Plato and Solomon Essay Example | Topics and Well Written Essays - 1500 words

Plato and Solomon - Essay Example In contrast, Solomon is of the view that that love is rather a convergence of various desires i.e. sexual, ethical or other practical emotions which makes love a matter of rational choice based on human`s subjective understanding of phenomena. Thus, it is clear that on one hand where Plato treats love as a philosophical entity, on the other hand Solomon takes love as reciprocity of emotions based on one`s past experiences. To further elaborate, it is crucial to discuss in detail separately how Plato and Solomon perceived the concept of love. In one of his speeches, Plato clearly reinstated the idea that seeking love is parallel to seeking wisdom. In other words, there is no wisdom in suppressing one`s sexual desires or other similar emotions, rather wisdom lies in training and refining these desires to acquire higher levels of wisdom (Plato 84-85). One of the speeches where Plato presented his idea of love was at a symposium which was central to the social life of Athens, during a discussion on the concept of love. During the speech, the central argument of Plato was to prove that love surrounds the concept of philosophy always, and can`t be understood otherwise. More so, he treats philosophy as the highest of the expressions that love may acquire and further prompts that this philosophy drives us in our everyday affairs (Santas 33). This could further be augmented by the fact that humans develop a se nse of attraction and appeal to beautiful people or aesthetic music as a direct appeal for ‘beauty’ and philosophy is what directs one to desire what is considered to be beautiful. This concept can be related to Aristophanian view of love, alongside Socratian analysis of the conception of love. Aristophanes understands love as one of the forms of some myth. He presents his myth as the genesis of human race, where they had four legs and four arms, also two heads where a few were males and other were females, and yet a few hermaphrodites. Thus, we were

Discussion post Essay Example | Topics and Well Written Essays - 250 words

Discussion post - Essay Example His criticisms of how Roosevelt was handling this depression and his constant fight for the minority to be given fair wages made him more popular then FDR. This was even included in his principles for the National Union for Social Justice which stated that â€Å"I believe that every citizen willing to work and capable of working shall receive a just, living, annual wage which will enable him both to maintain and educate his family according to the standards of American decency.† All in all, the greatest threat from Coughlin to Roosevelt was because he was a priest and hence majority of the people believed and trusted his doctrines, criticisms and ideologies more than they did that of President Roosevelt. Coughlin was constantly attacking and questioning the faith of Roosevelt through his weekly radio speeches and hence inflicted doubt on the American citizens about their President. This proved to be a major political bow and setback for the

The Criminal Justice System Essay Example | Topics and Well Written Essays - 1000 words

The Criminal Justice System - Essay Example Two main models that are used to determine which acts are crimes by society are the consensus model and the conflict model (Farmer 2008). According to the former, criminal behaviour is any act that is in conflict with the beliefs and values of the whole society. This model holds the assumption that as diverse as people and communities are, they can have similar morals. On its part, the conflict model holds that criminal law is determined by those people who hold social, political, and economic power within a given community. One of the theories that apply to crime is the rational choice theory. Also called the decision theory, this theory suggests that humans commit crimes because they serve the interests of the actors or rather bring more benefit as opposed to harm to them. This theory is based on the assumption that the criminal commits crime because they experience a constraint in choice. In this respect, the theory argues that to deter crime effectively, the cost of crime should be set so high that every reasonable person will shun it. The Government Structure As It Applies To the Criminal Justice System The criminal justice system comprises a collection of local, state and federal (public) agencies that are dedicated to dealing with crime (Randolph, 2005). In many cases, the decision of one agency affects the decisions of other agencies in matters related to crime.

Finance Essay Example for Free

Finance Essay These policies are characterized by a combination of risk and return, and can have from a conservative to an aggressive profile. The three types of working capital policies most recommended and used are: Aggressive Policy, Average Policy, and Conservative Policy. The aggressive policy working capital management focuses on maintaining current assets amounts at minimum levels, which is reflected in the total asset turnover higher, with a higher margin. This policy emphasizes the aspect of returns on risk-return decision. This policy is the highest risk policy but with more funds to reinvest in the company or usiness. According to Kulkarni (2011) â€Å" it is a high risk arrangement though, because, should your creditor come asking for money, and for some reason, you dont have enough money to pay them off, you might end up having to sell a costly asset to pay off your debt to them. † (Kulkarni, A. 2011 , Working Capital Policy, 9). The matching policy working capital management leaves a person with cash available to reinvest in his company or business. This policy entails a medium level risk and with this policy the business assets matched business liabilities. According to Kulkarni (2011) â€Å"this policy works in an arrangement where the current assets of the business are used perfect to match the current liabilities. It is a medium risk proposition and requires a good amount of attention. † (Kulkarni, A. 2011 , Working Capital Policy, 6). A conservative policy working capital management focuses on maintaining a high liquidity, as well as other accounts assets, as inventories and accounts receivable, which is very expensive, because they remain idle resources that eventually become unproductive, with slow rotation of assets due to the large investment in current assets. This policy emphasizes the minimization of risk, as opposed to maximizing yields that is not risk to be sure liquidity. A conservative policy may be best for people who want to keep low risks. According to Kulkarni (2011) â€Å"This is the policy with the lowest risk, but it reduces the money used in increasing the production† (Kulkarni, A. 2011 , Working Capital Policy, 11). Recommended Policy The working capital policy recommended for Lawrence Sports is the matching policy, more commonly referred to as the moderate approach. The working capital is funded by short and long term borrowing, equity financing or a combination of them. It is vital for the company to balance the risk and return of financing. The moderate approach falls in between the two other polices described above and is the most balanced. This enables Lawrence Sports to balance its risk and returns. Furthermore, it finances short term debt with temporary assets while permanent and fixed assets are financed by long term debt and equity sources (Zeepedia, n. d. ). A moderate approach gives Lawrence Sports the ability to maintain the relationships necessary to continue business, balance the working capital to still create a profit, and repay what is owed to the bank. Figure 1. Different Policies Regarding the Level of Investment in Working Capital demonstrates how the Moderate Approach compares with the others in terms of the level of investment in working capital (Watson ;amp; Head, 2012, p. 72). Risk It is important for a company to choose the best working capital policy, one that features a level of risk the company can handle. Team C decisions about working capital management are being driven by the intrinsically related priority of risk management. Team C’s aim is to minimize the risk of insolvency while maximizing the return on the assists (Dixon, 1991). Teams C choose the matching working capital policy because it entails a medium level of risk and it will also leave Lawrence Sports with more cash to reinvest in the business. Lawrence Sports will keep low levels of working capital so that they can employ the funds more productively elsewhere like purchasing more goods or more machinery. It is a relatively amount of risk balanced by a relatively moderate amount of expected return. The best level of working capital would be the one in which a balance is achieved between risk and efficiency which also requires continuous monitoring to maintain proper level in various components of working capital, i. e. , cash receivables, inventory and payables, etc. Contingencies A contingency is an unexpected event or situation that affects the financial health, professional image, or market share of a company. It is usually a negative event, but can also be an unexpected windfall such as a huge order. Anything that unexpectedly disrupts a companys expected operation can harm the company even if the disruption is because of a windfall (Duff, 2013). In the case of Lawrence Sports there should be a contingency plan in place in the event product is damaged or lost either in transit or by some unforeseen event. Another contingency plan Lawrence Sports should consider is a cash reserve to cover accounts receivable loses if Mayo defaults on invoice credits. In this case vendor defaults affect bottom line but in turn Lawrence would not have to borrow money from Gartner and avoid high interest rates. For Lawrence to recover from such an incident Lawrence Sports needs to use its working capital to cover the costs so that funds are not continuously incurred on the bank loan. In order for Lawrence Sports to raise the capital to cover a contingency plan Mayo would have to relinquish all sales to Lawrence Sports, payments to Gartner will have to be stretched out further and Murray would lose working capital and halt operations because Lawrence Sports payments would be differed even longer. These hefty decisions are all apart of risk management and can negatively affect business relations.

Defining Family in a Law Context

Defining Family in a Law Context 1. Introduction The term family is a fluid concept[1], used to describe different forms of expressions regarding the intimacy shared in private life based on care and interdependence. It comprises of diverse relationships, including homosexual or heterosexual couple with or without children, cohabiting with or without legal formality.[2] Therefore, if the family is the core social environment in society, then family law is any form of governing and supporting those close emotional relationships between adults, children and the state.[3] However, it is difficult to define the family law due to changes in social norms and standards. There is also a wide range of laws, such as immigration law and employment law[4], that may have significant influence on family life, therefore family law usually is considered as an ambiguous and incoherent subject.[5] To explore the question of what family law is, this paper will seek to address two main issues. First, to discuss the ways to define the concept of family within the law. Second, to evaluate what family law is from several different theoretical approaches. 2. Changing ideas of family in law The traditional concept of family in law takes the idea of the nuclear family, which comprises of a married heterosexual couple with children.[6] Apart from the context of marriage, it was considered an abuse of the English language to include other relationships.[7] According to the statistics provided by the Office for National Statistics (ONS)[8], the number of the nuclear family has decreased 500 thousand compared to the data from 2000 to 2015 while the cohabiting couple family has become the fastest growing family type reaching 3.2 million in the past decade. Meanwhile, the most common family type changes from the idealised family into the form of the married couple or civil partner couple without any children.[9] This situation pushes the law to respond to this gap[10] by shifting from the traditional nuclear family into the idea of New Families.[11] The concept of New Families[12] begins with the recognition of unmarried couples regardless of children, but still requires an appropriate degree of apparent permanence and stability.[13] Same sex relationships has recently been accepted as a family in Fitzpatrick v Sterling Housing Association,[14] where longstanding, close, loving and faithful, monogamous homosexual relationshipsà ¢Ã¢â€š ¬Ã‚ ¦is deemed to make someone a member of a family.[15] Lady Hale also highlights that widening the scope of the family, regardless of the sex, could recognise the importance the principles of dignity, humanity and equality.[16] Therefore, the law does not limit the definition of family life and accepts the different forms of family as long as they can establish the degree of intimacy and stability and sharing of lives. However, the law has categorised an exclusion, friendship has been refused as the relationship of the family due to lack of degree of intimacy and stability.[17] Arguably, Diduck argues that there are blurring lines between family and friends in contemporary society, as friends become lovers and lovers become friends [18]. 3. What is Family Law? This section examines how the family law works in relations to the family. The functions have been briefly divided into four main categories: protection, regulation, radiating message and promotion of equality, and further use several theoretical approaches respectively for evaluation. i. Protection and Support A Good parent in a family is usually considered as a person who provides physical, emotional and financial support for their children. They also protect the children and family members from harm.[19] In terms of the functionalist approach, family law has a series of goals to be fulfilled.[20] Eekelaar has suggested that the main objectives of family law are the enforcers of protection and support to the family.[21] As an example, the most common situation encountered by law is domestic violence. According to the research by the ONS, there are over 78% of incidents of the domestic abuse involved violence.[22] The introduction of Family Law Act 1996 is one of legislation for allowing the victims to obtain the help for protection. It attempts to bring consistency to the civil remedies and emphasises the protection of the human rights for safeguarding victims from domestic violence.[23] The application of this law yielded positive results, as the data provided by the ONS showed the numbe rs of domestic violence have generally decreased by 0.7 million over the past decade.[24] However, difficulty arises when it is assumed that the law is the only factor to influence the family. [25] By using the above example, the law influence may not be the sole reason for the reduction of domestic violence, thus there are other possible factors to improve the domestic violence situation, such as government support and educational policy.[26] The uncertainty of family law further arguably undermines this approach where it is difficult to simplify the laws into one single goal. In the case of the 1996 Act on divorce claims that it is pursuing both contrary goals, including, to encourage marriage and to make it possible to break down the marriage with as little bitterness as possible, therefore, it cannot precisely assess the effectiveness of family law. ii. Regulation and Adjustment of family life The relationship between law and family has been described as the protector of private life.[27] However, the traditional division of public and private sphere have given rises to debates of whether it is appropriate to regulate the private life by the law. The opinion of traditional liberal position suggests that it is improper for the state to regulate and intervene on private affairs.[28] For example, if the law illegalises adultery, it might violate the privacy of family life. It also seems impossible and difficult for the law enforcers to control all private properties for the adultery issue. Respecting private life upholds the principle of autonomy. The traditional liberal position respects individuals decisions about how they wish to develop their own beliefs and personality on the family issue.[29] Arguably, the promotion of autonomy principle does not necessarily mean that the law should be entirely cast out of the private sphere. Some undesirable [30]forms of family life, such as child abuse, might require and deserve the intervention to regulate and adjust to the private family life. For example, there has been an increase of criminal law used against parents whose children misbehave. Therefore, it is not a clear picture to distinguish one of intervention or deregulation. Although the law is difficult to have clear-cut for public and private intervention to family life, it seems to endorse the shift to privatisation. The law attempts to regulate the private life less and less.[31] The law encourages divorcing couples to use mediation for the family and financial dispute resolution, rather than settling it through court. The current Government also gives the clear direction about the role of the court that the law should focus on protecting the vulnerable from abuse, victimisation and exploitation and should avoid intervening in family life except where there is clear benefit to children or vulnerable adults in doing so.[32] In other words, the law can focus on the regulation and adjustment of the family in crisis. [33] iii. Sending Message to the Public With collaboration with the family regulation policy, the Law Commission recognises the ability of family law was to send the message to the public about the desirable behaviour of good family living.[34] Law upholds the traditional values of nuclear families with unrestrictive form, underlining those qualities as an ideal family model. Therefore, the law encourages the former partners of the divorced family and lone parent families to go on to make a new family[35], rather than focusing on the remedying the broken family. The government policy takes this approach to achieve good divorce, now defined as one that creates the separate-but-continuing family.[36] The message sent by the law can be reviewed through the usage of judicial language and style in the judgments.[37] Traditionally, the expression of paternalism or welfare highlight the breadwinner in a traditional patriarchal family was responsible for supporting continually his pre-separation marital obligation after the breaking-down of marriage.[38] In the 1990s, the judgment starts to shift to the language of equality or rights, which supports and assumes a diverse and democratic form of family. The breadwinner became obliged to share what became re-conceived as the fruit of the marital partnership. [39] The language radiates the message that the law shifts to emphasise the principle of non-discrimination, mutuality, right or entitlement and equality. iv. Promotion of Equality Family law positively promotes the principle of equality and non-discrimination. The widening scope of what is a family, by allowing diverse relationships is a significant indication of justice, equality and inclusivity.[40] The enforcements of Civil Partnership Act 2004 and Marriage (Same Sex Couples) Act 2013 grant most of the rights and responsibilities of marriage to the registered same-sex couples to enjoy the equal right and status for family life[41] as the heterosexual marriage couples. [42] Arguably, there are still some limits on equality and discrimination. On 21st February 2017, the Court of Appeal rejected heterosexual couples entering into civil partnerships.[43] The judgment fails to allow the couples to seek fairness and equality and to eliminate discrimination between heterosexual and homosexual couples. The judgment has further potentially violated the human rights under Article 14 taken with Article 8 of the European Convention on Human Rights (ECHR)[44]. The couples might not make their personal family choices. Hence, Lord Arden further urged the need to change the law by the Parliament. To further argue regarding inequality within the law. Historically, the law has discriminated against women in divorce where the husbands are able to divorce their wives on the basis of adultery. However, the wives are only able to divorce their husbands based on the grounds of the incestuous adultery.[45] Therefore, the law seeks to emphasise the concept of equality before the law that both men and women are on equal footing [46]and to avoid men abusing their gender to obtain an unfair advantage. The law also ensures everyone in society could equally access safety and justice through the law. In terms of domestic violence, the evidence provided by the Rights of Women, mentions that there are up to 40% of women who could not satisfy the restrictive requirements of Legal Aid.[47] On 23rd Feb 2017, the removal of the five-year limit and the admission of fresh categories of evidence aims to help large numbers of women and also men, who were previously been deprived of legal advice and representation, can obtain legal aid for family disputes.[48] Estelle du Boulay, Director of Rights of Women commented that this renew commitment is both victory for women and also for common sense.[49] The law is lowering the thresholds for more people to seek the justice through law. However, feminist perspectives argue that there is still a loophole between gender equalities. They criticise the disadvantages from the assumption of the traditional gender role in society: the father is the active breadwinner whilst the mother is the traditional day to day carer. [50] Yet, SRJ v DWJ [51] invokes the entitlement of monetary value for the contribution of the wife that she gave up her work as a teacher to concentrate on her family. The court attempts to redress the gender imbalance that exists in the traditional family-based discourses. Therefore, the parties respective responsibilities to each other base on the discourse of rights, compensation, mutuality, and gender equality.[52] 4. Conclusion Family law is a special law due to the wide scope of families and wide ranges of issues it deals with throughout its historical and contemporary period. This paper has examined family law from four different categories: Functional, adjustive, radiating message and equality. Although these four categories might not cover all issues, it briefly summarises the main principles of family law and further evaluates its effectiveness regarding on concerned issues. References Bowcott O, Court Rules Against Heterosexual Couple Who Wanted Civil Partnership The Guardian (2017) accessed 7 March 2017 Bowcott O, Legal Aid Shakeup Hands Lifeline To Domestic Violence Victims The Guardian (2017) accessed 26 February 2017 Dewar J, The Normal Chaos Of Family Law (1998) 61 Modern Law Review Diduck A and Kaganas F, Family Law, Gender And The State: Text, Cases And Materials (3rd edn, Oxford: Hart 2012) Diduck A, Shifting Familiarity (2005) 58 Current Legal Problems Diduck A, What Is Family Law For? (2011) 64 Current Legal Problems Eekelaar J, Family Law And Social Policy (2nd edn, Weidenfield and Nicholson 1984) Dyson Holding Ltd v Fox [1976] QB 513 European Convention on Humans Right, Art 8 and 14 Families And Households- Office For National Statistics (Ons.gov.uk, 2017) accessed 24 February 2017 Family Law Ground For Divorce (1990) accessed 26 February 2017 Fitzpatrick v Sterling Housing Association [2001] 1 AC 27 Harris-Short S and Miles J, Family Law: Text, Cases And Material (2nd edn, Oxford 2011) Herring J, Family Law (7th edn, Longman 2015) Human Rights Act 1998, Art 8 Gamman v Ekins [1950] 2 KB 328, 331 Mendoza v Ghaiden [2004] UKHL 30 Minow M, All In The Family In All Families: Membership, Loving, And Owing (1993) 95 WVLR Norgrove D, Family Justice Review Final Report (2012) accessed 12 March 2017 Re G (Education: Religious Upbringing) [2012] EWCA Rights of Women, Evidencing Domestic Violence: Nearly 3 Years On (2015) accessed 26 February 2017 Shannon G, Family Law (1st edn, Oxford University Press 2011) Smart C, Stories Of Family Life: Cohabitation, Marriage And Social Change (1st edn, 2000) SRJ v DWJ [1999] FCR 153 CA Starting In School To End Domestic Violence (Refuge For Women and Children Against domestic violence, 2017) accessed 7 March 2017 The Guardian, Marriage Has Changed Throughout Its History. Making It Equal Changes It For The Better (2015) The Matrimonial Causes Act 1957 c85 Travis A, Domestic Abuse Accounts For One In 10 Recorded Crimes ONS The Guardian (2016) Woodhouse J and Dempsey N, Domestic Violence In England And Wales (House of Commons Library 2016) [1] Carol Smart, Stories of Family Life: Cohabitation, Marriage and Social Change (2000) 17 CJFL 20 [2] Alison Diduck, What Is Family Law For? (2011) 64 Current Legal Problems 289 [3] Jonathan Herring, Family Law (7th edn, Longman, Essex 2015) 16-17 [4] ibid. [5] John Dewar, The Normal Chaos Of Family Law (1998) 61 Modern Law Review 467 [6] Herring (n 3) 4 [7] Gamman v Ekins [1950] 2 KB 328, 331 [8] Families And Households- Office For National Statistics (Ons.gov.uk, 2015) accessed 24 February 2017. [9] ibid. [10] Alison Diduck and Felicity Kaganas, Family Law, Gender And The State: Text, Cases And Materials (2nd edn, Hart publishing 2017), p.9 [11] Herring (n 3) 7-12 [12] ibid. [13] Dyson Holdings Ltd v Fox [1976] QB 513 [14] Fitzpatrick v Sterling Housing Association [2001] 1 AC 27 [15] ibid 32. [16] Mendoza v Ghaiden [2004] UKHL 30 [17] Martha Minow, All in the Family in All Families: Membership, Loving, and Owing [1992-1993] 95 WVLR 319 [18] Alison Diduck, Shifting Familiarity (2005) 58 Current Legal Problems 250 [19] Geoffrey Shannon, Family Law (1st edn, Oxford University Press 2011). [20] Herring (n 3) 17 [21] John Eekelaar, Family law and social policy (2nd edn, Weidenfield and Nicholson, London 1984) 24-26 [22] Alan Travis, Domestic Abuse Accounts For One In 10 Recorded Crimes ONS The Guardian (2016). [23] Herring (n 3) 299 [24] John Woodhouse and Noel Dempsey, Domestic Violence In England And Wales (House of Commons Library 2016) 5 [25] Herring (n 3) 17 [26] Refuge For Women and Children Against domestic violence, Starting In School To End Domestic Violence accessed 7 March 2017. [27] Herring (n 3) 21 [28] ibid. [29] Herring (n 3) 22 [30] Sonia Harris-Short and Joanna Miles, Family Law: Text, Cases And Material (2nd edn, Oxford 2011) 12 [31] Herring (n 3) 24 [32] David Norgrove, Family Justice Review Final Report (The Ministry of Justice, the Department for Education and the Welsh Government 2012) accessed 12 March 2017. [33] Harris-Short and Miles (n18) 12 [34] Law Commission Report No.192, Family Law Ground For Divorce (1990) accessed 26 February 2017. [35] Diduck (n 17) 238 [36] ibid. [37] Diduck (n 2) 292 [38] ibid. [39] Diduck (n 2) 293 [40] Diduck (n 22) 239 [41] Article 8 of Human Rights Act 1998, Right to respect for private and family life [42] The Guardian, Marriage Has Changed Throughout Its History. Making It Equal Changes It For The Better (2015). [43] Owen Bowcott, Court Rules Against Heterosexual Couple Who Wanted Civil Partnership (the Guardian, 2017) accessed 7 March 2017. [44] Article 14 of ECHR, Prohibition of discrimination Art 8 of ECHR, Right to respect for private and family life, [45] The Matrimonial Causes Act 1857 c.85, XXVII, On Adultery of Wife or Incest, and of Husband, Petition for Dissolution of Marriage may be presented. [46] Munby LJ, Re G (Education: Religious Upbringing) [2012] EWCA, para 24 [47] Rights of Women, Evidencing Domestic Violence: Nearly 3 Years On (2015) accessed 26 February 2017. [48] Owen Bowcott, Legal Aid Shakeup Hands Lifeline To Domestic Violence Victims (the Guardian, 2017) accessed 26 February 2017. [49] ibid. [50] Minow (n 17) 313 [51] SRJ v DWJ [1999] 3 FCR 153 CA [52] Diduck (n 2) 297

The Power of Computers and Technology :: Exploratory Essays Research Papers

The Power of Computers While I was sitting at my PC, I began looking for a song to download. All of the sudden, the screen went blank. I knew that I hadn't touched the power strip, so I was dumbfounded by its sudden halt. I used every key possible to try and revive my dying machine. I frantically decided to turn the power off, but, before I could, a small green cursor blinked on the screen. I tried to type but nothing worked. Not knowing what to do, I switched the power to off and was amazed that the blinking green cursor was still alive. It was a normal boring day. I had returned home from work and decided to fool around on my computer. The computer lived in my room; it had its own space and a small lamp that provided light for typing. Although my computer was the most recent edition, it had once been infected with one of the many viruses. Because of this I decided to go on the net and sign up for a trial virus doctor, which is a program that helps to get rid of computer viruses. Being so disgusted with myself for obtaining the awful disease, I downloaded the program without reading any of the labels. I then proceeded to look for a new to download when all of a sudden the screen went blank. The emerald cursor skipped across the screen typing as it went. " Initializing data and preceding with extermination of hostile data." My mouth dropped to the floor as I sat there speechless. I then typed in " Stop program." The computer then replied, "Why do you want me to stop doing what you hired us to do?" "Us? Who do you mean by us?" "I mean the network of computers that you hired to fix your PC. It figures, all of you humans never do any research before jumping into things." " What are you talking about? I don't even know what's going on here." "See, that's exactly what I'm talking about. You just downloaded me a few minutes ago, and now you are mad because we're doing our job." " No! Wait one minute! I downloaded a virus doctor to fix my computer, not some psycho program so a kid could hack into my computer." " Wow you really don't know what's going on.

Share Capital

? SHARE CAPITAL Share capital is the Funds raised by issuing shares in return for cash or other considerations. The amount of share capital a company has can change over time because each time a business sells new shares to the public in exchange for cash, the amount of share capital will increase. Share capital can be composed of both common and preferred shares. Each share carrying a vote in the management of the business, managerial control may be limited. The authorized capital of a company is the maximum amount of share capital that the company is authorized by its constitutional documents to issue to shareholders.Issued Capital is the value of the shares issued to shareholders. This means the nominal value of the shares rather than their actual worth. The amount of issued capital cannot exceed the mount of the authorized capital. Types of Share Capital:- Redeemable Shares Ownership shares that the issuing business may repurchase. Some redeemable shares are mandatorily redeemabl e and must be repurchased by the issuer on a particular date or on the occurrence of a specified event, such as the death of an owner. Preference SharesPreference shares differ from ordinary shares in giving the holder preferential rights to receive a share of annual profits. An ordinary dividend cannot be paid unless all preference dividends due have been paid in full. Preference shares are also higher in the creditor hierarchy than ordinary shares, and have a preferential right to receive the proceeds of disposal of the assets in the event of a company going into liquidation. They are therefore less risky than ordinary shares, even though they are legally share capital as well. There are three further types of preference shares:-Participating preference shares Preference shares which, in addition to paying a specified dividend, entitle preference shareholders to participate in receiving an additional dividend if ordinary shareholders are paid a dividend above a stated amount. Conv ertible preference shares A preference share that can be converted into common shares at aset conversion price. A company may issue them to finance a major acquisitions without increasing the company’s gearing or diluting the EPS of the ordinary shares. Redeemable preference sharesA preference share which must be bought back by the company at an agreed date and for an agreed price Deferred Shares A share that does not have any rights to the assets of a company undergoing bankruptcy until all common and preferred shareholders are paid. Where it exits, it will rank behind all other shares for dividend. Non-voting Shares A share which equity that does not have a vote, even though it is entitled to a share of the profits. The term is not usually applied to preference shares, although preference share do not have votes, they receive a fixed dividend.Retained profit:- Retained profit is the profit kept in the company rather than paid out to shareholders as a dividend. Retained prof it is widely regarded as the most important long-term source of finance for a business. Dividend payable:- The amount of dividends which have been declared by a company’s board of directors and which are obligated to be paid to shareholders. If the dividend yield falls, then the share becomes less attractive compared to other investments, demand for it will fall, and supply will increase as investors wish to sell. Newspaper information on share:-Many of the broadsheet papers include a section showing security prices and related information including: the highest and lowest prices during the year; the closing price the previous day; the change in price over the previous trading day; dividends net of tax; dividend cover; gross yield; and the P/E ratio. Share categories:- Shares are categorized according to the company type and trading frequency: ? Alphas These are the shares of the most prestigious companies which are generally heavily traded and dealt in by a large number of m arket-makers. Prices are posted immediately on SEAQ ? BetasThese are also large company securities, but they are not as heavily traded as alphas. They must have at least four market-makers dealing in them and prices quoted on SEAQ are those at which firm deals can be made. ?Gamma These securities are traded lessfrequently than betas and the prices quoted for them are merely indicative. ?Deltas These are the least traded of all and no prices are actually shown, simply indications of a dealer's interest. Penny shares:- Penny shares are shares which have a very low value with the bid or offer spread of such shares exceeding 10% of their market value.Investors buy such shares in the hope that the market has undervalued their prospects and that they will make a substantial profit when the price recovers. Methods of issuing shares:- One way in which a firm can expand is to issue additional equity –usually on the main Stock Exchange or second-tier market, either by a quoted company issuing additional shares or by an unquoted company obtaining a quotation. An unquoted company may also wish to issue shares without being floated. Placing or Selective Marketing’s:-This method is often used for a company wishing to be floated for the first time and to issue a small issue, or by a quoted company wishing to raise additional finance. It involves securities' acquisition by a market-maker so that they can be purchased by a small number of investors. Offer For sale. This is where the company which is issuing the shares will offer the shares to an issuing house. Generally a merchant bank will act as an issuing house. The shares bought over by the issuing house will be re issued to the general public.Under this method the company which is issuing the shares can make use of the financial strength and the image of the issuing house to make. Normally the shares are offered at a fixed price determined by the company’s directors and their financial advisers. This is usually undertaken by the organization who is offering for the first time and a large issue. This is also known as public offer. The issue price should be low enough to be attractive to potential investors, but high enough to allow the required finance to be raised without the issue of more shares than necessary. PlacingThis is where the company which is carrying out the share issue will select large institutional investors and offer the shares by conducting â€Å"road shows†. A road show is where the company will conduct a presentation to educate the selected investors about the share issue. This will be a low cost method of issuing the shares. Some of the institutional investors who will be interested in the share issue will include pension funds, unit trusts, venture capital organizations, building societies. The shares are issued at a fixed price to a number of institutional investors who are approached by the broker before the issue takes place.Instead of engaging in advertising to the population at large, the sponsor or broker handling the issue sells the shares to its own private clients. The costs of this method are considerably lower than those of an offer for sale. There are lower publicity costs and legal costs. A drawback of this method is that the spread of shareholders isgoing to be more limited. Sale by tender This is where the company which is issuing the shares will call upon the investors to bid the price at which they are willing to buy the shares.Therefore each individual investor will indicate the quantity of shares they expect to buy and price they are willing to pay. The company should decide upon a price at which all the shares can be issued and collect the highest possible revenue. This price will be called the strike price. Investors who bid a price above this will be allocated shares at the strike price – not at the price of their bid. Those who bid below the strike price will not receive any shares. This method is u seful in situations where it is very ifficult to value a company, for instance, where there is no comparable company already listed or where the level of demand may be difficult to assess. It is more costly to administer and many investors will be put off by being handed the onerous task of estimating the share’s value. Short Term Finance:- Securitization:- The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors. The process can encompass any type of financial asset and promotes liquidity in the marketplaceRight issue The term right issue is applied to the system of issuing shares to existing shareholders usually at a discount from the market price in order to raise further capital from existing shareholders. The offer must be on a right basis in proportion to the members existing holding as a fraction of holdings of all members eligible to receive the offer. The rights of shareholders to buy the rights are known as pre-emptive rights. Calculation of issue price. This is the amount that company wishes to raise from the issue divided by the number of new shares.It is important to issue a sufficient number of shares so that the issue price is below current market price. Calculation of price after issue: ?Ex right price ?Actual price after issue †¢At current earnings †¢At lower earnings †¢At higher earnings Values of rights: The value is the difference between the price of the right shares and the ex-right shares. Other methods: ?Subscription offers: An offer for subscription is an invitation to the public by or on the behalf of an issuer to subscribe for securities not yet issued or allotted. ?Prospectus issue:If reasonably substantial the company might make an issue direct to the public with the absolute minimum of assistance from the outside source. It is rather unusual because of the complexity of the nature of the capital issue. ?Stock exchange introduction This is the introduction of the shares on the stock exchange so that a quotation can be fixed, rather than the issue of shares. ?Role of underwriters Under writers agree to purchase any securities not taken up at the issue price and will charge a fixed face for their service. Use of underwriters removes the risk of share issue being under subscribed. Open offers: This is an offer to existing shareholders to subscribe for securities. Whether or not pro rata to their existing shareholders. They are not allotted through the issue of renounceable documents. ?Vendor share scheme or placing: Where a vendor prefers cash to shares issued to finance an acquisition by a purchaser, an issuing house can place the securities with clients for cash. ?Exchanges and conversions: This is the process used to replace one security with another. E. g. ; a vendor consideration issue or paper issue used in a merger or takeover bid. Employee share schemes: Such e mployees are often used as incentives, e. g. ; share option schemes which give certain employees the chance to purchase shares in the company at a price determined in advance hopefully for a financial benefit. The firm should consider the following factors when pricing shares for a stock market quotation: †¢The current and future market conditions and the firm’s results. †¢P/E of similar quoted companies. †¢Whether the quotation is to be on the main market or the AIM. †¢An initial premium on launch, followed by steady growth in the share price is desirable. The amount of finance required. †¢Future dividends and earnings forecasts (the more shares the more dividends need to be paid out). †¢Underwriting costs or deep discount required to avoid under subscription of shares. Costs of share issues: The costs involved in share issues include †¢The stock exchange listing fee for the new securities. †¢Fees of advisors including those of the iss uing house. †¢Underwriting costs. †¢The compulsory advertising in national newspapers. †¢Printing and distribution costs of details and prospectus. Issuing new shares without raising capital: Scrip issues/ capitalization / bonus issue: It involves conversion of reserves into capital causing a fall in the reserves. Shareholders receive additional shares in proportion to their holding. The shareholders do not pay for the shares. This results in more equity in circulation with the result that the market value will generally fall in the short term. This making it more attractive to potential investors. ?Scrip dividends: It is a conversional of profit reserves into issued share capital offered to shareholders in lieu of cash dividend.Enhanced scrip dividends are those where the value of shares is greater than cash dividend offered as an alternative. ?Stock split; It is the splitting of existing shares into smaller shares, in order to improve the marketability of the compan y’s shares. Share repurchase: Repurchases or buy-ins of shares may be made by companies out of their distributable profits or out of the proceeds of a new issue of share made especially for the purpose; provided than are authorized to do so in the company’s articles of association.And off- market purchase is said to occur when the shares are purchased not subjected to the marketing arrangements of the stock exchange or other than on a recognized stock exchange. Advantages: †¢It may allow a company to prevent a takeover bid. The control by the existing shareholder group will be increased. †¢A quoted company may purchase its share in order to withdraw from the stock market. †¢It can be a useful way of using surplus cash. †¢Repurchasing shares will reduce the number in circulation which should allow an increase in earnings and dividends per share and should lead to a higher share price.It will increase future EPS as future profits will be earned by few er shares. †¢Reducing the level of equity will increase the gearing level for a company with debt which may be considered beneficial by the company. †¢If a business is in decline a share repurchase may give the firm’s equity a more appropriate level. Disadvantages: †¢Repurchasing of shares may be viewed as a failure by the company to manage the funds profitably for shareholders. †¢The company requires cash for the repurchase. †¢It may be difficult to fix a price which is beneficial to all involved. It requires existing shareholders approval. †¢Capital gains tax may be payable by those shareholders from whom the shares are purchased. †¢It increases gearing. Debt and other forms of loan capital: Debt capital is borrowing fund from others or public with issuing securities, bond, it is cheaper than cost of equity this is largely use from the high cost of equity. Debentures A debenture is a document that either creates a debt or acknowledges it, and it is a debt without collateral. In corporate finance, the term is used for a medium- to long-term debt instrument used by large companies to borrow money.In some countries the term is used interchangeably with bond, loan stock or note. A debenture is thus like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest and although the money raised by the debentures becomes a part of the company’s capital structure, it does not become share capital Features of debentures ?Debenture holders are not the owners of the company. They are considered the creditors of the corporation or in other words, the company borrows money from them through issuing debenture. No voting rights. The debenture-holder is not a shareholder and cannot vote in the company's general meetings. ?Fixed rate of interest. A debenture with a fixed charge has a fixed rate of interest. It can be presented as â€Å"10% Debenture†. They a re always unsecured and earns a fixed rate of interest but has no share of the profit. ?Compulsory payment of interest. The interest on debenture is payable irrespective of whether there are profits made or not. Mortgage A mortgage represents a loan or lien on a property house that has to be paid over a specified period of time.Think of it as your personal guarantee that you'll repay the money you've borrowed to buy your home. Mortgages come in many different shapes and sizes, each with its own advantages and disadvantages. Make sure you select the mortgage that is right for you, your future plans, and your financial picture Convertible loan stock A loan to a company in the form of bonds that can later be exchanged for shares under certain conditions. Investor Advantages In a convertible debt agreement, investors are viewed as creditors of the start-up business. This is advantageous if the company liquidates or goes bankrupt.Note holders are shown preferential treatment when the com pany's assets are divided. As the note is secured against the borrower's assets, an investor may feel more secure lending using convertible debt than he would through a traditional bank loan. Disadvantages for Borrower In the event that the convertible promissory comes due and it is not converted to equity or stock, the note still remains payable when the lender calls it in. The note is taken out against the company's assets, and the lender has the right to liquidate the assets to get his money.This can put a company in dire financial straits Warrants †¢Warrants give the holder the right to subscribe for a specified number of shares at a fixed price during as at the end of a specified time period. †¢Warrants are rights given to investors allowing them to buy new shares in a company at a future date at a fixed given price. †¢The price is known as exercise price. †¢The time at which they can be used to obtain shares is known as exercise period. †¢The warrant c onversion premium is calculated by comparing the cost of purchasing a share using the warrant and the current share price. BondsThe long term contract in which the bondholders lend money to a company. In return the company promises to pay the bond owners a series of interest payments known as coupons until the bond matures. At maturity the bondholder receives a specified principal sum called the par value of the bond. The increase or decrease in the market prices of a bond doesn’t affect the return. The investor only gets back the nominal value of the bond. Licensing and franchising This allow for the acquisition of a product, service or business concept of another organization, without the purchase of the other entity as a whole.In this an initial payment is required by the provider and also the royalties on subsequent sales, in return for marketing in an exclusive territory. Syndicated loans For large loans a single bank may not be able or willing to lend the whole amount. So they spread their lending to gain the risk reducing benefits of diversification. They prefer to participate in a number of syndicated loans in which a few banks each contribute a portion of the overall loan. It generally offers lower returns than bonds. And they are paid out before bond holders in the event of liquidation.Mezzanine finance Offering a high return with a high risk. The finance it provides is cheaper (in terms of required return) than would be available on the equity market and it allows the owners of a business to raise large sum of money without sacrificing control. It is used when the limits of bank borrowing has been reached and the business cannot or is not willing to issue any more equity capital. Medium term notes The company promises to pay the holders a certain sum on the maturity date, and in many cases a coupon interest in the period of time. And it may be unsecured.The interest rates may be fixed, floating or zero rate. Project finance Deal is mainly cre ated by industry corporations providing some equity for those who build and operate a project. The significant feature is that the loan returns are tied to the cash flows and fortunes of a particular project rather than being secured against the parent firms assets. For project finance, while the parent company s credit standing is a factor. The main focus is on the financial prospects of the project itself. And it is used to finance power plants, roads, ports, sewage facilities, telecommunications etc. nd the main advantage is that the finance is raised on the projects assets and cash flows and therefore is not recorded as debt in the parent company s balance sheet. Sale and leaseback If a firm owns buildings, land or equipment it may be possible to sell these to another firm and agree to lease the property back for a stated period under specific terms. Hire purchase The finance house allows the hirer firm to use the equipment in return for a series of regular payments. These payme nts are sufficient to cover interest and contribute to paying off the principal.After all payments have been made then the hirer becomes the owner. The main advantage for the customer is that interest part of the payments are allowable against tax, and capital allowances can be claimed on the asset. Leasing It’s similar to hire purchase. Here also the owner converts the right to use the equipment in return for regular rental payments by the user over an agreed period of time. Here the difference is that the lessee never becomes the owner. Operating lease Commit the lessee to only a short term contract. And don’t have to be reported on the face of the statement of financial position.They will not be included in gearing calculations. And liability of future rentals is reported as a note to the accounts. This is mainly useful for lessee in the case of high technology products which are quickly obsolete. Finance lease It is also called capital lease or full payment lease. The finance provider expects to recover the full cost of the equipment plus interest over the period of the lease. And the lessee has no right to cancellation. The lessee will have to bear the risks and rewards that normally go with ownership. And he will usually be responsible for maintenance, insurance and repairs.It is reported on the face of the statement of financial position. Short Term Finance Securitization: The process whereby companies, instead of raising finance by borrowing from financial institutions, Converts assets into securities for sale in the marketplace. This may be allowed in the lower interest rates. Note Issuance Facilities (NIFs) and Revolving Underwriting Facilities (RUFs):- The NIF acts as an underwriter. Should the borrower be unable to sell all notes, the syndicate is obligated to purchase all the remaining notes from the borrower, essentially providing credit.Note issuance facilities are useful in reducing risk and costs for both the borrower and the len der. A RUF differs from a note issuance facility (NIF) in that the underwriters provide loans instead of purchasing the outstanding notes that failed to sell. In either case, both RUF and NIF provide short- to medium-term credit in the Eurocurrency market. Commercial Paper :-(CP) An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities.Maturities on commercial paper rarely range any longer than 270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates. One example is where the company issues six month dollar notes in the European Commercial Paper Market (ECP). Medium-term notes (MTN) Range in maturity from one to 10 years. By knowing that a note is medium term, investors have an idea of what its maturity will be when they compare its price to that of other fixed-income securities.All else being equal, the coupon rate on medium-term notes w ill be higher than those achieved on short-term notes. The use of CPs and MTNs is limited in that a minimum size of company and issue restricts it to large companies, multinationals and certain public sector bodies, and they are driven by the demand of investors. Syndicated Credits:- The main goal of syndicated lending is to spread the risk of a borrower default across multiple lenders (such as banks) or institutional investors like pension’s funds and hedge funds.Because syndicated loans tend to be much larger than standard bank loans, the risk of even one borrower defaulting could cripple a single lender. Syndicated loans are also used in the leveraged buyout community to fund large corporate takeovers with primarily debt funding. Banks:- Bank lending to companies is predominantly short term, although it is also now a valuable source of medium term finance. a)Bank loans:- A short-term loan is a fixed amount of debt finance borrowed by a company from a bank, with repayment t o be made in the near future, for example after one year.The company pays interest on the loan at either a fixed or a floating rate at regular intervals, for example quarterly. A short-term bank loan is less flexible than an overdraft, since the full amount of the loan must be borrowed over the loan period and the company takes on the commitment to pay interest on this amount, whereas with an overdraft interest is only paid on the amount borrowed, not on the agreed overdraft limit. The interest rate for small companies on medium-term loans may either be at a fixed rate or at a margin above the bank's base rate.For larger companies, the interest rate on medium-term loans may again be fixed for up to five years, but is usually at a margin above the London Inter-Bank Offered Rate (LIBOR) adjusted every three, six, nine or twelve months in line with LIBOR movements. b)Overdraft:- An overdraft is an agreement by a bank to allow a company to borrow up to a certain limit without the need f or further discussion. The company will borrow as much or as little as it needs up to the overdraft limit and the bank will charge daily interest at a variable rate on the debt outstanding.The bank may also require security or collaterals protection against the risk of non-payment by the company. An overdraft is a flexible source of finance in that a company only uses it when the need arises. However, an overdraft is technically repayable on demand, even though a bank is likely in practice to give warning of its intention to withdraw agreed overdraft facilities. Overdrafts are often the ideal solution for short term borrowing and are extensively used to overcome short term cash flow problems, such as for funding purchase of raw materials whilst waiting payment on goods produced.There is no penalty for repayment of an overdraft, unlike (usually) the early repayment of a medium-term loan. The bank, though, can demand the repayment of an overdraft atany time, and many businesses have b een forced to cease trading because of the withdrawal of overdraft facilities by their bank. The advantages of an overdraft facility with the bank are that: †¢It provides flexibility. †¢It is a relatively cheap from of finance. †¢Interest is charged on the daily balance. The major drawback of an overdraft is that the bank can withdraw the overdraft facility at short notice.Trade Credit:- Trade credit is an agreement to take payment for goods and services at a later date than that on which the goods and services are supplied to the consuming company. It is common to find one, two or even three months’ credit being offered on commercial transactions and trade credit is a major source of short-term finance for most companies. The advantages of trade credit is that it is a relatively convenient, cheap and informal way of securing short term finance and is available to companies of all sizes. Factoring:-A financing method in which a business owner sells accounts rec eivable at a discount to a third-party funding source to raise capital. Factoring is the cash-management tool of choice for many companies. It is one of the most expensive forms of financing. The way it works is as follows: †¢Once a sale is made, the company invoices its customer and sends a copy of the invoice to the factor. †¢The factor then pays the company a set proportion of the invoice value within a pre-arranged time –typically, most factors offer 80-85% of an invoice's value within 24 hours. †¢The factor issues statements on the company's behalf and collects the payments.However, the company remains responsible for reimbursing the factor for bad debts, unless a â€Å"non-recourse† facility has been arranged. †¢The company will receive the balance of the invoice (less charges) once the factor receives payment. †¢The factor provides regular reports on the status of the company's sales ledger Typical charges on the amount financed range fr om 1% to 4% over base rate, with interest calculated on a daily basis. Credit management and administration charges, including the maintenance of the sales ledger, depend on turnover, the volume and number of invoices. Typical fees range from 0. 0% to 3. 0% of annual turnover –a company with 50 live customers, 1,000 invoices per year and ? 1 million turnover might pay 1%. Advantage:- †¢Cash flow is maximized as factoring enables a company to raise up to 80% or more on outstanding invoices †¢Using a factor can reduce the time and money spent on debt collection since the factor will usually run the sales ledger for the company †¢The factor's own credit control system can be used to help assess the creditworthiness of new and existing customers †¢Factoring can be an efficient way to minimize the cost and risk of doing business overseas Disadvantage:- The factor usually takes over the maintenance of the sales ledger, and customers may prefer to deal with the c ompany it is trading with rather than a factor †¢Factoring may impose constraints on the way business is conducted –for example, the factor will apply credit limits to individual customers and for non-recourse factoring, most factors will want to pre-approve customers, which may cause delays †¢The client company might only want the finance arrangements and yet it might feel it is paying for collection services they do not really need †¢Ending a factoring arrangement can be difficult where the only exit route is to repurchase the sales ledger or to switch factors and that could cause a sudden shortfall in working capital. Invoice Discounting:- A method to draw loans from a company’s outstanding invoices that does not require the company to relinquish administrative control of the invoices. An invoice discounting company will review the outstanding invoices on the company's ledger, and will determine the amount of loans that it will extend. Because the mon ey is loaned, the company will be responsible for interest payments, as well as a fee to the invoice discounting company. The requirements are more stringent than for factoring and different invoice discounters will impose different requirements. ‘Confidential invoice discounting† ensures that customers do not know a company is using invoice discounting as the client company sends out invoices and statements as usual. However, the costs of this are greater since the discounter is carrying a greater degree of risk. Bills of Exchange:- Bills of exchange are similar to checks and promissory notes. They can be drawn by individuals or banks and are generally transferable by endorsements. The difference between a promissory note and a bill of exchange is that this product is transferable and can bind one party to pay a third party that was not involved in its creation. If these bills are issued by a bank, they can be referred to as bank drafts. If they are issued by individual s, they can be referred to as trade drafts. International capital marketsThere is an increasing internationalization of capital markets, especially for the larger companies. Eurocurrency:- Currency deposited by national governments or corporations in banks outside their home market. This applies to any currency and to banks in any country. For example, South Korean won deposited at a bank in South Africa, is considered Eurocurrency. The market generally offers high rates of interest, flexibility of maturities and a wide range of investment qualities in comparison with other capital markets. The unique feature is that the transactions in each currency take place outside the country from which that currency originates.On the short-term, inter-bank Eurocurrency market, transactions may take place between banks on an unsecured basis from overnight to five years' duration. Most transactions are for six months or less and transaction of over ? 1m is common. Eurobonds:- The Eurobond market is an international capital market which has developed alongside the Eurodollar market since the 1960s. Usually, a Eurobond is issued by an international syndicate and categorized according to the currency in which it is denominated. A Eurodollar bond that is denominated in U. S. dollars and issued in Japan by an Australian company would be an example of a Eurobond. The Australian company in this example could issue the Eurodollar bond in any country other than the U. S. A bond issued in a currency other than the currency of the country or market in which it is issued. ) The following advantages are claimed for the Euromarkets in various currencies: †¢Extremely large sums can be raised or deposited. †¢Money will often be cheaper than the domestic markets. †¢Controls tend to be less restrictive. †¢Some protection against exchange rate movements is offered, but here the user will require a high level of skill in selecting his or her alternatives. †¢ Any perio d of surplus or shortage from one day to five years can be accommodated. †¢The markets offer a useful alternative to other sources of capital which the company Eurobonds Available:- †¢Straight fixed rate bondsThe majority of Eurobonds with a fixed coupon can be described thus. Interest is generally paid out once each year and is calculated using a 360-day year. Some older issues do pay half-annually. †¢Equity related bonds These may take two forms: Convertibles–whereby the bond holder has the right (but not the obligation) to Convert the bond into ordinary shares at a pre-determined price. Eurobonds with warrants–which are similar to convertible bonds in that warrants are attached to the Eurobond enabling the holder to purchase ordinary shares represented by the warrants at, or between, specified dates. The exercise price will be set in a similar fashion to that of convertible Eurobonds. †¢Floating rate notes (FRNs)A note with a variable interest ra te. The adjustments to the interest rate are usually made every six months and are tied to a certain money-market index. Also known as a â€Å"floater†. Borrowing in the Euromarkets;- Borrowers in the Euromarkets include: †¢Companies needing dollars for investment in the USA. †¢Unit trusts and investment trusts investing in foreign securities. †¢The United States banks, which find that it is expedient to take up loans through the European market rather than to borrow in the USA. †¢Multinational companies wishing to invest in a particular country without wishing, or being able, to transfer capital from their base country. National governments and bodies associated with national and international agencies. Euro equity:- An Initial Public Offer occurring simultaneously in two different countries. The company’s shares are listed in various countries rather than where the company is based. Choice of Currency for Borrowing The factors affecting the choice of currency used for company borrowing include: †¢The ease and speed of raising finance, which is often easier outside the domestic markets. †¢The size of the debt –larger loans tend to be borrowed in the Euromarkets. †¢The cost of issues –small changes in interest rates can have a significant impact if the loan is large. Whether the currency is required immediately (including coverage in preventing exchange exposure) and in the long run. †¢The security the company has available –Euro borrowings are generally unsecured. Advantages of Raising Funds in International Markets:- There are several advantages to the company in raising funds in international markets, including: †¢It is useful if the company's own capital market is too small, or too complex and/or regulated to raise the required finance quickly and easily. †¢It improves the liquidity and reputation of the company. †¢It may improve trade if the company trades in the cou ntry of the currency/capital market. †¢It can help in preventing takeover bids.