Market structure

Four basic types of market structures are: 1- Perfect competition 2- Monopolistic competition 3- Oligopoly 4- Monopoly There is also another market structure called Monopoly. 1- Perfect competition It is considered more theoretical than practical, because it is very rare. In perfect intention a large number of firms sell identical products, where none of them has pricing power. There no berries or very easy to enter to the market by any new farm. Prices. For example if we go to normal retail shops to buy vegetables, we will get at same prices from each and every shop.Fish market at Male' is a very good and a simple example, where inside the market lot of sellers will be selling same fishes. Prices will be set by the demand and supply. Neither buyer nor seller sets the price. It is more like automates pricing. Characteristics of perfect competition include large umber of small firms, identical products, perfect resource mobility and perfect knowledge. 2- Monopolistic competition It is almost like perfect competition where large number of small firms sells similar but not identical products. Relative freedom of entry, to and exit from the industry.It means buyers will have substitutes to choose from. Alternatives to buy for fulfill their needs and wants. Examples of industries structures as monopolistic competition includes, clothing industry, restaurants, and shoes and so on. 3- Oligopoly It is a market situation where products are supplied by small number of firms where ACH of them has influence over pricing and supplies which directly effects the position of the competitors. I oligopoly there is a special case where there is only two producers are called Duopoly. 4- Monopoly This is a market structure where only one producer in a market who has to the total control.Buyers do not have substitutes and have no choice. They have total control over supply and prices. In this market structure, seller is always happy and consumers suffer. They take more profit with a huge marginal value from the products. Characteristics of monopoly includes single seller, unique product, berries o entry and specialized information. The fifth type of market structure which is not included in basic structures is Monopoly. It is upside down of a monopoly where there is only one buyer. If we relate to a Mammalian context, government is the only buyer for the explosives and guns. Where there may be many sellers.Exhibit 1 Perfect Competition Monopolistic Competition Oligopoly Monopoly Number of Sellers Many Few One Barriers to Entry Very Low Low Very High Type of Substitute Products Very good Good substitutes but differentiated Very good differentiated substitutes No good substitutes Nature of competition Price only Marketing, features and price Advertising Pricing Power None Little Little to significant Significant As mentioned above, from 1988 to 2005 telecommunication industry of Maldives was a monopoly market. The following will elaborate how it was a monopoly a nd what was the situation during the monopoly. 988-2005 Draught monopoly in Maldives It was history that people used to call Draught as â€Å"Blood Suckers†. When the company started in the Maldives in Maldives there was a telecommunication service by cable and wireless which uses USB set to communicate between the islands. After their establishment as one and only telecoms service provider in 1988 they brought a major upgrade to their network in 1989 in Male and introduced paging service in the Maldives. They also introduced internet service for the very first time in Maldives in 1996 followed by mobile phone service in 1997 which was upgraded to GSM in 1999.Being the only company to provide the service and major share controlled by the government of the Maldives, they introduced services at a huge marginal value. Consumers have no substitution in the market, which lead Draught to grow up and cake huge profit and extended its service to nationwide, while charging extraordina ry high charges to cover its expansion costs and making more profit. It is usual to charge more from the consumers in monopoly market structure. In monopoly, always seller is always happy and consumers are unhappy.Some pros and cons of monopoly are: Advantages Disadvantages Large capital scale benefit to the company More money to invest on development Earning national export revenues Price discrimination between consumers Very high market share Restricts production potential Do not actively pursue new clients Poor product quality Unfair wealth distribution Entry barrier for new comers When Waiting telecoms Maldives (presently called Ordered) started their service officially in Maldives on 1st August 2005 shortly after they were licensed on 1st of February 2005, the market structure changed to an oligopoly.Oligopoly In economics oligopoly means that there are few sellers of a certain product in a market. Usually these sellers are always in a high competition with each other. In this type of markets sellers knows very well about their competitors. They have a high power to in pushing their products to the consumers. When on seller makes a change, it will directly affect other sellers. There is a special case in oligopoly which is called duopoly. Which is when the there is only two sellers in the market. Here are some advantages and disadvantages of oligopoly.Advantages Lot of control Ability to fix prices Competitive pricing More profit making Perfect knowledge of the market Price controlling will be a disadvantage for consumers Creative ideas may fail to realist Difficult for small firms to establish in the market Not much of competition No fair wealth distribution Oligopoly in Maldives telecoms industry From 2005 Ordered became the major and the only competitor to Draught. As usual they have initiated their business with a huge investment to make existence of their network across the Maldives.It was a huge challenge for them to establish when there was a well- established and government controlled seller in the marker for almost a decade, market share was 100% controlled by monopolized Draught. Immediately after starting the service in the market by the new comer, the unhappy customers of the monopolized industry started to change their service provider. They started with introductory promotional prices which was far much better than the ajar market controller, which directly affected the business of Draught. Competition, strengths and weaknesses.When there are two or more sellers are there in a market, it is obvious that the competition will be born in the market. It is very interesting to study about the competition between Ordered and Draught. Luckily I have got very good connections at the top levels of both the companies, which made me to sit and talk about their respective companies. I found that they are tightly in competition with each other. Pricing: When Draught was alone in the industry, consumers pay around USED $100 average u ser used to pay around MOVE 2000 per month for the usage. Call rates are sky high.Rates differ from calls from mobile to mobile and mobile to landlines. When the competition started and if we see current situation, we have choices for individuals and businesses depends on what consumer needs. There are some consumers who want more talk time than data while others doesn't care about the talk time but data allowance the service provider offers. Those used to spend around 2000 per month now are spending less than 500 per month because of competitive pricing by the competitors. Advertising: Earlier days Draught keeps and average advertising.Unlike that now each and every TV channel is occupied by both Draught and Ordered advertisements. All the islands with more population see those companies' bill boards near harbors and schools. It is very clear that Ordered is doing more aggressive advertising while Draught use more informative advertising. Corporate Social responsibility: We used to say that both the companies do corporate social responsibility to a certain extent. But in real, in my study I found that rather than corporate social responsibility they both do corporate philanthropy. They do not actively participate in social activities.But they do help by donation some money to do the social activities by others. That is a form of advertisement they both do. They are present in the activities as bill boards. Just to advertise the company name. For example: Thieved league football tournament is always sponsored by one of these two companies. Competitive advantages: Draught uses â€Å"first in Maldives† â€Å"Largest network† and so on while Ordered uses â€Å"best network for smart phones†. Draught is first to come and still holds 65% market share while Ordered is gaining market share at a rapid speed.Bad the backbone of the company is much better with latest technologies while Draught is upgrading its backbone. Subsidized handsets to consum ers: Ordered started offering Samsung handset to its consumers with contract for the very first time in Maldives. And soon they will be starting offer apple handsets on contract, while Draught is working with apple to introduce subsidized apple handsets with contract. Apple currently certified Ordered network for their products while Draught is doing upgrades to obtain certification of using Apple products on contract. Is this industry good for the society?Unlike the history of the monopoly in the telecommunication industry in the Maldives, with existing oligopoly (duopoly) consumers are happy now. As is economic theory, human wants are unlimited with the scares resources available, people are still aiming for mush cheaper services with better quality. As mentioned earlier in this report, consumers' expenses, for the use of telecommunication are decreased by 60 percentages. We never heard of handset for installments by service providers before. But it is started now. We have heard a bout subsidized handset with contract with carrier locked, from other parts of the world.We never imagined that a small country with a small population like us will get phones on contract with subsidized prices. But it is soon to happen. Unlike perfect competition and monopolistic competition there are no much of sellers. So competition and pricing of the products will not be according to the demand and supply. Sellers will have the power to set the prices. Consumers are very happy when there is a perfect competition and monopolistic competition. Consumers are sad at most when there is a monopoly. But than they used to have, the monopoly. It is an average good for the society. Market structure Four basic types of market structures are: 1- Perfect competition 2- Monopolistic competition 3- Oligopoly 4- Monopoly There is also another market structure called Monopoly. 1- Perfect competition It is considered more theoretical than practical, because it is very rare. In perfect intention a large number of firms sell identical products, where none of them has pricing power. There no berries or very easy to enter to the market by any new farm. Prices. For example if we go to normal retail shops to buy vegetables, we will get at same prices from each and every shop.Fish market at Male' is a very good and a simple example, where inside the market lot of sellers will be selling same fishes. Prices will be set by the demand and supply. Neither buyer nor seller sets the price. It is more like automates pricing. Characteristics of perfect competition include large umber of small firms, identical products, perfect resource mobility and perfect knowledge. 2- Monopolistic competition It is almost like perfect competition where large number of small firms sells similar but not identical products. Relative freedom of entry, to and exit from the industry.It means buyers will have substitutes to choose from. Alternatives to buy for fulfill their needs and wants. Examples of industries structures as monopolistic competition includes, clothing industry, restaurants, and shoes and so on. 3- Oligopoly It is a market situation where products are supplied by small number of firms where ACH of them has influence over pricing and supplies which directly effects the position of the competitors. I oligopoly there is a special case where there is only two producers are called Duopoly. 4- Monopoly This is a market structure where only one producer in a market who has to the total control.Buyers do not have substitutes and have no choice. They have total control over supply and prices. In this market structure, seller is always happy and consumers suffer. They take more profit with a huge marginal value from the products. Characteristics of monopoly includes single seller, unique product, berries o entry and specialized information. The fifth type of market structure which is not included in basic structures is Monopoly. It is upside down of a monopoly where there is only one buyer. If we relate to a Mammalian context, government is the only buyer for the explosives and guns. Where there may be many sellers.Exhibit 1 Perfect Competition Monopolistic Competition Oligopoly Monopoly Number of Sellers Many Few One Barriers to Entry Very Low Low Very High Type of Substitute Products Very good Good substitutes but differentiated Very good differentiated substitutes No good substitutes Nature of competition Price only Marketing, features and price Advertising Pricing Power None Little Little to significant Significant As mentioned above, from 1988 to 2005 telecommunication industry of Maldives was a monopoly market. The following will elaborate how it was a monopoly a nd what was the situation during the monopoly. 988-2005 Draught monopoly in Maldives It was history that people used to call Draught as â€Å"Blood Suckers†. When the company started in the Maldives in Maldives there was a telecommunication service by cable and wireless which uses USB set to communicate between the islands. After their establishment as one and only telecoms service provider in 1988 they brought a major upgrade to their network in 1989 in Male and introduced paging service in the Maldives. They also introduced internet service for the very first time in Maldives in 1996 followed by mobile phone service in 1997 which was upgraded to GSM in 1999.Being the only company to provide the service and major share controlled by the government of the Maldives, they introduced services at a huge marginal value. Consumers have no substitution in the market, which lead Draught to grow up and cake huge profit and extended its service to nationwide, while charging extraordina ry high charges to cover its expansion costs and making more profit. It is usual to charge more from the consumers in monopoly market structure. In monopoly, always seller is always happy and consumers are unhappy.Some pros and cons of monopoly are: Advantages Disadvantages Large capital scale benefit to the company More money to invest on development Earning national export revenues Price discrimination between consumers Very high market share Restricts production potential Do not actively pursue new clients Poor product quality Unfair wealth distribution Entry barrier for new comers When Waiting telecoms Maldives (presently called Ordered) started their service officially in Maldives on 1st August 2005 shortly after they were licensed on 1st of February 2005, the market structure changed to an oligopoly.Oligopoly In economics oligopoly means that there are few sellers of a certain product in a market. Usually these sellers are always in a high competition with each other. In this type of markets sellers knows very well about their competitors. They have a high power to in pushing their products to the consumers. When on seller makes a change, it will directly affect other sellers. There is a special case in oligopoly which is called duopoly. Which is when the there is only two sellers in the market. Here are some advantages and disadvantages of oligopoly.Advantages Lot of control Ability to fix prices Competitive pricing More profit making Perfect knowledge of the market Price controlling will be a disadvantage for consumers Creative ideas may fail to realist Difficult for small firms to establish in the market Not much of competition No fair wealth distribution Oligopoly in Maldives telecoms industry From 2005 Ordered became the major and the only competitor to Draught. As usual they have initiated their business with a huge investment to make existence of their network across the Maldives.It was a huge challenge for them to establish when there was a well- established and government controlled seller in the marker for almost a decade, market share was 100% controlled by monopolized Draught. Immediately after starting the service in the market by the new comer, the unhappy customers of the monopolized industry started to change their service provider. They started with introductory promotional prices which was far much better than the ajar market controller, which directly affected the business of Draught. Competition, strengths and weaknesses.When there are two or more sellers are there in a market, it is obvious that the competition will be born in the market. It is very interesting to study about the competition between Ordered and Draught. Luckily I have got very good connections at the top levels of both the companies, which made me to sit and talk about their respective companies. I found that they are tightly in competition with each other. Pricing: When Draught was alone in the industry, consumers pay around USED $100 average u ser used to pay around MOVE 2000 per month for the usage. Call rates are sky high.Rates differ from calls from mobile to mobile and mobile to landlines. When the competition started and if we see current situation, we have choices for individuals and businesses depends on what consumer needs. There are some consumers who want more talk time than data while others doesn't care about the talk time but data allowance the service provider offers. Those used to spend around 2000 per month now are spending less than 500 per month because of competitive pricing by the competitors. Advertising: Earlier days Draught keeps and average advertising.Unlike that now each and every TV channel is occupied by both Draught and Ordered advertisements. All the islands with more population see those companies' bill boards near harbors and schools. It is very clear that Ordered is doing more aggressive advertising while Draught use more informative advertising. Corporate Social responsibility: We used to say that both the companies do corporate social responsibility to a certain extent. But in real, in my study I found that rather than corporate social responsibility they both do corporate philanthropy. They do not actively participate in social activities.But they do help by donation some money to do the social activities by others. That is a form of advertisement they both do. They are present in the activities as bill boards. Just to advertise the company name. For example: Thieved league football tournament is always sponsored by one of these two companies. Competitive advantages: Draught uses â€Å"first in Maldives† â€Å"Largest network† and so on while Ordered uses â€Å"best network for smart phones†. Draught is first to come and still holds 65% market share while Ordered is gaining market share at a rapid speed.Bad the backbone of the company is much better with latest technologies while Draught is upgrading its backbone. Subsidized handsets to consum ers: Ordered started offering Samsung handset to its consumers with contract for the very first time in Maldives. And soon they will be starting offer apple handsets on contract, while Draught is working with apple to introduce subsidized apple handsets with contract. Apple currently certified Ordered network for their products while Draught is doing upgrades to obtain certification of using Apple products on contract. Is this industry good for the society?Unlike the history of the monopoly in the telecommunication industry in the Maldives, with existing oligopoly (duopoly) consumers are happy now. As is economic theory, human wants are unlimited with the scares resources available, people are still aiming for mush cheaper services with better quality. As mentioned earlier in this report, consumers' expenses, for the use of telecommunication are decreased by 60 percentages. We never heard of handset for installments by service providers before. But it is started now. We have heard a bout subsidized handset with contract with carrier locked, from other parts of the world.We never imagined that a small country with a small population like us will get phones on contract with subsidized prices. But it is soon to happen. Unlike perfect competition and monopolistic competition there are no much of sellers. So competition and pricing of the products will not be according to the demand and supply. Sellers will have the power to set the prices. Consumers are very happy when there is a perfect competition and monopolistic competition. Consumers are sad at most when there is a monopoly. But than they used to have, the monopoly. It is an average good for the society.

Marine Resources

Madalena Barbosa Marine Resources – April, 2012 Index Common Property Fishery of N identical fishing vessels model: †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 2 1. a) Biological Stock Equilibrium without Harvest †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 2 1. b) Maximum Sustainable Yield †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 2 1. c) Open Access Equilibrium †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 5 1. ) Optimal Economic Equilib rium †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 6 1. e) Comparison between Maximum Sustainable Equilibrium and both Open Access Equilibrium and Optimal Economic Equilibrium †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 8 1. f) Assuming a schooling fishery †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 9 2. Different possible policies †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 11 2. ) Total Allowable Catches †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 11 2. b) Effort and harvest taxes †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 13 2. c) Individual Transferable Quotas – ITQ’s †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 15 3. Recommendation statement for the policy decision ITQ’s †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 16 Figure 1Growth and Harvest as function of stock size †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Figure 2Sustainable revenue, total costs and net benefit of fishing effort. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 8 Figure 3 Growth and Harvest as function of stock size for an Open Access equilibrium and a set TAC †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 11 Figure 4 Sustainable revenue, total costs and Total revenue and total costs for the TAC level of fishing effort. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 2 Figure 5 Use of corrective taxes on effort can equate social and private costs †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 14 Figure 6 Use of corrective taxes on harvest that can equate social and private revenues. †¦Ã¢â‚¬ ¦. 15 Marine Resource Management – Assignment 2 1 Common Property Fishery of N identical fishing vessels model: Biological growth function for the resource stock: ? = 1? ? = ? ? Graham-Schaefer production function (linear case of the Coob-Douglas production function): Profit function: Condition: Where, 0? = ? ? ? S(t): stock (biomass) of economically valuable fish at time t.E(t): Effort is an index measure of the quantity of inputs applied to the task of fishing at time t. Intrinsic growth rate of the resources stock: r = 0,8/Ye ar Natural carrying Capacity (maximum value for S): k=50. 000 tons Catchability coefficient: q = 0,0002/hour fishing Price per unit of output: p = 200â‚ ¬/ton Cost per unit of effort: c=400â‚ ¬/ hour fishing Maximum Effort per vessel: = 100 hours fishing 1. a) Biological Stock Equilibrium without Harvest In this situation the growth in the stocks doesn’t exist so that: ? =0 = = 50. 000 1. b) Maximum Sustainable YieldIn order to calculate the values that maximize sustainable harvest for this fishery, we need to compute the harvesting function that depends on effort (Shaefer Yield Effort Curve); and after that, to maximize harvesting for effort so that we are able to compute the different sustainable values. Marine Resource Management – Assignment 2 2 First we substitute the Graham-Shaefer production function into the biological growth function of the stock and obtained, = 1? ? In a steady-state equilibrium = = are equally counterbalanced by the removals from the s tock through harvesting). Also and .The solution of the previous function for the steady-state level of S is: 1? = ? 1? = ? = 0, so that = (the additions to the resource stock 1? = = ? ? 1? = ? Substitute the former function in Graham-Schaefer production function to find Shaefer Yield Effort Curve: ? = = = ? 1? ? ? ? Schaefer Yield Effort Curve: This equation is quadratic in E so for high levels of effort the yield is zero. So, if the effort level is higher than the critical level, > towards extinction. ? , the yield is zero and the population will be driven Maximize Shaefer Yield Effort Curve to find the highest value of Effort that can be sustainable, 2 =0? 2 =0? = ? = = 2 ? ? = 2 Marine Resource Management – Assignment 2 3 To find the Maximum Sustainable Harvest level substitute Emsy in the Shaefer Yield Effort Curve, ? = ? ? 4 ? ?= 2 ? 2 ? ?= ?= 2 2 ? 4 ? ? ?= 2 ? = 4 ? To find the stock that maximizes sustainable harvest of this fishery substitute Emsy and Hmsy in Gr aham-Shaefer production function and solve it for S, = ? 4 = 2 ? 4 Note that the resource stocks at MSY is on-half of the natural carrying capacity. The solution for the maximum sustainable yield is given by the following values of Effort, harvest and stock: = 2 ? = 0,8 ? 50. 000 ? 4 50. 000 = ? 2 0,8 ? 0,0002 = . 0 2 = ? = = = 2 4 ? ? = = = . . Now that we have calculated the level of effort corresponding to the maximum sustainable yield, EMSY, we can estimate the necessary equilibrium fleet, as it is the one that with the maximum effort per vessel, EMAX, equals the EMSY. = 2. 000 ? 100 ? ? = ? The equilibrium fleet under sustainable harvesting is composed of 20 identical fishing vessels. ? = = Marine Resource Management – Assignment 2 4 1. c) Open Access Equilibrium To characterize the Open-Access Equilibrium we take two main assumptions: 1. The steady-state equilibrium for the biological growth function is true and 2.It is also true the steady-state equilibrium condition f or all sustainable rents. = =0 ? =0 With these two equations we have the property right condition of open-access and the social welfare optimum. That is, the comparative statics to compare the optimal open-access levels of effort, resource stock, yield, and rents with the social optimum levels of effort, resource stock, yield, and rents. Rearranging we obtain the open-access equilibrium level for the resource stock, ? = = ? ? From the steady-state equilibrium condition we can find the level of effort in an Open Access equilibrium, = ? 1? = = = ? =Rearranging for E: Substituting S for SOA: = 1? 1? ? ? ? Substituting EOA in Graham-Schaefer production function we get the harvest in an Open Access equilibrium, = ? = ? = ? ? 1? ? Marine Resource Management – Assignment 2 5 The profits per vessel on an Open Access equilibrium are as we already stated before equal to zero, = = ? = 200 ? 6. 400 ? 400 ? 3. 200 ? Profit will be zero for each individual firm and, consequently, for all the firms competing in this market; which makes sense once we are in the situation where companies can freely enter or exiting the market (similar to perfect competition).The solution for the Open-Access equilibrium is given by the following values of Effort, harvest and stock: = = ? = ? = ? . = 1? 1? ? ? = = , , ? , ? , ? , 1? 1? ? , ? , ? . ? ?. . = . = . 1. d) Optimal Economic Equilibrium The static, steady-state optimal economic level of effort, for the individual, that also maximizes the social welfare for society is found by computing the equation for sustainable rents and maximizing it for the Effort: = =0? = = ? ?2 ? ? =0? ? Maximizing, 2 ? ? =To solve for the static steady-state optimal economic level of the resource stock, SEFF, substitute EEFF into the equation for the resource stock with the Schaefer Yield Effort Curve, = 1? ? = 1? 2 = + 1? ? = 1 1? + 2 2 ? Marine Resource Management – Assignment 2 6 The Optimal Economic Equilibrium’s for Harvesting can be found using the Graham-Schaefer production function by substituting EEff and SEFF found before, = ? 2 ? = 1? ? ? ? 2 + 2 ? = ? + The solution for the Open-Access equilibrium is given by the following values of Effort, harvest and stock: = 1? ? ? = ? , = + = ? ? = ? , . + 1? ? ? , ? , ? . = = . = . . Marine Resource Management – Assignment 2 7 1. e)Comparison between Maximum Sustainable Equilibrium and both Open Access Equilibrium and Optimal Economic Equilibrium In this question we are asked to compare the maximum social sustainable solutions with both solutions of the Open Access and the Optimal Economic Equilibrium, respectively. The results acquired during the former exercises are summarized in figure 1 and figure 2: 14. 000 q. E(MSY). S 12. 000 q. E(OA). S H(MSY) 10. 000 Growth in Fish Stock (tons) . E(Eff). S H(Eff) 8. 000 H(OA) 6. 000 4. 000 2. 000 S(OA) 0 0 5. 000 10. 000 15. 000 20. 000 25. 000 30. 000 Fish Stock (tons) 35. 000 40. 000 45. 000 50. 000 S(MSY) S(Eff) G (S) q. E(OA). S Figure 1Growth and Harvest as function of stock size 2. 500. 000 E(Eff) E(MSY) E(OA) Total Revenue, Total Cost and Profit (â‚ ¬/hour fishing) 2. 000. 000 1. 500. 000 1. 000. 000 500. 000 0 0 500 1. 000 1. 500 2. 000 Effort (hour fishing) TR TC NB TC (Eff) 2. 500 3. 000 3. 500 4. 000 Figure 2Sustainable revenue, total costs and net benefit of fishing effort.From the previous figures we can easily see that, < < The MSY policy target is the best in a social point of view. It has the highest harvest maximum for a balanced level of stock with a medium level of effort. But in an economical point of view this equilibrium doesn’t bring the best results since its rent level is lower than for the optimal economic equilibrium. The efficient solution is the one that requires less effort to capture an intermediate level of fish, keeping the highest possible level of stock.This is why, economically, efficiency is the best solution, because it will allow future gene rations to capture similar quantities once preservation of stock is taken into account and additionally getting the higher rent. Furthermore and comparing with open access and sustainable yield, this solution requires less effort which is positive for the companies involved. In the situation of open access, as there is free access to the market, competition will lead to low individual harvesting levels and significantly high levels of effort and, at the same time, the level of stocks will be the lowest. < < < < ; 1. f) Assuming a schooling fishery Given that we are now in the situation of a schooling fishery, where the group of fishes is swimming in the same direction in a coordinated manner, and we have the following access given its profit condition ( = ? ? = 200. = = conditions: ? = and 0 ? ? , we are able to compute the outcome for open ), where we already know that ? ? = ? ? = 0.It is again important to note that i) In this case, as ? =2 ? = 200 ? 2 ? 400 = 0 betwe en exploiting or not the stock available. = 0 under all values of effort, we have a situation of indifference Marine Resource Management – Assignment 2 ii) Here, as abandon this market and no effort will be given ( = 0). The stock will not be exploited at all and initial stock will remain equal to final stock. iii) ? =3 ? = 200 ? 3 ? 400 = 200 ? =1 ? = 200 ? 1 ? 400 = ? 200 < 0, firms will not have any interest in fishing so they will simply Under this situation, as market, so they will apply all the effort available in order to maximize their own profits. As a result, stocks will be exploited until the end. > 0, companies have interest in competing in this Marine Resource Management – Assignment 2 10 2. Different possible policiesThe Food and Agriculture Organization of the United Nations (FAO) distinguishes two types of fisheries management: Incentive Blocking and Incentive Management. Regarding Incentive Blocking we can have management instruments that encoura ge effort and and harvest reductions by blocking them. For example, Total Allowable Catches (TACs), gear restrictions, like engine power limitations, limit fishing seasons, limit entry with buy-back schemes (licenses) or just increase the real cost of harvest through regulations. Incentive Adjusting pursuits to adjust the fisher incentives to make them compatible with society’s goals.In this case we are talking about taxes on effort or harvest and quotas. We will present you with some examples regarding these types of management. 2. a) Total Allowable Catches A Total Allowable Catch is a catch limit set for a particular fishery, generally for a year or a fishing season. In a derby fishery, the governments set a limit on the total allowable catch (TAC) for the year and the fishery is open on a specific date. As soon as TAC is reached, the fishery is closed for the year. The TAC is set below the overfishing level to assure that it is restrictive. Its goal is to allow the natura l resource to recover the stock levels.In this case the TAC was set below de level of harvesting for the Open-Access equilibrium at the value of 3500 tons (figure 3). 12. 000 10. 000 Growth in Fish Stock (tons) 8. 000 6. 000 4. 000 2. 000 0 0 5. 000 10. 000 15. 000 20. 000 25. 000 Fish Stock (tons) G(S) TAC q. E(TAC). S q. E(OA). S H(OA) 30. 000 35. 000 40. 000 45. 000 50. 000 Figure 3 Growth and Harvest as function of stock size for an Open Access equilibrium and a set TAC The TAC policy level of effort is significantly lower than the open access level. The TAC level equals Shaefer effort Yield curve in equilibrium, Solving for E: 3500 = 0,0002 ? 0. 000 ? = = ? , = ? ? ? ? , , ? ? ? . So this measure would allow the stock to recover for a level of, = , = 3500 ? 0,0002 ? 387,55 In a conservation point of view this is an effective measure, but in an economical point of view it has its issues. The tendency for fishing enterprises is to move towards an over-investment in equipment and labor in order to increase their share of the common TAC. It causes a major disruption in the seasonal pattern of a fishery as fishermen rush to obtain their share of the quota. Often vessels increase in size and add engine power both to operate with greater fishing power.In a consequence, economic conditions in the derby fishery are best at the start of a season when the fish stocks are most abundant, and steadily deteriorate as harvesting depletes the available stocks. These conditions induce a race for fish, which, in turn, results in overcapitalization (Figure 4). 2. 100. 000 Total Revenue, Total Cost and TAC level (â‚ ¬/hour fishing) 1. 600. 000 1. 100. 000 600. 000 100. 000 0 500 1. 000 1. 500 2. 000 2. 500 3. 000 3. 500 4. 000 -400. 000 TR Effort (hour fishing) TC p*TAC TC' E(OA) Figure 4 Sustainable revenue, total costs and Total revenue and total costs for the TAC level of fishing effort.Assuming that calculate the costs of overcapitalization, c’, and understand t his behavior: = ? ? = ? = 0 and that the stock levels will vary with the imposition of the TAC we can ?= ? = = , ? = , = From the function above we can understand the volatility of this policy. With the increase in the levels of stock the price will be higher and the fishermen have the incentive to invest in fleet capital that from society’s point of view is redundant. Also, the excess fleet makes the monitoring of harvesting very difficult and the TAC limit is exceeded. 2. b) Effort and harvest taxesFish is economically overexploited under open-access regime. The market price is high enough and the harvest cost low enough to make it a commercial resource. Corrective taxes can in theory bring marginal private costs into alignment with marginal social costs. Using taxes the managers reduce the fishermen revenues or raise the real cost of fishing. The idea is to find the tax rate, on either effort or harvest, that adjusts effort to the maximum economic yield level, EEff, that s hould be as said before the level at which the sustainable rent is maximum. With an effort tax the total cost per unit of effort is, = +Where tE is the tax per unit effort (ex. : $ per trawl hour or trawl year) and TC’ is the total costs with taxes. The effect of the effort tax is to increase total costs to such a level that the TC’ curve intersects the total revenue curve for the EEff, as you can see in figure 5. The tax on the effort was found as followed, = + ? ? tE = 800 â‚ ¬/hour fishing ? 200 ? 9. 600 = 400 + ? 1. 600 ? Note that for any value of effort the total costs with taxes is greater that the total costs. The effect of an effort tax increases the slope of the total cost curve for the industry.This implies that the total revenue, TR(E), is shared between the government, as the tax collector, and the Marine Resource Management – Assignment 2 13 fishing industry. The former receives the resource rent, ? Eff, and the fishers end up with the differenc e between the total revenue and the resource rent that is just enough to cover the costs of the fishers. 2. 500. 000 E(Eff) E(MSY) E(OA) Total Revenue and Total Cost (â‚ ¬/hour fishing) 2. 000. 000 1. 500. 000 ? (Eff) 1. 000. 000 500. 000 0 0 500 1. 000 1. 500 2. 000 Effort (hour fishing) TR TC TC' 2. 500 3. 000 3. 500 4. 000Figure 5 Use of corrective taxes on effort can equate social and private costs In the case of a harvest tax, the sustainable revenue of the fishery curve is affected, as you can see in figure 6. The harvest tax would be applied to the price as it is demonstrated next, ? = ? = ? tH = 133,33 â‚ ¬/hour fishing 200 + ? 9600 = 400 ? 1. 600 ? So in this case, the net price of the fish received by the fishers is also only just enough to support the costs. 2. 500. 000 E(Eff) E(MSY) E(OA) Total Revenue, Total Cost and Rent (â‚ ¬/hour fishing) 2. 000. 000 1. 500. 000 ? (Eff) 1. 000. 000 500. 000 0 0 500 1. 000 1. 00 2. 000 Effort (hour fishing) TR TC TR' 2. 500 3 . 000 3. 500 4. 000 Figure 6 Use of corrective taxes on harvest that can equate social and private revenues. The resource rent equals the total tax revenue in both cases, = = ? ? = 133,33 ? 9. 600 = 1. 280. 000â‚ ¬ = 800 ? 1. 600 = 1. 280. 000â‚ ¬ ? ? ? ? Thus, a tax on harvest contributes to decreasing the total revenue of the industry whereas a tax on effort contributes to increasing the industry costs. This would be a very interesting measure if the resource rent would be re-distributed, for example, to the fishing community avoiding any efficiency loss.But it is very hard to get to an agreement regarding this subject so the losses are real and the measure is not efficient in an economic perspective. Also, in a social point of view this measure is very demanding since it lowers the private revenues of the fishers, a theoretical and overall poor social group. 2. c) Individual Transferable Quotas – ITQ’s The ITQ’s are an improved version of the TACâ€℠¢s policy. It allocates a specific quota to each individual (ex. : a vessel, a corporation, etc. ) consistent with property rights theory. With this kind of policy fishermen don’t need to race against each other.We will proceed with short run rights, where fishermen own a share of harvest. The quota is computed from the previous established level for TAC and the fleet capacity, in this case we are going to use the value for the necessary equilibrium fleet previously calculated, ? = 3. 500? 20 = So, each of the 20 identical fishing vessels are allowed to harvest 176 tons per fishing season. To ensure that the expected results are lasting, the quotas should be transferable. There has to be a quota market to ensure that at any time the most cost-effective fisher does the fishing. If = 0, ? As St varies l will be adjusted and the quota market prices established. In a successful Optimal Economic managed fishery, resource rent per unit of effort would be: = ? 1. 280. 000 = 800â‚ ¬ 1.600 And the resource rent per unit of harvest would be: = ? ? These two prices indicate the equilibrium prices of effort and harvest quotas. The quotas market correct incentives for each boat to maximize its rent and to harvest with minimum costs, removing the incentives to over capitalization. So, in a conservation point of view and in economic terms ITQ’s are the best policy measure. . 280. 000 = 133,3â‚ ¬ 9. 600 ? 3. Recommendation statement for the policy decision ITQ’s ITQ’s are the best option as they are efficient both in a conservation point of view as in economic terms. Also, it’s the only measure that aligns the interests of the fishermen, the biologists and the governments. ITQ’s has several advantages like being efficient, as said before, it improves safety, as fishermen don’t need to rush to sea under bad weather conditions, improves the quality for consumer by spreading the fishing season and it incentives for mutual en forcement control.But all of its potential can be wasted if a good monitoring system is not assured. Comparing to a blocking measure, like TAC, its property rights condition correct what it was flawed with the previous policy. Now the fishermen have exclusive rights to a fishery resource, not having to expend effort until profits are zero and, consequently dissipating all the potential rents that the fishery resource could have generated. Marine Resource Management – Assignment 2

Marriott Corporation Essay

Each of these aspects of the financial strategy support Marriott’s growth objective, except for the repurchasing of undervalued shares, which is not based on feeling of significant undervaluing of the stock by the market, but based on an internally generated intrinsic value of the company. Marriott’s cost of capital estimation process involves consideration of debt capacity, cost of debt and cost of equity. This data, plus consideration of capital structure and effective tax rate, is then applied to the Capital Asset Pricing Model, using the U.S. Government 10-year bond as the risk-free rate and the spread between the S&P 500 composite and the U.S. Government 10-year bond rate. Beta is based on the last five years of monthly return data. The resulting corporate WACC is 10.22%. However, new investments in the different divisions requires the application of a hurdle rate that reflects the business risk of that particular unit, rather than the overall   corporate hurdle rate, which is primarily applicable to corporate capital expenditures, such as headquarters and IT support systems. The table below summarizes the WACC for each Marriott division based on its mix fixed and floating rate debt, capital structure, and applicable unlevered beta for its industry. Introduction Marriott Corporation is diversified company in the lodging, restaurant and contract services. Its lodging business unit consisted of managing the operation of 361 hotels of a variety of star ratings. Its restaurant business unit ran and owned a handful of fast food and diner chains. One of the perennial challenges that Marriott management faced was the close integration of its financial strategy, growth objectives, determining the appropriate hurdle rate for investments, and how to add a capital cost component to incentive compensation plans. Marriott’s Financial Strategy The overall objective for Marriott’s vice president of project finance, Dan Cohrs, was to support the company’s growth objective in being the most profitable company in its lines of business. To support this growth objective, Marriott developed a financial strategy that consisted of four tactics – manage rather than own hotel assets, invest in projects that increase shareholder value, optimize the use of debt in the capital structure, and repurchase undervalued shares. Manage Rather than Own Hotel Assets Marriott would develop hotel properties and then sell them off to investment partnerships. Its typical deal would consist of it being granted a long-term contract to operate and manage the property on behalf of the owner, where it receives 3% of revenues as compensation and 20% of profit over and above a specified return for the owner. If you wanted to maximize growth and shareholder value, this was a more prudent approach to being in the lodging business because the company wouldn’t be held down by large amount of debt associated with these properties and it eliminated a lot of long-term market risk. If a hotel went under, Marriott’s risk was limited to the portion of debt that it guaranteed instead of the entire amount. Therefore, this tactic supported the company’s growth objective because it did not tie up huge amounts of investment capital in fixed assets and allowed it to focus on activities and projects that could generate significant revenue growth. If Marriott could make a hotel very busy, it only had to make small increases in staff to accommodate large increases in business. Plus, its profitability would accelerate once it was able to clear its property owner’s return requirement. By being service oriented, Marriott greatly reduced the capital intensity of its lodging business unit. Invest in Projects That Increase Shareholder Value Technically speaking, this is a tactic espoused by every company. Marriott purposed to only invest in NPV positive projects based on the hurdle rate appropriate for the type of investment. The pro forma cash flows for investment opportunities were developed at the division level using corporate templates. This provided consistency in methodology while allowing for variation in unit specific assumptions. This will also support the company’s growth objective because it promotes Marriott getting the best results for its investment funds to maximize the value created by the projects it invests in. It also means that projects in riskier areas have to be that much profitable to generate the NPV to make an investment competitive versus alternative investments in less risky units. Optimize the Use of Debt in the Capital Structure Marriott used a targeted interest coverage ratio to determine its optimal use of debt instead of a debt-to-equity ratio. Because this approach bases debt capacity primarily on financial operations instead of market capitalization, it is supportive of growth by limiting debt based on near term financial performance rather than the ups and downs of the capital markets. Repurchase Undervalued Shares Marriott calculated its own valuation of its stock called its warranted equity value. Whenever its stock price went below the warranted value, Marriott would buy back stock. This tactic does not support growth because Marriott is using an intrinsic value of its stock to supersede the market value of the stock, which is the best indicator of the value of a publicly traded company. The company also assumed that this was the best use of cash and debt than investments. Although companies have used debt to repurchase stock, it is usually to try to â€Å"game† the system and improve the profitability related financial ratios by reducing the amount of total equity and the number of shares outstanding. Three more legitimate reasons for Marriott to buy back its stock would be mitigate the impact of stock dilution due to the exercise of stock options used as incentive compensation; to disburse excess funds to shareholders without the tax penalty associated with dividends; or to cheaply remove stock when the market it trading it at a steep discount to historical trends when the company is performing well. Buying back stock when it falls a small amount below an intrinsic value does not contribute to growth and those funds could have probably been used in a profitable, value-increasing project. Marriott’s Cost of Capital Estimation Process Marriott uses the weighted average cost of capital (WACC) to determine its corporate hurdle rate, as well as estimate the hurdle rates for its different divisions. The process begins with the company determining its debt capacity, cost of debt and its cost of equity, also being a function of the amount of debt. After determining the corporate level cost of debt, it allocated a portion of that debt to each of the business units to facilitate their unit hurdle rates. Each unit had a different debt weighting and cost of debt. Marriott annually updated its cost of capital for making investments. It does make sense for Marriott to determine a hurdle rate for its different business units because it is a diversified company, even if it is related diversification. Its business units carry the business risk of the industries they inhabit, regardless of the corporate make up of Marriott. To make the best use of Marriott funds and maximize value, Marriott has to take into account the risk associated with each unit’s projects. Having a hurdle rate for each business unit eliminates bias in project selection that would occur if it used the corporate hurdle rate. Marriott’s Corporate Weighted Average Cost of Capital In its use of the weighted average cost of capital (WACC) formula below, Marriott uses its long-term debt to total capital ratio (total capital = total assets – current liabilities) for its debt weighting. Cost of Equity To determine the cost of equity, Marriott used the Capital Asset Pricing Model (CAPM), which relates the returns for a single stock against the excess returns for the market over the risk-free rate. Marriott has a target debt percentage in capital of 60% for the company. Its 1987 debt percentage is 58.8% for which a beta of 1.11 was calculated based on the past five years of monthly returns. The average corporate tax rate for the past five years is 43.7%. The target debt percentage in capital is 60% and is treated as the debt-to-value ratio. For the target percentage the beta must be unlevered and then relevered based on the equation below. This produces a relevered beta of 1.135. The market risk premium is based off of the spread between the S&P 500 composite returns and long-term U.S. government bond returns of 7.92%. The risk-free rate is 8.72% based on the 10-year U.S. government bond maturity rate. Using the CAPM equation below, this produces a cost of equity of 17.71%. Cost of Debt Marriott has fixed and floating debt. Its projected mix will be 60% fixed debt and 40% floating debt. Overall, Marriott has estimated that its debt risk premium is approximately 1.30% above U.S. government debt securities. Fixed rate corporate debt is going to be consistent with 10-year maturity U.S. government debt and the floating rate debt is going to be consistent with 1-year maturity U.S. government debt. The 30year debt is not applicable because Marriott manages rather than owns the hotel properties it manages. The resulting weighted cost of debt is 9.29%. Debt Type Corporate or Firm Level WACC By applying Marriott’s corporate cost of debt and cost of equity from the previous sections, we calculate a WACC of 10.22%. Which Investments Can the Corporate Hurdle Rate by Applied To? The corporate or firm level hurdle rate cannot be applied to all projects because of the bias it presents when business units have less or more risk than the company as a whole. However, there are investments to which the corporate hurdle rate would be applicable. That would involve any capital expenditures on behalf of the corporate parent, including buildings, as well as enterprise resource systems and any other support systems that serve all three business units. For example, the three business units should be using the same system to do financial reporting and accounting. If Marriott only used the corporate hurdle rate for all investments, in the long-run, it would do poorly because the rate would cause the company to invest in projects that are too risky and avoid projects that could increase company value. Basically, Marriott would be worth a lot less than it otherwise would have if it didn’t take a one-size-fits-all approach to its hurdle rate for different projects in the business units. Or worse, it could go out of business or be acquired by a competitor that had a more rational approach to its project selection process and was able to buy Marriott with the value it had created. Cost of Capital for Individual Divisions The process that Marriott employs to determine the corporate hurdle rate can also be applied to its different divisions. For the lodging and restaurant divisions, the cost of equity can be determined by using the weighted average unlevered beta for a group of peer companies and then relevering the beta for that division’s leverage circumstances. Contract services will require a residual approach for determining its cost of capital. Peer groups were used to calculate weighted average unlevered betas for the groups, using 46% as the highest marginal corporate tax rate for the fiscal year ended June 30, 1987. For the lodging and restaurant divisions, the same risk-free rate and market risk premium was used. Although both divisions own long-lived assets, they are closer to 10-year versus 30-year assets, other than any facilities owned. As for the lodging and restaurant properties, the bulk of the capital investment is made in renovation, updating or modernizing hotel properties and updating of the restaurants. For example, Marriott will periodically update the furniture, dà ©cor, color and amenities at the properties it manages to keep them competitive. This is a regular part of the business, so long-lived assets in those properties would be replaced anyway. This even occurs in restaurants, although less frequently. Contract services would also operate its long-lived assets in the same time frame. To determine the cost of equity for the lodging division, a group of peer companies were gathered and key data related to capital structure, revenue and beta was compiled to calculate a weighted average unlevered beta for the group. That beta was relevered based on the lodging divisions projected debt percentage in capital of 74% as the debt-to-value ratio for the operating unit, resulting in a cost of equity of 20.13% To determine the cost of equity for the restaurant division, a group of peer companies were gathered and key data related to capital structure, revenue and beta was compiled to calculate a weighted average unlevered beta for the group. That beta was relevered based on the lodging divisions projected debt percentage in capital of 42% as the debt-to-value ratio for the operating unit, resulting in a cost of equity of 19.08% With the cost of debt and cost of equity relative to its industry, the restaurant division cost of capital is equal to 13.45%. Contract Services Division To calculate the cost of capital for the contract services is more complex because there aren’t any publicly traded peer companies to compare against and privately held firms either do not report their results or do not report results compliant with the financial reporting requirements of publicly traded companies. Based on the projected mix of fixed and floating debt, the cost of debt for the contract services division is estimated at 10.07% A residual approach will be required to determine the cost of equity for the contract services division according to the formula below using the unlevered betas, weighted by identifiable assets. Solving the formula for ÃŽ ²C will provide us with the last piece of information needed to calculate its cost of capital. This results in an unlevered beta of 0.610. Based on the projected capital structure of the division, it levers to a beat of 0.839. With the cost of debt and cost of equity applicable to this business unit, the contract services division cost of capital is equal to 11.33%. Conclusion There are already many assumptions made in a traditional cost of capital calculation for a single-industry company. When a company is diversified, like Marriott, it cannot use a single corporate cost of capital for making investment decisions. It must make decisions for each division according to the business risk faced by that business unit because the level of risk varies from industry and that must be accounted for. Otherwise, a firm will engage in biased decision-making, if they use discounted cash flow and net present value for making investment decisions because a single hurdle rate will inflate the value of some projects, while lowering the value of others. Epilogue To stay competitive and generate the most value that they can for shareholders, companies review and update their strategies. Marriott Corporation is no different. Not long after the time period associated with this case, Marriott began to take dramatic steps to maximize shareholder value. First, the company sold is restaurant operating division in 1990 (White, 1989). The competition from industry leaders was too intense and rapid expansion would have required a lot of additional capital. Subsequently, the company would go through multiple spinoffs. In 1993, the company spun off Marriott International, which managed and franchised hotels and retirement communities (Marriott International, 2012). The remaining company changed its name to Host Marriott Corporation and owned many of the properties managed by Marriott International. In 1995, Host Marriott Corporation spun off some of the contract services business with the name Host Marriott Services. This allowed Host Marriott Corporation to focus on its real estate assets. In 1998, Marriott International spun off its management services business in a merger with Sodexho to create Sodexho Marriott Services. Later that year, Host Marriott Corporation spun off is senior retirement real estate business as Crestline Capital Corporation. At the end of 1998, Host Marriott Corporation converted into a real estate investment trust called Host Hotels & Resorts (Marriott International, 2012). The last spin off conducted by Marriott International occurred towards the end of 2011, where it spun off its time share operating segment as Marriott Vacations Worldwide Corporation (NYSE: VAC). Marriott International is only involved in lodging now and reorganized into four lodging divisions – North American Full-Service, North America limited-service, International Lodging and Luxury Lodging. In terms of the financial strategy outlined by the Marriott Corporation in 1987, that strategy continues in Marriott International. It doesn’t own the properties. It just manages and franchises them. At the end of fiscal year 2011, its debt-to-market value ratio is 0.1579. The company appears to be attempting to minimize the amount of debt it uses. The cost of debt is approximately 5.485% and the cost of equity is approximately 11.44%. Marriott International’s WACC, based on 2011 financial statements is 10.12%. References Marriott International (2012). 2011 Annual Report. Retrieved from http://investor.shareholder.com/mar/sec.cfm?DocType=&DocTypeExclude=&Sort Order=FilingDate%20Descending&Year=&Pagenum=4 Marriott International (2012). Frequently Asked Questions. Retrieved from http://investor.shareholder.com/mar/faq.cfm White, G. (1989, December 19). Marriott to Sell Its Restaurants, Focus on Hotels : Services. LA Times. Retrieved from http://articles.latimes.com/1989-1219/business/fi-598_1_marriott-s-bob-s-big-boy

Strategic management of human resources management Essay

Strategic management of human resources management - Essay Example This type of relationship exist between co-workers, and between workers and supervisors, they help employees to listen to others, understanding of acceptance, team building, understanding of workers life issues, avoiding discrimination and in conflict resolution. Employment partnership-it can be defined as the way partnership is developed in the work place and this type of partnership has been seen to help an organisation to be more productive. It involves building strong bonds of relationship in an organisation. Employment partnership is a way forward in integrating employees, such relationships play a major role in environmental scanning, and this can be viewed as the identifying and analyzing external opportunities and threats that may be crucial to the company's success. This partnership is beneficial to the worker and the organization, workers have different needs and therefore their benefits and job security are major determinants of their performance. Consultation of workers is also a major determinant of performance; the employees should be briefed and involved in decision making of an organization. Workers should be allowed to raise their views and opinions in decision making. Communication with employees should include discussion on the overall progress, agreeing on potential progress, discussing how current performance is in line with the long term goals and planning on actions to be undertaken to improve the organization current state. HOW EMPLOYEE.PARTNERSHIP FIT WITH SHRM The main goal of forming these relationships in an organization is to improve on productivity and efficiency of the organization. This will help in reviewing on the overall progress, an organization that creates an environment based on understanding; better communication and honesty will be successful. The company is in a position to resolve conflicts that result and therefore this does not affect its performance. The relationships that exist helps achieve goals because they help match personal needs with work life. This type of relationships help build trust in the work place, training is the most useful tool in forming this type of partnership because attitude change is difficult and therefore t

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Mobilizing Anglophone Children in WW II - Article Example The juvenile justice authorities and school boards implemented programs to guide and socialize children and adolescents as a way for them to learn discipline. The youth were engaged in relevant socio-civic work to keep them busy and to build their character. Women were placed in a great dilemma while simultaneously working and tending to their children, and they solicited support from family members, neighbours, friends and the federal government to assist them in caring for their children while they spent time at work. This raised scepticism on women’s capability to do both, and were blamed for the rising rate of juvenile delinquents who were allegedly neglected by their parents. Gender stereotypes for children and youth were propagated by society despite the efforts of women to beyond their gender-prescribed duties in order to work outside the home and contribute to war efforts. Schools were successful in encouraging children and youth to be more productive with their time. Sentiments about war and patriotism were highlighted in order for them to be more conscientious with their own activities. 3. A critical assessment of the article: Myers and Poutanen were able to build up the plight of children and adolescents as a consequence of war’s demands on their parents’ service to the country. The article successfully showed a glimpse of how it was being led to juvenile delinquency and how society in general collaborated with various networks in order to save the children from living wasted, ill-fated lives as casualties of war. It provided hope to the readers that even after the devastation of war, lives of people can continue to greener pastures. 1. The Thesis Statement: During the war, Japanese Canadian women suffered atrocities being of Japanese descent despite the fact that they were born, raised and even educated in Canada.

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Statutory duty against employer - Essay Example The case of Wilsons & Clyde Coal Company v English3 established the implied basic duties that employers owe their employees, the breach of which entitles the latter to award of damages in an action for tort on the broad ground of negligence. These duties are: selection of competent staff that had the benefit of proper training; proper and suitable plant; proper and fit place of work, and; safe system of work. The aforecited duties are deemed primary liability of employers. In McDermid v Nash Dredging and Reclamation Co Ltd,4 the Court awarded compensation to the claimant, employee of the therein defendant, who was injured whilst performing his functions as a deckhand on a tug, owned by a Dutch company working in the dredging operations with the defendant company. The tug captain, who was employed by the Dutch company, carelessly mishandled the tug movement resulting in the injuries sustained by the claimant. The Court sided with the claimant notwithstanding that the injuries was caus ed by the tug captain, who was not under its employ, on the ground that the responsibility to keep a safe system of work was its personal responsibility and therefore, non-delegable. An action for breach of statutory duties necessarily requires that the employer has breached a provision of a statute or law. An equally important consideration in this action is the determination that the statute itself contemplates granting the claimant a right to a civil action. An action for breach of statutory duties necessarily requires.

Hybridoma technology Essay Example | Topics and Well Written Essays - 1500 words

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Organ Systems & Evolution Assignment Example | Topics and Well Written Essays - 1000 words

Organ Systems & Evolution - Assignment Example The circulatory and lymphatic systems are also connected, for lymph in the lymphatic system comes from blood. Lastly, secondary lymphedema, an obstruction of lymph flow, is discussed with its similarities to atherosclerosis. Atherosclerosis and Heart Attack Normally, the heart supplies oxygen to all parts of the body to keep them alive, and at the same time, oxygen-rich blood must be supplied to the heart muscle to keep it alive. However, in the case of atherosclerosis, or the buildup of plaque in the arterial walls, the flow of oxygen-rich blood to a particular section of a heart muscle, or myocardium, can get blocked. If the blood supply to the heart muscle is greatly reduced or completely prevented, it will eventually cause the muscle to die. Although there could be other causes for a heart attack, the one caused by this buildup of plaque, or atherosclerosis, is known as coronary heart disease, or CHD (â€Å"What is a Heart Attack,† NIH, 2011). The reason behind the name is the fact that the coronary artery is responsible for the supply of oxygen to the heart. (Matthews, 2011) Coronary heart disease is caused by the buildup of plaque for many years, and will most likely lead to a heart attack. As plaque accumulates in the wall of the artery which supplies oxygen-rich blood to the heart, this plaque may cause a rupture inside the artery and thus cause a blood clot to form on the surface of the plaque. If this plaque grows in size and becomes large enough, it may completely block all blood flow to the heart muscle (â€Å"What is a Heart Attack,† NIH, 2011). The complete obstruction of the blood will cause a myocardial infarction, or heart attack. However, partial blockage may only cause chest pain. (Matthews, 2011) Heart attacks may not kill the person and may simply cause heart failure. Heart failure can lead to other problems like dyspnea, or shortness of breath, and edema, or swelling of the body due to buildup of fluid the heart would normall y get rid of as waste if it were functioning efficiently. (Sourfer, 2002) Arteries, Veins and Capillaries Blood vessels are hollow tubes that do not only hold the blood within the body but also circulate them across organs in the body. There are three types or varieties of blood vessels. The arteries transport oxygenated blood away from the heart. The capillaries are the ones that connect the arteries and the veins, and finally the veins carry the deoxygenated blood back to the heart. (â€Å"Blood Vessels,† 2011) The main function of arteries is to carry blood from the heart to all the other organs, except for the pulmonary arteries that carry deoxygenated blood towards the lungs. Arteries are thick-walled blood vessels and thus may be able to withstand constant stretching every time blood rushes through them for every heartbeat. The thick walls of the artery protect it from the high pressure of blood flow coming from the ventricles of the heart. (â€Å"Blood Vessels,† 2000) Veins, on the other hand, may undergo less pressure coming from the blood flow from organs. It also follows that the wall of a vein is thinner than that of an artery. The function of veins is generally to carry deoxygenated blood from the organs towards the heart, except for pulmonary veins that carry oxygenated blood from the lungs towards the heart. Moreover, veins have a special purpose of carrying waste

Criminal Evidence Law - Evidential and Legal Burden Essay

Criminal Evidence Law - Evidential and Legal Burden - Essay Example In this case, the prosecution has a duty to link the facts surrounding the two parties’ visit to the deceased’s house and to his eventual murder. The facts should prove on the balance of probabilities that actions of the accused may have caused the death. A fact-finder working with the prosecution would be tasked to collect the facts and link them to the crime. A jury would then have the final say on whether or not the murder case should proceed. The evidential burden in this case, which the jury will be tasked to determine is as follows: a) the accused visited Denzil’s house over an unsettled debt; b) William allegedly remained outside, possibly to scare people away within his imitation of a gun while Altin went in; c) Altin immediately attacked the victim; d) the victim died of the injuries sustained in the attack. In this case, there is no gap in the facts, which could have been prompted by a fall, for instance, on his way to the hospital1. Apart from the evidential burden, Article 6 of the European Convention on Human Rights (ECHR), providing for the right to the fair trial requires the prosecution to prove beyond the balance of probabilities that the actions of the two parties accused of Denzil’s murder have a legal basis. In this case, the prosecutor must prove that the alleged actions of Altin had a substantial cause on the Denzil’s death, but does not necessarily need to be the only or largely the cause of the death. This implies the two could be charged with the murder of Denzil if the prosecution established that his injury by the accused substantially contributed to his death whether or not he had underlying health conditions. A judge would be tasked to determine whether the legal burden can sustain trial. Altin would find it hard to prove that he was acting in self-defence because he intentionally went to Denzil’s place. In addition, the immediacy of the attack lends credence to a pre-planned murder whose time had come.  

Post Traumatic Stress Disorder (PTSD) Research Paper

Post Traumatic Stress Disorder (PTSD) - Research Paper Example .............9 Section Three 3.1 Treatment and results........................................................11 References...............................................................................15 Post-traumatic stress disorder Section One 1.1 History Post-traumatic stress disorder is an anxiety disorder that is precipitated by a traumatic event, usually a life-threatening situation either for the individual, or for a bystander that the individual is witnessing. When the period of adjusting and coping does not abate after a short length of time and the traumatic responses have only gotten worse, an individual is usually then diagnosed with post-traumatic stress disorder. Even though the American Psychiatric Association only began recognizing post-traumatic stress disorder in the early 1980s, and thus including it in the Diagnostic Manual of Mental Disorders, this anxiety disorder has been noted to have been around for many centuries. Many of the apparent causes of post-trauma tic stress disorder, which will be discussed in-depth in due time, most of which involve putting the lives of others at risk, have been around since the dawn of mankind. Battle, the tragic loss of a loved one, or else someone finding themselves in a situation in which their safety is compromised have all been a part of the human experience. As such, it can be assumed that post-traumatic stress disorder dates back thus far. ... This was before the disorder was officially recognized. It was not until the aftermath of the Vietnam War that the intensity of post-traumatic stress disorder became clear, though it was originally classified as a disorder directly connected to the Vietnam War itself (Fredericks, 2010). The veterans, many of whom were diagnosed with what was first known as post-Vietnam syndrome, became active in making it known that post-traumatic stress disorder was a real disorder, one that needed proper research so that treatment could be given. 1.2 Symptoms The symptoms of post-traumatic stress disorder normally do not make themselves known until approximately three months after a traumatic event. However, there have been some cases in which symptoms did not appear for many years after the individual experienced or witnessed the event. There are three categories that symptoms pertaining to post-traumatic stress disorder are grouped, which are intrusive memories, avoidance and numbing, and increas ed anxiety or emotional arousal. Intrusive memories: When a person shows symptoms related to intrusive memories, they have flashbacks or dreams about the event. They tend to relive the event for many minutes at a time, though some patients have relived the traumatic experience for days at a time. These flashbacks and dreams are undesirable to the individual, constantly reminding them of what took place and causing them to feel anxious. Avoidance and numbing: In response to traumatic events, most people prefer to cope by avoiding anything to do with the event. However, someone who has is suffering from or has developed post-traumatic stress disorder really goes out of the way to avoid reminders of the event that took place. They avoid talking and

Writer is free to pursue any field of inquiry Research Paper

Writer is free to pursue any field of inquiry - Research Paper Example This is arguably the greatest difference and point that makes the beloved better since unlike the summer’s day the beloved is eternal. Moreover, the final lines of the piece explains how the beloved shall live forever in the words of the poem. Additionally, the couplet cements this by arguing that the beloved shall live eternally as long as men breathe and eyes see. Nevertheless, to clearly understand the sonnet there it is important to focus more on the overriding theme and also the general feeling prevalent in the sonnet. Determination of the overriding theme requires a critical evaluation and analysis of the main emergent idea in the sonnet. Theme are important since they give a clearer and better understanding of the main argument in a poem. For this particular sonnet, the overriding theme can be considered to be love. This is because the greatest part of the sonnet mainly focuses on praises directed towards the beloved. Unlike the summer’s day that seems to lack in so many respects such as too short, too hot, and too rough among others, the beloved carries all the desirable aspects of a perfect summer day. For example, the second line states â€Å"Thou art more lovely and more temperate†. Inclusion of such praise towards the beloved shows the speaker’s view and in totality love is the most prevalent theme in the sonnet. Incorporation of emotions in poetry is considered to be of great importance. This is because presence of emotions in a poem creates a platform for readers to interact with the main idea of the poem. Since most poems are written in a seemingly hidden meaning technique, there is need to incorporate an aspect that can act as an intermediary between the persona and the reader hence enhancing understandability. Shakespeare has managed to invoke readers’ emotions through the comparison tactic. There is a general feeling of tenderness as the reader goes through

Evacuation was a great success Essay Example for Free

Evacuation was a great success Essay Source A is a picture of all the happy school children all lining up to be evacuated. Now this is not a reliable source when trying to prove if evacuation was a success or not. This is due to the fact that during the war the government had emergency powers. This gave them power all over the newspapers. So this meant that the newspapers posted propaganda about how successful the evacuation was. In the picture, there are all smiling faces, and no signs of a resistance. It almost looks like the kids want to be evacuated. This photo has been used to give an overall positive impression of the evacuation. Now in the picture, the kids look happy, but in reality there was a lot of resistance against evacuation. Parents didnt want their kids to leave them, and kids didnt want to leave their parents. In Grimsby, more than seven thousand children were eligible to be evacuated, but on the day only 1,854 children had been evacuated. Showing that there was a reluctance to evacuate children. In the evening telegraph it even described the evacuation as Though some omnipotent pied piper had been thought the cities of England, stripping them of their children. Source B is a teachers recollection of being evacuated with her children from her school. Now this has to be looked at carefully, as it was written a while after in 1988. Now memories could be different. She explains, All you could hear was the feet of the children and a kind of murmur. This shows that the children arent the smiling people as shown in the papers. This shows that they werent really pleased about leaving their homes and families to live with complete strangers. This could also not be reliable because it could be over exaggerated. Source C is an extract from a novel about evacuees. Now before we analyse this we have to take into consideration that this was written for the younger audience. So facts could have been altered to make the story more interesting. First of all, we can rely on this source too highly as it is a fiction piece, which is made up. And also it will not be too graphic as it is intended for the children. Secondly it was written in 1973, nowhere near the time of the war. Source D is an appeal for more people in Scotland to provide homes for evacuee children. Now this source was probably published in a newspaper. Seeing as first looks at it, it looks like propaganda. In the passage, it is trying to get more people to take evacuees in. It does this by saying two of the strongest words ever, thank you. These words are the words that most reach out to the people, as humans like being appreciated. Now after they feel good form the thank you, thats when they appeal to you to get those sweet looking children in the picture. But it wasnt like this. Some of the children contained lice, and some had never had a bath in their lives. Some of them were under clothed, some had came in all the clothes they had. These mislead people thinking that they would get a nice quiet child, clean and happy. Instead they got unhappy crying children, suffering from chronic bedwetting. Source E is an Interview with a parent in may 1940. Now 1940 was the beginning of the bombing of the cities began. And during the text, you can see that he was reluctant to evacuate his child, and kept him with him in the end. As you can see from the way he speaks, he has a lack of knowledge and therefore is scared of the unknown; he has no concept of what it would be like to live in the shires. You can tell that he knows if the kid goes away, he knows that the dad dies, and the kid will come back to no family what so ever. This is a useful source because it gives us an idea of what the parents thought about the evacuation. I agree with the fact that the evacuation was a success. It kept the children safe, but the Evacuation failed in keeping the children mentally safe. Most parents who preferred to keep their children with them instinctively realised what was not known: That sending off young children could have serious repercussions.

Capital market of india vs usa

Capital market of india vs usa INDIAN FINANCIAL SYSTEM: MONEY AND CAPITAL MARKET IN INDIA:- A money market is not a market for money but it is a market for near money; or it is the market for lending and borrowing of short-term funds. It is the market where the short-term surplus investible funds of banks other financial institutions are demanded by borrowers comprising individual companies and government. Commercial banks are both suppliers of funds in the money market and borrowers. The Indian money market consists of two parts: the unorganized and the organized sectors. The unorganized sector consists of indigenous bankers who pursue the banking business on traditional lines and non-banking financial institutions(NBFCs) .the organized sector comprises the reserve bank, the state bank of India and its associates banks, both Indian and foreign. The organized money market in India has a number of sub markets such as the treasury bills market, the commercial bills market and the inter-bank call money market. The Indian money market is not a single homogenous market but is composed of several sub-markets, each one of which deals in a particular type of short term credit. CALL MONEY MARKET: The market is also known as money at call and short notice. The market has actually two segments viz. (a) the call market or overnight market, and (b) short notice market. The rate at which funds are borrowed and lent in this market is call money rate. Call money rates are market determined i.e. by demand for and supply of short term funds. The public sector banks for about 75 percent for the demand (that is, borrowings) and foreign banks and Indian private sector banks accounts for the balance for the balance of 20 percent of borrowings. Non-banking financial Institutions such as IDBI, LIC, GIC, etc enter the call money market as lenders and supply up to 80 percent of the short-term funds. The balance of 20 percent of the funds is supplied by the banking system .while some banks operates both as lenders and borrowers, others are eithers only borrowers or only borrowers or only lenders in the call money market. Bill Market in India: The bill market or the discount market is the most important part of the money market where short-term bills-normally up to 90 days-are brought sold. The bill market is further subdivided into commercial bill market and Treasury bill market. The market for commercial bills has not become popular in India. Unlike in London other international money markets where commercial bills are extensively bought and sold (i.e. discounted). The 91 days treasury bills are the most common way the government of India raises funds for the short period. Some years ago, the government had introduced the 182 day treasury bills which were later converted into 364-day treasury bills; the government introduced the 14-day intermediate treasury bills. Features defects of Indian money market: Existence of unorganized money market Absence of integration Diversity in money rates of interest Seasonal stringency of money Absence of the bill market Highly volatile call money market Absence of a well organized banking system Availability of credit instrument. Composition of Indian capital market: Capital market is the market for long term funds, just as the money market is the market for short term funds. It refers to all the facilities and the institutional arrangements for borrowing and lending term funds (medium-term and long-term funds).it does not deal in capital goods but is concerned with the raising of money capital for purposes of investment. The demand for long-term memory capital comes predominantly from private sector manufacturing industries and agriculture and from the government largely for the purpose of economic development. As the central and state governments are investing not only on economic overheads like transport, irrigation and power development but also on basic industries and sometimes even in consumer goods industries, they require substantial sums from the capital market. The supply of funds for the capital market comes largely from individual savers, corporate savings, banks, insurance companies specialized financing agencies and the government. Among the institutions, we may refer to the following: Commercial banks are important investors, but are largely interested in govt. securities and, to a small extent, debentures of companies; LIC and GIC are of growing importance in the Indian capital market, though their major interest is in government securities; Provident funds constitute a major medium of savings but their investment too are mostly in govt. securities; and Special institutions set up since independence , viz, IFCI, ICICI, IDBI, UTI, etc. -generally called development financial institutions (DFIs) -aim at supplying long term capital to the private sector. There are financial intermediaries in the capital market, such as merchant bankers, mutual funds leasing companies etc. which help in mobilizing savings and supplying funds to investors. Like all markets, the capital market is also composed of those who demand funds (borrowers) and those who supply funds (lenders).an ideal capital attempts to provide adequate capital at reasonable rate of return for any business which offers a prospective yield high enough to make borrowing worthwhile. The capital market is broadly divided into two the gilt-edged market and the industrial securities market. The gilt-edged market refers to the market for government and semi govt. securities, backed by the RBI. The securities traded in this market are stable in value and are much sought after by banks and other institutions. The industrial securities market refers to the market for shares and debentures of old and new companies. This market is further divided into the new issue market and old capital market meaning the stock exchange. The new issue market -often referred to as primary market- refers to raising of new capital in the form of shares and debentures whereas the old issue market -commonly known as stock exchange or stock market-deals with securities already issued by the companies. It is also known as the secondary market. Both markets are equally important, but often the issue market IS MUCH MORE IMPORTANT from the point of view of economic growth. DFIs supply funds for investment: financial intermediaries like merchant bankers help the corporate sector to raise funds in the capital market. SPECIAL FINANCIAL INSTITUTIONS THE CAPITAL MARKET: Soon after independence, the govt. of India set up a series of financial institutions to be of special help to the private sector industries. IFCI was the first of these institutions (1948).it was followed by SFCs (set up by state govt. with cooperation of RBI other banks) to provide long term finance to small and medium industries. ICICI (1955), IDBI (1964) UTI (1964) followed soon after.LIC was set up in 1956 to mobilize individual savings and to invest part of savings in the capital market. Commercial banks the capital market: The operations of commercial banks have so far been confined to the purchase and sell of govt. and other trust securities. Their holdings of industrial securities viz. shares and debentures are very small. But in recent years, banks have been increasingly participating in term through subscribing to the shares debentures of special financial institutions. They are also setting up financial subsidiaries, known as merchant houses, mutual funds, venture capital companies, leasing companies, etc. to mobilize funds. Non banking financial companies (NBFCs): In recent years ,NBFCs, variously called as finance corporation loan company, finance company etc. have mushroomed all over the country. These companies, with a very little capital of their own have been raising deposits from the public by offering attractive rate of interest other incentives. They advance loans to wholesale and retail traders, small scale industries and self- employed person. Bulk of their loans is given to parties which dont either approach commercial banks or which are denied credit facilities. The finance companies give loans which are generally unsecured. Besides giving loans and advances to small sector, they run chit funds, purchase and discount hundies and have also taken up merchant banking, mutual funds, leasing etc. Essentially, these finance cos. are banks, since they perform the basic twin functions of attracting deposits from the public and making loans.RBI say The rapid growth of NBFCs especially in the nineties, has led to a gradual blurring of dividing lines between banks and NBFCs. Since NBFC are not regarded as banking companies they didnt come under the control of RBI. There is no minimum liquidity ratio or cash ratio between their own funds and deposits. The RBI has mentioned 5 kinds of NBFCs Leasing Financing Companies Hire purchase finance companies Loan finance companies Investment finance companies Residuary non-banking companies (RNBCs) Future of NBCs: The NBFCs are now emerging as a growing segment of the Indian financial system both the government and RBI appreciate the need for their orderly and healthy development with appropriate prudential safeguards. It is to regulate NBFCs and to improve their financial health that amendment to RBI act, 1934 was carried out. Mutual Funds: In recent years, mutual funds are the most important among newer capital market institutions. Several public sector banks and financial institutions have set up mutual funds on a tax-exempt basis. Their main function is to mobilize the savings of general people invest them in stock market securities. Growth of mutual fund: In the 1990s.MFs found it hard to attract investors, the competition for funds was hotting up from banks and the government was offering 14% interest on medium term securities, banks-12%, HDFC-14%, IDBI-15.75%. Under these conditions, it was difficult for mutual funds to rival such high yields on debt instruments. They also found it hard to meet high expectations of investors who were yet to break out of the get-rich-quick syndrome. Accordingly, the first wave of mutual funds failed. During 1998-99 and 1999-00, however the mutual fund sector registered significant growth. Economic conditions were good; stock exchanges were booming and the govt. had given tax concessions. All these help in the return of faith of people in mutual funds. The revival of mutual funds since 1995-96 was due to the entry of corporate majors-TATA, BIRLA, RELIANCE SBI. Many other followed with products designed for investor specific need. Investors left the banking system and flocked to mutual fund. STOCK EXCHANGE IN INDIA: In a modern capitalist economy, almost all commodities are produced on a large scale; and large scale production means large scale of capital. The public firms issues stocks and bonds and enable those with surplus funds to invest them profitability in them. The stock market is a place where stocks and shares other long term commitments or investments are bought and sold. History of Stock Exchange in India: The first organized stock exchange in India was started in Bombay when the Native Share Stock Brokers Association known as Bombay stock exchange (BSE) was formed by the brokers in Bombay.BSE was Asias oldest stock exchange. In 1894 Ahmadabad stock exchange was started to deal in the shares of textile miles there the Calcutta stock exchange was started in 1908 to deal in shares of plantation and jute miles besides these there were a number of unorganized and unrecognized exchanges known as KERB markets. There were also illegal DABBA markets in which stock and shares also bought and sold SEBI: The functioning of stock exchanges in India has shown many weaknesses, lack of transparency. to counter these problems and regulate capital market the government of India set up the SECURITIES AND EXCHANGE BOARD OF INDIA in 1988.SEBI was a non statutory body but in January 1992 it was made a statutory body. SEBI , in consultation with govt. of India has taken a lot of steps to introduce improved practices and greater transparency for the interest of the investing public and healthy development of capital markets SEBI has advised stock exchanges to amend the listing agreements to ensure the listed companies furnishes annual statements to the stock exchanges All the guidelines and regulatory measures of capital issues are meant to promote healthy and efficient functioning of the issue market In January 1995 the government amended SEBI ACT 1992, so as to arm SEBI with additional powers for ensuring the orderly development of capital market and to enhance its ability to protect the interest of investors. It was thought that SEBI has all necessary powers to control the capital market on one hand and effectively protect interest of the shareholders on the other. But it has failed miserably to prevent a small by scams like HARSHAD MEHTA scam. Capital Market of USA: USA has a very strong and developed capital market. Many other countries such as Germany have a very powerful and firm banking sector but the capital market of Germany is not so strong. There is a very agile financial market that is present in USA and is playing very important part in making and implementing the policies of the government. If agile market in financial instrument were not present, the govt. will not be able to open market operations. The capital market covers a big range of tools for borrowing and lending. The borrowers are businesses houses, retail investors, and government Institutes which have needs for funding. Lenders are businesses and Individuals with savings or excess money to invest. Financial institutions viz. commercial banks, investment Firms, and insurance companies, act as both borrowers and lenders. In addition, a wide variety of financial instruments have been developed that permit borrowers to sell their own securities and their own securities and ear n interest and profits. The market in which the maturities and trading are for a short period is called a money market; the money market is a market for short-term credit. The money market helps the players to deal with routine financial uncertainties. Borrowers trade it for mollify or Short-term cash. Markets that deal in instruments with maturities more than one year are known as capital markets, since credit for investments for new venture will be required for more than one year. There is a difference between primary and secondary market. The primary market applies to the original issuing of a credit market instrument. After a debt instrument has been issued, the purchaser may be able to resell the instrument before its maturity in a secondary market. These include different types of formal exchanges, and electronic trading through bids and offers. NEW YORK STOCK EXCHANGE: The New York stock exchange is the largest stock exchange in the world. It is operated by NYSE Euro next (it is the company that is formed by all the companies listed in the NYSE that came into existence in April 2007).the CEO of the company is Duncan L. Niederauer . Its origin started on may 1792, when 24 stock brokers signed the Buttonwood agreement. It was renamed NEWYORK STOCK AND EXCHANE BOARD on March 1817.The first president was Anthony Stockholm. Its composite index was created with a base value of 50 points and base year as 1965.after a gap of 38 years the base value was 5000 points and the base year was 2005. The list of stock exchanges of USA are given below: New York Stock Exchange NASDAQ Philadelphia Boston Stock Exchange National Stock Exchange American Stock Exchange Chicago Stock Exchange New York Board of Trade NYSE Arca U.S. Securities and Exchange Commission: It is an organization of USA government which regulates all the stock exchanges mentioned above. The primary responsibility of this commission is to enforce all the securities laws of investors and industries. It was created by SECURITIES EXCHANGE ACT; 1934.This act is also called FEDRAL SECURITIES ACT. The main motive of the commission is to increase public faith in the capital markets by disclosure of information about public securities offerings. This commission divided in several offices. They are: The Office of General Counsel The Office of the Chief Accountant The Office of Compliance, Inspections and Examinations The Office of International Affairs PESTEL ANALYSIS OF CAPITAL MARKET OF INDIA: POLITICAL: THE capital market of India is very vulnerable. India has been politically instable in the past but it is a little politically stable now-a-days.the political instability of the country has a very strong impact on the capital market. The share market of India changes as the political changes took place. The sensex goes up and down with any kind of small and big political news, like, if there is news that a particular political party has withdrawn its support from the ruling party, and then the capital market will go down with a bang. The capital market of India is too weak and is based on speculations. The political stability of the country is very important for the stability and growth of capital market in India. The political imbalance or balance of the country is the major factor in deciding the capital market of India. The political factors include: employment laws tax policy trade restrictions and tariffs political stability ECONOMICAL: THE economical measures taken by the government of India has a very strong relationship with the capital market. Whenever the annual budget is announced the capital market goes up and down with the economical policies of the government .If the policies are supportive to the companies then the capital market takes it positively and if there is any other policy that is not supportive and it is not welcomed then the capital market goes down. Like, in the case of allocation of 3-G spectrum, those companies that got the license for 3-G, they witnessed sharp growth in their share values so the economic policies play a major part in the growth and decline of the capital market and again if there is relaxation on any kind of taxes on items of automobile industry then the share of automobile sector goes up and virtually strengthen the capital market .The economical factors include: inflation rate economic growth exchange rates interest rates SOCIAL: India is a country of unity in diversity .India is socially rich but the capital market is not very attached with the social factors .Yes, there is some relation between the social factors with the capital market. If there is any big social factor then to some extent it affects the capital market but small social factors dont impact at all. Like, there was opposition of reliance fresh in many cities and many stores were closed. The share prices of the reliance fresh went down but the impact was on and individual firm there was not much impact on the capital market on a whole the social factors have not much of impact on the capital market in India. The social factors include: emphasis on safety career attitudes population growth rate age distribution health consciousness TECHNOLOGICAL: The technological factors have not that much effect on the capital market. India is technological backward country. Same as social factors, technological factor can have an effect on an individual form but it cannot have a big impact on a whole of capital market. The Bajaj got a patent on its dts-i technology, and launched it in its new bike but it does not effect on capital market. The technological change in India is always on a lower basis and it doesnt effect on country as a whole. The technological factors include: RD activity technology incentives rate of technological change automation Environmental factors: Initially The environmental factors dont play a vital role in the capital market. But the time has changed and people are more eco-friendly. This is really bothering them that if any firm or industry is environment friendly or not. An increasing number of people, investors, corporate executives are paying importance to these facts, the capital markets still see the environment as a liability. They belie that it is of no use for their strategy. The environmental performance is even under-valued by the markets. Legal factors: Legal factors play an important role in the development and sustain the capital market. Legal issues relating to any industry or firm decides the fate of the capital market. If the govt. of India or the parliament introduces a new law that can affect the running of the industry then the industry will be demotivated and this demotivation will lead to the demotivation of the investors and will result in the fall of capital market. Like after the Harshat Mehta scam, new rules and regulations were introduced like PAN card was made necessary for trading, if any investor was investing too much money in a small firm, then the investors were questioned,etc. These regulations were meant to maintain transparency in the capital market, but at that time, investment was discouraged. Legal factors are necessary for the improvement and stability of the capital market. PESTEL Analysis Of The capital market of USA: Political factors: The political state of USA is very stable as compared to the India and trading there is done not on speculations but on hard and proven facts. They dont invest on feelings as we Indian investors do. It is a well known fact that the political factors play an important role in the capital market, but in USA due to its strong democracy and almost 100% employment the capital market. The investors there dont mix emotions with their professions so even if there is some kind of political disturbance that doesnt show much impact on the capital market there. ECONOMICAL: The economical factors of any country are very important for the capital market of that country and USA is no exception. For example: the great depression of 1931.the USA stock market crash on October 29,1929.it is also known as BLACK TUESDAY. This crash led to hugh loss for investors and the capital market was on its knees. Thus the economical factors are a very important and unavoidable factor .it will be suicidal to overlook the various economical factors like inflation, GDP, income tax structure etc. SOCIAL: Social factors almost dont affect the capital market in the USA. Because, the country is very rigid in its social roots. They are very less emotionally attached to each other especially in terms of business. The investors are least bothered about the social issues that prevail in their surroundings. Their social system is of that kind that it is too difficult to disturb the capital market there. Their social pattern is very much developed. Factors like emphasis on safety, health consciousness, career attitudes, population growth rate, age distribution etc. doesnt affect them at all. Technological factors: USA is a technologically developed country and the companies spend lot of money on the R D of any product.they dont bother about the cost incurring on it.and the investors there are very active