely in the countries and places that mean the most to me, nor feel safe from arrest or violence even in the countries I used to frequent but whose governments and policies have changed radically in recent times. (Said pg 547) In a documentary I have watched, in some cases, if a Palestinian wants to travel from points to points, they have to go through checkpoints set up by local military. They would be asked to show their prove of identity and relevant documents which sources were mostly denied. Nobody tell them what to do then, no laws protect them, some of them can’t even go to hospitals and schools like every other human being in the course that they don’t have a legal identity. We as adults, teach our kids not to bully in school, that it’s wrong to do so. In contrast, as a human, we allow our country, ourselves to bully on people with a different skin tone. Isn’t this hilarious? Another main subject posted in this book is the criminal justice system in America. Zeitoun was initially arrested in his house, then taken to the bus station, naked searched and put in jail. Throughout the whole process, he had never been told of his charges, no phone calls granted, no one had ever given him a chance to defend himself or to find a lawyer. He was treated as terrorist. In the course of his Middle-Eastern accent, everything about him seemed suspicious to the guards. He was kept in inhumane confinement, was given pork for food despite his religion. He had a deep wound in his feet but was never treated nor given any medical attention. There were basically no laws in effect, Zeitoun was treated as if he wasn’t an American citizen anymore, constitutions and laws don’t protect him. â€Å"Watching the evidence on the table mount, Zeitoun’s shoulders slackened. Most municipal systems were not functioning. There were no lawyers in the station, no judges. They would not talk their way out of this. The police and soldiers in the room were too worked up, and the evidence was too intriguing. (Zeitoun 215) But the most disappointing fact about this is what t I found out later in the book, that all of this happened to Zeitoun was not special cases happened once or twice, it was somehow permitted. â€Å"But knowing that Zeitoun’s ordeal was caused instead by systemic ignorance and malfunction- and perhaps long-festering paranoia on the part of the National Guard and whatever other agencies were involved-was unsettling. It said, quite clearly, that this wasn’t a case of a bad apple or two in the barrel. The barrel itself was rotten. (Zeitoun 307) This is totally different from what I learnt from my administration of justice class. The whole process is wrong. How could an innocent person be justified this way? Not even a phone call allowed. It is nothing better than abduction. Who gave government the right to treat people like this? I guess under the name of National Security, there’s nothing government can’t do, all laws and constitutions could be undermined. James Bamford, author of essay â€Å"Wired† pointed out the same point, says in his essay, â€Å"’They violated the Constitution setting it up. He says bluntly. â€Å"But they d idn’t care. They were going to do it anyway, and they were going to crucify anyone who stood in the way. ’† â€Å"Basically all rules were thrown out the window, and they would use any excuse to justify a waiver to spy on Americans. † (Wired pg 0843,, 084) National Security, initially served the principle of protecting Americans has become a tool to against Americans. â€Å"The NSA has turned its surveillance apparatus on the US and its citizens. It has established listening posts throughout the nation to collect and sift through billions of email messages and phone calls, whether they originate within the country or overseas. It has created a supercomputer of almost unimaginable speed to look for patterns and unscramble codes. Finally, the agency has begun building a place to store all the trillions of words and thoughts and whispers captured in its electronic net. † (Wired pg 81) Isn’t it scary to know our government has already gone this far for â€Å"National Security†? Anyone is a target of NSA. But who is more prone to be checked on? I believe this could be linked again to the topic of racism. Look back to Zeitoun and his fellows’ arrest; I believe they would never have been presumed as terrorists, despite the same context and evidence, if all four of them are white. The book Zeitoun serves more than a journalism. Dave Egger cleverly brought out these two important topics to us through the book. Could we still call our country States of freedom and equality after learning all these previously unknown facts? It’s time for people to stand up to protect the prides of America, fix our criminal justice system, drive racism into history and look forward to a better, true States of freedom and equality.

Mirror for Man - People are the way that they are Raised :: Mirror for Man Essays

  Ã‚  Ã‚  Ã‚  Ã‚   Kluckhohn explained the differences and similarities among the world's peoples by taking different life examples of different cultured people and compared them to another person who was raised up in a different lifestyle. At first, he brought up several questions, asking why certain people do or don't do certain things. These questions were served as guides, which led on to the examples. They also served as attraction to the readers who are curious about different people from another culture. Then he went on to compare people from different cultures in his examples. He compared an American woman, who restricts her husband to only one mate, with a Koryak woman, who shares her husband with another woman; an American raised in China with the Americans raised here in the United States; and lastly, he compared people's reactions from eating the meat of chicken or tuna fish to that of a rattlesnake. Kluckhohn has a strong point in viewing human's culture. I agree with his definition of culture -- "the part of the environment that is the creation of human beings." People react to things differently because they were raised up in different environments with different cultures. No matter who the person is, or where he (or she) was born, his behavior and his personality traits developments would depend on the environment that he is living in. The way people think, feel, react, and behave also are depended upon life experiences. They feel different emotions because they have felt this emotional happiness or sadness before. They think what is right and what is wrong because they have learned from past experiences. They react to different things because they experienced things that please them and the things that displease them. They behave in certain ways because they want to design their way of living into what they have admired from other people's lives. I was born in Hong Kong, the school systems and the people living there are very strict in comparing with the United States. Over in Hong Kong, students go to school for seven hours and then they would go home and spend another seven or eight hours on homework. The school system really forces you to study and do your homework to stay up with the rest of the class. But yet, the students would accept the homework assignments without complaining because they are use to doing so much homework and taking the pressure.

Hypocrisy in Democracy Essay

Freedom of Speech Silence What is democracy? Democracy is a form of government where the people rule, not a dictator, a king or aristocrats. Democracy means that people have a say in law and state. This is impossible to do without a voice. How are people supposed to run the government if they aren’t allowed to speak their mind? This is hypocrisy. That is like telling someone they can travel where ever they want as long as it is in this little box. Our voice is the most important tool and weapon that we have possession of. Without our voice, we are nothing. American is â€Å"the land of the free and the home of the brave† or at least it is supposed to be. Certain people, like college presidents and other leaders are trying to take away the freedom that Americans have. If they succeed in taking away our rights and freedoms, America will no longer be a democracy. America will turn into a dictatorship. This is unacceptable. It is written in the constitution that Americans h ave freedom of speech. Freedom of expression and speech is the First Amendment, the first. It is the first because it is the most important. Without freedom of speech; people are unable to learn and grow, unable to find themselves and stand out, and unable to stand up for what they believe in. If universities get rid of freedom of speech, people will be incapable of learning and developing into the person they should be. Mistakes teach people more than anything else could. Mistakes might not be made if freedom of speech is taken away; if they are made others would be unable to tell them for fear they might embarrass them. Even worse than that, people would be unable to learn and discuss about history for fear of hurting other people. Keith John Sampson was said to be guilty for public racial harassment for reading a history book. This book was about the KKK and how the Irish defeated them. It was a complete anti-Klan book and a history book, but the university didn’t care. Sampson was just trying to expand his knowledge, but he was to be punished. They claimed that he was guilty of reading a book that has a lot of bad feelings behind it in public. However, it is a history book. It is something people learn about in school. The only way to prevent the past from happening again is to learn about it, no matter how bad it is. If the universities take away the right to learn and discuss about the past, we are doomed to repeat it. Besides learning about mistakes, freedom of speech also allows people to discover themselves. College is the first time that people are able to do what they want. They decided what times they want to go to school and what classes they want to take. College is when people find themselves. They find out what they want to do, what the love and who they are. One of the ways people do this is by expression, which falls under the freedom of speech. How can people grow if they are confined in a small box? They can’t grow; they can’t become the people they are supposed to be. College is about exploring, making mistakes, and discovering their life path. College is supposed to be freeing. One of the biggest reason people go to college, besides getting a degree for a better futu re, is to discover themselves. If universities ban self expression people will stop going to college. People will start dropping out and unemployment will sky rocket. The main reason people go to college on campus is for all the experience. If people will still get a college education, they will take online courses and there will be no need for campuses or presidents or staff. They will all lose their jobs. However, the most important thing that will be lost without freedom of speech is the right to stand up for what we believe in. Without freedom of speech, people will not be able to stand up for they believe in. without peoples powerful voices, the world wouldn’t be where it is today. This is why the First Amendment was made, to make sure that people would always be able to speak out and stand up. Unfortunately, people are trying to take that right away. Hayden Barnes, a former Valdosta student, was almost expelled for standing up for what he believes in. The University was planning to spend forty million dollars to build a parking garage. Barnes didn’t like this. He believed that all the money would be better off going to something different. He started protesting the building of the garage. The president of the University was extremely mad. He was the one who wanted to make the garage and he didn’t want someone to stop him. He started going out of his way to get Barnes expelled from school. He looked into Barnes’s background and even looked into his social networks to see what he put on there. Barnes was almost kicked out of school for what he stood up for. No one should ever be afraid to say what they believe and what they stand for. People have the desire to be in control and take rights away from people. Thankfully we have rights and regulations that don’t let them take away what is ours. The First Amendment was made to make sure that everyone in America has the right to express themselves through words and actions. Also, thankfully, there are people who fight for our rights when people try to take them away. FIRE is there to help anyone who needs it. When there are people trying to take away rights, it is wonderful to know that someone will be there to help.

Weighted Average Cost of Capital and Midland Energy

Executive Summary: Midland Energy Resources, Inc. is a global energy company with a broad array of products and services. The company operates within three different operations including oil and gas exploration and production (E&P), refining and marketing (R&M), and petrochemicals. Midland has proven to be a very profitable company, with reported operating revenue of $248. 5 billion and operating income of $42. 2 billion. The company has been in business for over 120 years and employed more than 80,000 individuals.Janet Mortensen, the senior vice president of project finance for Midland Energy Resources, has been asked to calculate the weighted average cost of capital (WACC) for the company as a whole, as well as each of its three divisions as part of an annual budgeting process. Midland’s Three Divisions: Exploration & Production Oil exploration and production (E&P) is Midland’s most profitable business, and its net margin over the previous five years was among the hig hest in the industry.With oil prices at historic highs in early 2007, Midland anticipated heavy investment in acquisitions of promising properties, in development of its proved undeveloped reserves, and in expanding production. They also needed to account for competition from areas such as the Middle East, Central Asia, Russia, and West Africa. Refining and Marketing Midland had ownership interests in forty refineries around the world with distillation capacity of five million barrels a day. Measured by revenue, this side of the business was Midland’s largest. The relatively small margin was consistent with a long-term trend in the industry.Margins had declined steadily over the previous twenty years. Petrochemicals Petrochemicals is Midland’s smallest but most promising and undervalued division. Midland owned twenty-five manufacturing facilities and five research centers in eight countries around the world. Capital spending in petrochemicals was expected to grow in th e near term. [Midland Energy Case Analysis] Managerial Finance 1 In order to find the cost of capital for Midland Energy Resources and each of the three divisions within the company, we will need to use the formula or weighted average cost of capital (WACC) which is: ( )( rd= Cost of debt re= Cost of equity D= Market value of debt E= Market value of equity V= D+E= Value of the company (or division) T= Tax rate First, we can calculate â€Å"rd† for each division as it is outlined in the case by adding a premium/spread over US Treasury securities of a similar maturity. In other words: ( The two tables in the case are as follows: Table 1 Business Segment Consolidated E&P R&M Petrochemicals Credit Rating A+ A+ BBB AATable 2 Maturity 1-Year 10-Year 30-Year Rate 4. 54% 4. 66% 4. 8% Debt/Value 42. 2% 46. 0% 31. 0% 40. 0% Spread to Treasury 1. 62% 1. 60% 1. 80% 1. 35% ) ) ( ) *For my calculation, I used the 30-year maturity for E&P, R&M, and Midland as a whole as they take on longer term projects. I used the 1-year for petrochemicals as they tend to take on short term projects. [Midland Energy Case Analysis] Managerial Finance 2 Calculations are as follows: rd for Exploration & Production: rd for Refining & Marketing: rd for Petrochemicals: rd for Midland: Second, we need to calculate â€Å"re† for the three divisions as well as Midland as a whole.To find â€Å"re†, we will use the CAPM model outlined in the case: ( ) In order to solve this equation, we need to find beta for the three divisions. The case already outlines Midland’s overall beta at 1. 25. However, the case does not state the beta for the three divisions. We can calculate this using beta for publicly traded companied outlined in the case. Using the following formula, as well as exhibit 5 in the case, we can calculate beta for the three divisions: * ( ) ( )+ [Midland Energy Case Analysis] Managerial Finance 3 Exhibit 5(from case) Exploration & Production: Jackson Energy, Inc.Wi de Plain Petroleum Corsicana Energy Corp Worthington Petroleum Average Refining & Marketing: Bexar Energy, Inc. Kirk Corp. White Point Energy Petrarch Fuel Services Arkana Petroleum Corp. Beaumont Energy, Inc. Dameron Fuel Services Average Midland Energy Resources Equity Market Value 57,931 46,089 42,263 27,591 Net Debt 6,480 39,375 6,442 13,098 D/E 11. 20% 85. 40% 15. 20% 47. 50% 39. 80% Equity Beta 0. 89 1. 21 1. 11 1. 39 1. 15 LTM Revenue 18,512 17,827 14,505 12,820 LTM Earnings 4,981 8,495 4,467 3,506 60,356 15,567 9,204 2,460 18,363 32,662 48,796 6,200 3,017 1,925 -296 5,931 6,743 24,525 0. 30% 19. 40% 20. 90% 12. 00% 32. 30% 20. 60% 50. 30% 20. 30% 1. 7 0. 94 1. 78 0. 24 1. 25 1. 04 1. 42 1. 2 160,708 67,751 31,682 18,874 49,117 59,989 58,750 9,560 1,713 1,402 112 3,353 1,467 4,646 134,114 79,508 59. 30% 1. 25 251,003 18,888 Again the calculation to find Asset ? is: * Equity ? for Midland= 1. 25 ( ) ( )+ Equity ? for E&P= 0. 93*[1+ (1-39. 73%)*85. 19%] =1. 41 Equity? for R&M= 1. 05*[1+ (1-39. 73%)*44. 93%] = 1. 33 *85. 19% and 44. 93% come from Exhibit 1 in the case In order to get Equity ? for Petrochemicals, we will need to take a weighted average of the three divisions.The equation would be as follows: (w1, w2, w3 are based on the total assets of a division divided by Midland’s total assets). To find this, we will use the numbers from Exhibit 3 in the case: [Midland Energy Case Analysis] Managerial Finance 4 2004 E&P 76,866 R&M 60,688 Petro 19,943 Midland 157,497 2005 125,042 2006 140,100 Avg 114,002. 67 91,629 93,829 82,048. 67 28,000 28,450 25,464. 33 244,671 262,378 221,515. 33 Calculation for w1-3: W1= 114,002. 67/221,515. 33= 0. 51 W2= 82,048. 67/221525. 33= 0. 37 W3= 25,464. 33/221,515. 33= 0. 2 Now we can use the formula from before to find the ? for Petrochemicals: Lastly, we need to find EMRP to find â€Å"re† for Midland and the three divisions. We can find our EMRP number by looking at exhibit 6 in the case: Period 1987-2006 1 967-2006 1926-2006 1900-2006 1872-2006 1798-2006 Average excess return US Equities – T-Bonds 6. 4% 4. 8% 7. 1% 6. 8% 5. 9% 5. 1% Standard Error 3. 7% 2. 6% 2. 2% 1. 9% 1. 6% 1. 2% I will choose to use the average return from the time period of 1798-2006. That is the longest sample size in regards to time, as well as having the lowest standard of error.I will round down to 5% for ease of calculation: [Midland Energy Case Analysis] Managerial Finance 5 ( â€Å"re† for Midland= 4. 98%+5%*1. 25= 11. 23% â€Å"re† for E&P= 4. 98%+5%*1. 41= 12. 03% â€Å"re† for R&M= 4. 98%+5%*1. 33= 11. 63% â€Å"re† for Petrochemicals= 4. 54%+5%*0. 32= 6. 14% ) With this information, we are able to finally calculate the weighted average cost of capital (WACC) for Midland and the 3 divisions of the company. The formula and calculations are as follows: ( )( ) ( ) *D/V are provided in Table 1 for Midland, E&P, R&M, and Petrochemicals. They are 42. 2%, 46. %, 31. 0%, 40. 0 % respectively. WACC-cost of capital we need: WACC for E&P: ( =8. 32% WACC for R&M: ( =9. 29% WACC for Petrochemicals: ( =5. 10% WACC for Midland: ( =9. 17% [Midland Energy Case Analysis] Managerial Finance 6 ) ) ) ) The cost of capital (as shown above) will differ for the three divisions because the business operates in different industries. By being in different industries, the companies have different risk exposure and betas, while also having different credit ratings. All of these components will affect a company’s cost of capital differently.Further Analysis: Mortensen’s estimates were used for many things including performance assessments, mergers and acquisition proposals, stock repurchases, asset appraisals, and financial accounting. As stated in the case, cost of capital is a very important component in WACC calculations. These calculations were being used to evaluate at a divisional level as well as at a corporate level as a whole. In my calculations for the case, I solved for both levels. In regards to Midland’s corporate WACC, Mortensen computed the cost of debt for each division by adding a premium (or â€Å"spread†) over U.S. Treasury securities with an appropriate maturity depending on the division. For Exploration and Production (E&P), Refining and Marketing (R&M), as well as Midland as a corporation, Mortensen used a 30 year maturity TBond assumption as those divisions tended to focus on longer term projects. She decided on a 1 year T-Bond maturity assumption for Petrochemicals as they tended to focus on shorter term projects. Another assumption was that the tax rate (39. 73%) remained constant throughout the case as well as an EMRP of 5%.The EMRP was based on exhibit 6 of the case which examined TBonds during a certain period of time and with a certain standard of error. With a very low standard of error (based on the chart) and advisors, bankers, and investors covering the industry agreeing with 5% as an estimate, I believe the estimate to be appropriate. Analysts on the industry, bankers, and investors tend to have a broader look on companies within an industry as a whole. Lastly, Midland should not use a single corporate hurdle rate for evaluating investment opportunities in all of its divisions because each division is different.Midland is too large of a corporation, with different divisions, each containing its own unique set of risks. Due to the fact that the risk for each division will be different, I believe the corporate hurdle rates for those divisions should also be different to reflect a more accurate corporate assessment. I believe Mortensen did a great job with the information she was presented with in the case and I believe Midland Energy will continue to be a prominent company within the industry. [Midland Energy Case Analysis] Managerial Finance 7