Corporate finance Essay Example | Topics and Well Written Essays - 4500 words

Corporate finance - Essay Example In tradeoff theory, the search is for an optimum capital structure. The tradeoff is between the interest tax shield, bankruptcy costs and agency costs. The firm would seek the optimum debt ratio that maximises the value of the firm. It therefore balances the marginal present values of interest tax shields against bankruptcy costs and agency costs. The theory therefore predicts the mean reversion of the actual debt ratio towards a target or optimum and also predicts a cross-sectional relation between average debt-ratios and asset risk, profitability, tax status and asset type. In pecking order theory, there is no optimal debt ratio. Due to asymmetric information and signaling problems associated with issuing equity, financing policies follow a hierarchy, with preference for internal over external financing and for debt over equity. The debt ratio is therefore a cumulative result of hierarchical financing over time. 2. Managers are prohibited from trading in the shares of the firm. This prevents them from going against the interests of the firm, example short-selling the shares before announcing bad news about the firm even though the firm is doing well. 3. 3. Investors use the face value of debt held by the company to tell whether the firm is successful (type A) or unsuccessful (type B). 4. By changing the capital structure, the firm alters the perceived market value of the firm even if the true value of the firm remains the same. 1 period interest rate r t = 0 t=1 V0 V1 Market perception Truth is revealed Manager's compensation, M, paid out at the end of the period t=1: V1 if V1 D M = (1 + r)0V0 + 1 V1 - C if V1 0, 1: positive weights of the value of the firm r: one period interest rate V0, V1: value of the firm at t=0 and t=1 VA: value of successful type firm at t = 1 VB:

Review of a Christian-themed film Essay Example | Topics and Well Written Essays - 1500 words

Review of a Christian-themed film - Essay Example Amenabar managed to represent the very essence of that terrible era, which we consider the golden age of patristic. His scenes and characters are relevant and at the same time they are clearly correlated with the era, and their historically obvious naivety for us is blown with romantic languishing. The action takes place In Alexandria, Egypt, in the end of IV-V century, when paganism was retreating under the pressure of young and uncompromising Christianity. IV century is the century of triumph of Christianity in the Roman Empire. During this century Christians have moved from defense to attack, and from the oppressed religious minority they became a powerful government agency which was imposing its will to the rulers of destroying empire. In 391 in Alexandria religious clashes began, during which was destroyed the Library of Alexandria - one of the richest libraries in the world at that time. A former slave of Hypatia Davus who was secretly in love with her, becomes a Christian too and joined the rioters. Over time, the Christian church is becoming more powerful, and soon Bishop Cyril of Alexandria demanded Orestes and others to renounced Hypatia and forbid her to teach and do science. Hypatia was not able to deal with it and accept Christianity, so she was declared to be a witch, a prostitute and soon was killed. Hypatia is the embodiment of the ideas of modernity, science, secularism and feminism. We can say that she is the progress of the fifth century. But, as is in case with any genius, or with the person, going one step ahead of his time, her history is full of obstacles and difficulties. And the problem here is not only that the filmmakers made Hypatia an incarnation of the virtues, but also (what is more important) because they were trying to oppose the viewer to the heroine, in every respect alien or "otherness" towards us. We have to see her as a woman of her own time. Hypatia, the