TRN170Y1 Chapter Notes - Chapter books 1-2: Two-Face

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tanelephant390

19 Jan 2017

School

UTSG

Department

Trinity College Courses

Course

TRN170Y1

Professor

Andrew Connolly

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Document Summary

Plot summary of the passage: the passage within the larger context of the work (books 1 and 2) The first thing the new police commissioner wanted to do was get an arrest warrant for. Batman which jim gordon did not like at one point it had see(cid:373)ed that the (cid:373)uta(cid:374)t ga(cid:374)g (cid:449)as the least of gotha(cid:373) (cid:272)it(cid:455)"s pro(cid:271)le(cid:373)s, a(cid:374)d. The graphics of each scene: diction: diction throughout the passage makes the scene very dramatic in context and (cid:271)uilds up to the (cid:272)li(cid:373)a(cid:454) (cid:449)hi(cid:272)h is bru(cid:272)e wa(cid:455)(cid:374)e"s (cid:271)reak through i(cid:374)to (cid:271)e(cid:272)o(cid:373)i(cid:374)g the. The text focuses on what the characters particularly think about batman, The constant dialogue leaves little space for an omniscient third person narrator. The text is un(cid:272)lear a(cid:271)out (cid:449)h(cid:455) bru(cid:272)e wa(cid:455)(cid:374)e (cid:272)ould(cid:374)"t (cid:272)o(cid:374)trol his desire i(cid:374)to re(cid:448)erti(cid:374)g (cid:271)a(cid:272)k into batman, the text only indicated that bruce felt like he had no purpose without his career. The horrified look on his face by hearing about the mutant gang.

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Hello, could I get some assistance summarizing this article for a discussion:

Read the articles and discuss the problems of Economic Inequality in the U.S.economy, summarize key points and post in the Discussions area:

Competition police crossing continents

Competition authorities are increasingly reaching beyond their country's borders

Feb 22^nd, 2014

WHEN TWO AMERICAN presidents, Theodore Roosevelt and William Howard Taft, embarked on a trustbusting mission a century ago, they were taking government into a new policy area: competition. Industrialization was still relatively new, and any monopolies that had emerged, such as the British and Dutch East India companies, had been created by governments.

The robber-baron companies of the late 19th century were accused of using their industrial muscle to drive competitors out of business. Private monopolies, the argument ran, diminished the benefits of capitalism; by definition, the existence of a monopoly made it impossible for a free market to operate.

Since then, governments have generally had some kind of competition policy, though not necessarily a coherent one. Politicians have tried to juggle several different priorities, among them putting the government in control of "strategic" industries (a category that has always included defense but often also a range of other industries, from airlines to car manufacturing, power generation, and telecoms); shielding domestic businesses from foreign ownership or competition, and protecting consumers from price-gouging.

In the past two decades, a new concern has emerged: that monopolies may be restricting innovation. The technology industry seems to have been particularly prone to creating near-monopolies, from Microsoft in software to Amazon in retailing and Google in an internet search. This is due to network effects. Consumers gravitate to the dominant technology, either because it offers more products or because many of their friends are already using the network concerned. These monopolists, it is feared, will be slow to introduce new technologies that might cannibalize their existing business; and they will be so entrenched that new competitors will find it hard to get a foothold.

Microsoft bundled its Internet Explorer browser with its dominant Windows operating software on personal computers. America's Department of Justice saw this as an attempt to force Netscape, a rival browser, out of the market. In a long court case that began in 1998, Microsoft was initially ordered to break itself in two. This ruling was overturned on appeal and a less onerous settlement was arrived at.

At the time many commentators felt that the authorities had overreached themselves. Internet Explorer was provided free of charge, so it was hard to see how consumers were being harmed. But this is a tricky area. On the one hand, rapid technological change can cause once-dominant companies to lose their position very quickly if they do not adapt; look at Nokia's and BlackBerry's mobile-phone businesses. Some argue that if the market is capable of such adjustment, governments should not get involved. The fact that some consumers make the wrong decision some of the time is not the basis for intervention, as long as all consumers are not being ripped off, says Simon Bishop of RBB Economics, a consultancy. On the other hand, such rapid change makes it hard to tell whether monopoly positions are being exploited, or whether a more competitive market would have produced more innovations.

Competition authorities have also had to rethink their role in cross-border deals. If one multinational takes over another, that might not create a monopoly in the country where the two groups have their headquarters, but it could do so in another country. A proposal for a merger between General Electric and Honeywell, announced in October 2000, was cleared by America's Department of Justice but blocked by the European Commission the following year. That objection appeared to herald a new era of transatlantic takeover disputes; in fact, it remains the only deal so far to have been cleared in America but blocked on the other side of the Atlantic.

However, there have been other instances of transatlantic disputes. In 2009 the European Commission imposed a 1.06 billion ($1.4 billion) fine on Intel, a chipmaker, after a complaint brought by an American rival, AMD. The ruling seemed to suggest that multinationals faced the prospect of double jeopardy because of inconsistent international rules.

We do it our way

There are some philosophical differences between Europe and America. Europe has a long tradition of state ownership of industry; even after privatization, many such companies retain dominant positions, at least in their national markets. In America, by contrast, market leaders have got there the hard way, by having superior technology or being more efficient. In Europe competition policy tends to be rules-based, with the European Commission issuing guidance for future mergers to follow; in America merger decisions tend to be hammered out in the courts, establishing legal precedent.

But multinationals also have to deal with competition policy in emerging markets. China is a particular challenge. The Chinese use competition policy to achieve other ends to keep out foreign firms or attack existing foreign businesses says, one expert. Latin American countries have tended to adopt the American model of competition policy, whereas eastern Europe has followed the example. Merger authorities from different countries have set up the International Competition Network to share the experience. Such efforts may reduce the double-jeopardy problems in international mergers, if only because rules may be applied more consistently.

In the longer term, the question is whether national competition policies will prove adaptable enough to cope with a globalized economy. It may make economic sense for global companies to exploit economies of scale and bring down prices for consumers, but national governments may be reluctant to accept the loss of control involved. In air travel, for example, fares have been reduced under pressure from low-cost airlines, but these newcomers are still being held back by policies that favor flagship carriers. If regulators in rich countries were to prove more zealous than their counterparts in emerging markets in restricting the size of multinationals, Western firms might be put at a competitive disadvantage.

New concerns for competition authorities are emerging all the time. Chris Walters, the acting chief economist of Britain's Office of Fair Trading (OFT), cites the practice of pay-for-delay, whereby a firm that holds a drug patent pays a generic manufacturer not to launch a rival drug to preserve the patent-holders monopoly profits. And David Currie, the chairman of the Competition and Markets Authority (which will take over from the OFT in April), recently pointed to a vast new potential problem, which he described as the growing collection, processing, and use of consumer-transaction data for commercial ends. This is proving an increasingly important source of competitive advantage; we need to be alert to the possibility that it will be an increasing source of consumer detriment.

aquamarinemoose208

How Much Should You Pay to be âGreen?â

Tracey works in the capital budgeting department of SustainableSolutions (SS), which is a company that manufactures products andconsults on issues that relate to the protection and preservationof the earthâs environment. Traceyâs primary responsibility is toestimate the companyâs cost of capital, which is the âhurdleâ ratethat is used to make final capital budgeting decisions.

During the 10 years that Tracey has worked at SS, she has beenvery pleased with the service the company has provided to othercompanies and environmentalists. Tracey is very compassionate aboutenvironmental issues, and she tried to get involved in movementsand do everything she can to help clean up and protect theenvironment.

Last week, Manual, a coworker who works in the capital budgetingdepartment as a project analyst, told Tracey about a project he iscurrently analyzing. Although he doesnât completely understand thetechnology, Manual told Tracey that he thought purchasing theproject would allow the firm to significantly increase its presencein the âgreenâ industry and that it would also propel SS into theleadership role in the quest to clean up and protect theenvironment.

Tracy was ecstatic after talking with Manual. But her excitementwas short-lived because another coworker, one who is part of theteam that is evaluating the new project, indicated that theanalyses that have been completed to-date suggest that the projectmight not be purchased because its internal rate of return appearsto be below the firmâs required rate of return. It will be a fewweeks until the capital budgeting analyses are complete.

Because she believed that the environmental benefits of theproject far outweighed its possible financial drawbacks, Traceydecided to think of ways she could help âswayâ the final capitalbudgeting decision in favor of purchasing the project. As luckwould have it, Tracey is close to completing a revised evaluationof the firmâs cost of capital. She knows that the results of herevaluation will be used to help decide whether the new project isacceptable. As she pored over her numbers, Tracey realized that ifshe used a different approach to determine the proportions of debtand equity that are used to compute the firmâs weighted averagecost of capital (WACC), a higher weight would be given to debt,which has the lowest component cost of capital. It has been thepolicy of the company to compute the weights for the capitalcomponents using the market values of the firmâs debt and equity.However, Tracey discovered that debt, which has a substantiallylower cost than equity, will have a higher weight if book valuesare used. If the WACC is computed using the higher weight given todebt, the required rate of return used to evaluate the new projectprobably will be low enough to ensure that the new project isaccepted.

Tracey doesnât feel like she is âcheatingâ by making the changebecause she doesnât think that market values should be used todetermine the weights for the capital components; she believes thatbook values are more appropriate. Tracey is convinced she canjustify the deviation from policy if her bosses question why sheused book values to determine the weights.

Do you think it is okay for Tracey to change the way shecomputes SSâs WACC? What would you do if you were Tracey?

burgundycattle629

In March 2015 the management team of Londonderry Air (LA) met to discuss a proposal to purchase five short haul aircraft at a total cost of $25 million. There was general enthusiasm for the investment, and the new aircraft were expected to generate an annual cash flow of $4 million for 20 years.

The focus of the meeting was on how to finance the purchase. LA had $20 million in cash and marketable securities (see table), but Ed Johnson, the chief financial officer, pointed out that the company needed at least $10 million in cash to meet normal outflow and as a contingency reserve. This meant that there would be a cash deficiency of $15 million, which the firm would need to cover either by the sale of common stock or by additional borrowing. While admitting that the arguments were finely balanced, Mr. Johnson recommended an issue of stock. He pointed out that the airline industry was subject to wide swings in profits and the firm should be careful to avoid the risk of excessive borrowing. He estimated that in market value terms the long-term debt ratio was about 59% and that a further debt issue would raise the ratio to 62%.

Mr. Johnson's only doubt about making a stock issue was that investors might jump to the conclusion that management believed the stock was overpriced, in which case the announcement might prompt an unjustified selloff by investors. He stressed therefore that the company needed to explain carefully the reasons for the issue. Also, he suggested that demand for the issue would be enhanced if at the same time LA increased its dividend payment. This would provide a tangible indication of management's confidence in the future.

These arguments cut little ice with LA's chief executive. "Ed," she said, "I know that you're the expert on all this, but everything you say flies in the face of common sense. Why should we want to sell more equity when our stock has fallen over the past year by nearly a fifth? Our stock is currently offering a dividend yield of 6.5%, which makes equity an expensive source of capital. Increasing the dividend would simply make it more expensive. What's more, I don't see the point of paying out more money to the stockholders at the same time that we are asking them for cash. If we hike the dividend, we will need to increase the amount of the stock issue; so we will just be paying the higher dividend out of the shareholders' own pockets. You're also ignoring the question of dilution. Our equity currently has a book value of $12 a share; it's not playing fair by our existing shareholders if we now issue stock for around $10 a share.

"Look at the alternative. We can borrow today at 6%. We get a tax break on the interest, so the after-tax cost of borrowing is .65*6 = 3.9%. That's about half the cost of equity. We expect to earn a return of 15% on these new aircraft. If we can raise money at 3.9% and invest it at 15%, that's a good deal in my book.

"You finance guys are always talking about risk, but as long as we don't go bankrupt, borrowing doesn't add any risk at all. In any case my calculations show that the debt ratio is only 45%, which doesn't sound excessive to me.

"Ed, I don't want to push my views on this after all, you're the expert. We don't need to make a firm recommendation to the board until next month. In the meantime, why don't you get one of your new business graduates to look at the whole issue of how we should finance the deal and what return we need to earn on these planes?"

Evaluate Mr. Johnson's arguments about the stock issue and dividend payment as well as the reply of LA's chief executive. Who is correct? What is the required rate of return on the new planes?

Balance sheet
bank Debt	50	cash	20
other current liabilities	20	other current assets	20
10% bond, due 2032*	100	Fixed assets	250
Stockholders' equity**	120
Total liabilities	290	Total Assets	290
Income statement
Gross Profit	$57.5
Depreciation	20.0
Interest	7.5
Pretax profit	30.0
Tax	10.5
Net profit	19.5
Dividend	6.5

*the yield to maturity on LA debt is currently 6%

**LA has 10 million shares outstanding, with a market price of $10 a share. LA's equity beta s estimated at 1.25, the market risk premium is 8%, and the Treasury bill rate is 3%

TRN170Y1 Chapter Notes - Chapter books 1-2: Two-Face

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