Capital Structure Essay Example | Topics and Well Written Essays - 1500 words

Capital Structure - Essay Example 1963. 441-442). Many theorists didn't like their theorems but finally did find evidence in their applicability in many cases. Stiglitz (1969. pp784) however emphasized that the theorem was framed with some limitations in mind pertaining to existence & distribution of risk classes, competitiveness in the markets and clarity of effect of bankruptcy on the validity of the theorem. Stiglitz (1969. pp789) proved that under given risk classes the primary objective of firm management is to maximize firm value and hence they shall tend to choose the most appropriate capital structure that can achieve maximum value of the firm given certain implying factors that vary from firm to firm. But what could be such implying factors Let us focus on another empirical generalization established by Borch (1969. pp6-7) regarding conflict of interest in firm capital structure. If an organization has started with a capital and have achieved value addition over the capital, the shareholders will expect divi dend payments from the value addition. Payment of dividends to shareholders will conflict with the interest of creditors as the latter would like to continue with long term interest payments. Hence, the creditors will tend to establish certain terms of agreement that indirectly impacts the dividend policy of the management thus affecting the capital structure of the organization as non-payment of dividends may end up reducing shareholder interest and hence can reduce equity financing. Another factor that affects the Capital Structure is the rate regulation by regulatory commissions. Spiegal and Spulber (1994. pp424-425) proved that rate regulations generates an incentive for the regulated firms to increase their debt levels. Thus regulated firms tend to have high leverages than unregulated firms. Chaganti & Damanpour (1991. pp488-490) and Brav (2009. pp265) argued that the firm's ownership determines capital structure to a large extent. Institutional investors or managers tend to reduce debt to equity ratio whereas shareholders that are "sensitive" to changes in performance tend to increase debt to equity ratio. This may be described using agency theory that the owners willing to take higher risks to maximize shareholder value will tend to reduce leverage while the owners willing to take lesser risks to maximize shareholder value will tend to increase leverage. Balakrishnan and Fox (1993. pp7-8) related firm Capital structure with asset specificity in which the investments are made. They argued that the firm's leverage would be positively related to investments in tangible assets or redeployment of existing assets but would be negatively related to investments in intangible assets. For example, a firm investing heavily in R&D will be more inclined towards equity finance because the outcome of R&D is normally intangible assets that do not form promising collaterals for debt

The History in behind Dolly Parton Essay Example | Topics and Well Written Essays - 1750 words

The History in behind Dolly Parton - Essay Example The name of the song was, "Puppy Love" which many people from the south are sure to be able to remember (Morning Edition 2002). When Dolly graduated from High-School she wanted to further her developing singing career so she packed up and moved to the big city of Nashville. She hit big with 'Porter Wagon' and for seven years on his show she built up her career rather fluidly. She finally decided to leave the program but before doing so she received two Country Music Association Awards for duo of the year (Pigeon-Forge 2006). From there her career has grown to vast proportions and is still growing in her other endeavors which includes two books that she has put together, and she even plans on having more published. However the two that have been out for quite some time are, "Dolly Parton: My Life", and "Other Unfinished Business" (Pigeon Forge 2006). On top of her more famous works, she also is very affluent in the business world, having developed many attractions in her hometown. Als o, every year there is a parade in Pigeon Forge which Dolly is a part of, this year will mark the 6th year of that parade. It is perceived that she enjoys it just as much as her fans enjoy coming out to stand in the crowd and wave as her float goes by. The parade itself draws 50,000 people that line the sides of the streets just to have a chance to see the famous country singer. There are numerous floats that are incorporated in with Dolly's but she is the main part of the annual parade every year. There are quite often times every year where Dolly's float stops in the streets while she sings one of her more famous songs that are hits with the crowd. This year she will be turning 60 years old and still going strong with her many personal projects, as well as her music, and business plans. Furthermore, Dolly has been a part of many fundraisers in her life thus far and has made many contributions to society as a whole. In fact, among these, she has developed one of the most famously k nown theme parks in the south known now as "Dollywood" which lies in the heart of Sevierville, Tennessee (Sevierville 2000). Dolly wanted to contribute something back to her home of the Great Smoky Mountains, but not only this she wanted to try and develop more employment opportunities for the people who live there. By opening her theme park in 1986 she has indeed provided extra employment and essential income for many of the families in the area as it has become the #1 State attraction in Tennessee, drawing over 2 million vacationers every year (The Songwriters Hall of Fame 2002-2006). Because of her presence and renowned history in the town of Sevierville, the city of Pigeon Forge has become one of the hottest points for well known country star singers, bringing thousands of visitors with every year that passes. Dolly Parton's career has been ongoing for over four decades now and she has been introduced into the country hall of fame as well. There was a point in time however well she felt her appearance might have held her back from several opportunities but by how much she has never said for a certainty. Her comment about how she felt about herself when she was in her much younger form is included in the following paragraph. I had this piled up mop of bleached blonde hair, and