COPORATE FINANCE Essay Example | Topics and Well Written Essays - 3500 words

COPORATE FINANCE - Essay Example This capital need not be paid back to the investors as long as the company is in existence. Thus, equity source is the least risky source of fund from the view point of borrower. At the same time, when the company makes huge profit, the profit left after meeting all obligations might be distributed among the equity shareholders, and this is the most appealing factor of equity capital. That does not mean that company has to distribute capital whenever it makes residual profit (profit left after making all other payments). The decision to distribute or not to distribute divisible profit is ultimately taken by the Board of Directors. The return to ordinary shareholders (dividend/cost to the company) is paid after meeting all payments like dividend to preference share holders and interest payments to debenture holders and other long term suppliers of funds. Financial needs are continuous for any growing firm. As the needs for expansion and diversification enhances these days. This capital can come from debt or equity. When companies can finance themselves with either debt or equity, certain questions arise. Is one better than the other' If so, should firms be financed with all debt or all equity' If the best solution is some mix of debt and equity, what is the optimal mix' It is generally understood that the optimal capital structure of a firm is the composition of debt and equity which results in the minimum cost of capital. But the determination of an optimal capital structure is not an exact science. Firms have to first analyze a number of factors such as the firm's business risk, its need for financial flexibility, shareholder wealth maximization, survival against competition, assurance of a steady source of funds, acquisition and maintenance of a good rating in the market, profitability, and growth rate before deciding upon an app ropriate capital structure. All these factors are a pointer to one important fact, that, companies will have to search for the right capital structure which enhances firm value while minimizing costs. The capital required for investment, while often scarce, can be generated from a variety of sources. How firms choose among these various sources and why, have been the source of much debate in financial literature. Many theories have been developed to show the relationship between capital structure and firm value. There are different views on how capital structure influences firm value. Some authors argue that there is no relationship between capital structure and the value of the firm, whereas others hold that financial leverage has a positive effect on firm value. There are also some who take the intermediate approach that financial leverage has a positive effect on the value of the firm that is only up to a certain point and thereafter there will be negative effect, another contention that, other things being equal, the greater the leverage, the greater the firm value. According to the net income approach when leverage varies, the cost of debt and the cost of equity remain unchanged. Therefore, the weighted average cost of capital declines as leverage increases and the value of the firm will increase. Under the net operating income approach, the overall capitalization rate remains constant for all degrees of leverage and therefore, the value of the firm will remain unchanged.

Key historical and political trends in nursing research Essay

Key historical and political trends in nursing research - Essay Example Nursing research is not separate from nursing practice, it is a process that is interconnected with, is influenced by and influences other nursing components. These are philosophy, knowledge, science, theory, research, abstract thought processes, and nursing practice. (Burns et al, 2003). Nursing Theory links nursing knowledge to research and nursing practice. Dennis (1997) defines nursing theory as "a set of concepts and propositions derived from philosophical beliefs about the phenomena of interest to the discipline; relationships between concepts and propositions of a nursing theory purport to describe and explain characteristic phenomena of interest to nursing". (Dennis,1997 p.2). Nursing history is laced with nurses who have developed theories to explain nursing. Florence Nightingale is considered the first theorist and nurse researcher. Her principles of pure air, pure water, efficient drainage, cleanliness, light, proper nutrition, and rest were necessary elements to prevent spread of disease and maintain good health. Her precepts formed the basis of education for nurses during this time period. The 1950s, 1960s, and early 1970 saw the emergence of nurse researchers who sought to answer the questions pertaining to the role of the nurse and patient - nurse interaction. During this period, nurses developed nursing theories derived from the fields of sociology, and education. (Kukkala and Munnukka, 1994). Prominent figures were Hildegarde Peplau, who was concerned about developing interpersonal interaction between patient and nurse. Virginia Henderson focused on assisting the patient to gain independence. Faye Abdellah concentrated on delivering holistic nursing care Dorothea Orem focused on assisting the patient to attain self-care. These women set the path for the knowledge and theoretical base of the nursing profession. The National Center for Nursing Research, established in