Finance Term Paper Example | Topics and Well Written Essays - 1250 words

Finance - Term Paper Example The equity finance is an expensive and exclusive method for raising capital in the business and it comprises of ordinary and preference shareholdings, bonds and floating market shares. It also includes a listing cost and legal paper work, potential shareholders and raises wider opportunity for pool of finance (Slee, 2011). The difference in usage of appropriate financial capital structure is the selection of Leverage the business can be adhered to. It signifies the impact of debt in the company’s capital structure e.g. long-term bonds for 5 to 8 years and their impact on company’s profitability and earning stream (Khan et al., 2005). If the debt ratio is higher in good economic terms than it will also improve the required rate of return and return on equity of the business, similarly, if the debt ratio is higher in terms of recession than it creates a significance risk to the business operations and its sustainable future (Slee, 2011). According to the conventional theory of Modigliani and Miller (1985), in a perfect world the mix of debt and equity does not matter when economic terms and corporate taxes are assumed to be constant. It also suggested that value of the firm is independent of the financial capital structures and overall operating cost (Cox, 2011). It further argued that if the benefit is obtained due to low cost debt then it could be offset against the cost of equity borrowing that will be considerably higher than the debt finance. It also suggested that the cost of capital remains the same irrespective of the appropriate mix between debt and equity. It can be argued that value of the business and cost of capital will remain constant in a tax-free world e.g. United Arab Emirates (Slee, 2011). Debt financing is bind by obligations to pay interest and principal amounts and failure to meet the payment may result in serious risk to the business and in further case negative impact on the value of firm such as Bankruptcy (Khan et al., 2005). It can also be argued that as compared to the conventional theory if the business’s debt structure is higher than the equity portion, it might result in increased risk of higher interest payments and probable bankruptcy as well. It will also increase the cost of capital for the bondholders thus also indicating a highly geared business. It is suggested that to create an optimal mix of debt and equity structure, the margin level of gearing should be equal or does not outwei gh the probability of bankruptcy cost to the business (Ross et al., 2004). There are various debts to equity and debt ratio for industries and their risk level incorporating their business. The volatile industries like steel, cement, energy might adhere to higher debt ratio as compared

The Open Boat Essay Example | Topics and Well Written Essays - 1250 words

The Open Boat - Essay Example This is quite contradictory to the notion that human beings hold an importance in this Universe and humanity was created with some purpose. It might compel one to think if the Universe and its activities would come to a halt if a human being dies. This piece of literature shows how the nature and her elements move in their self-determined ways despite the fate of the four sailors who struggle against uncertainties of their fate through mutual support. The opening scene of the story introduces us to four survivors of a shipwreck, the captain, the oiler who is called Billy, the correspondent (the author who underwent the similar experience was also a correspondent at that time) and the cook. The author gives a detail description of all the men. For instance the cook is obese and shabbily attired, bailing water from the boat and positive about their rescue, the oiler is physically strong and rows with a single oar along with the correspondent who is with another oar and apparently detac hed from the group. The captain on the other hand lies in an injured condition at the base of the boat. The opposition between human fate and nature is best reflected in the lines â€Å"The birds sat comfortably in groups, and they were envied by some in the dingey for the wrath of the sea was no more to them than it was to a covey of prairie chickens a thousand miles inland† (Crane). ... The normal activities of nature seemed hostile and aggressive to the men. In fact the author brings out the angry thoughts of the men as follows: â€Å"If I am going to be drowned--if I am going to be drowned--if I am going to be drowned, why, in the name of the seven mad gods who rule the sea, was I allowed to come thus far and contemplate sand and trees?...If this old ninny-woman, Fate, cannot do better than this, she should be deprived of the management of men's fortunes† (Crane). Human beings often show their desperation through expressions of anger against nature. Such conditions of men bring them to a point where they want to vent their wrath on religion and God by throwing bricks at the temples. The next reason of exasperation comes when the men find there are no temples. Though the men at first thinks their fates are guided by some form of Gods. One on hand they feel â€Å"childish and stupid† to show any kind of optimism, while on the other any â€Å"open sugg estion of hopelessness† is not a wise demeanor (Crane). Crane tries to point out that humanity is not in a glorious position but one amongst he other components of nature and just like the society pursues their everyday activities, even the Universe would be undisturbed at the absence of human race. This is presented in contrast with the concept of the 19th century suggesting that the ultimate form of creation is human being (D’Ammassa, 174). The sole ray of hope comes from their mutual dependence and obtaining support from one another at times of distress. Such situations compel men to understand what it is like to be in the midst of a harsh reality and makes them realize the importance of comradeship. The men constantly get into fights, which