Police Supervision and Management Complete Unit 3 Essay

Police Supervision and Management Complete Unit 3 - Essay Example Efficiency is the achievement of a given task using the least cost or resources possible. To calculate efficiency, the input must be compared to the output. The cost of input can be estimated, but the output of police may not be readily determined. Nevertheless, for departmental success, the police must perform to a give high output and in turn a high efficiency, which translates to high productivity. Effectiveness refers to the proper performance of tasks to meet the program goals. When police officers are assigned duties, supervisors must make follow-ups to ensure their effectiveness. This confirms why effectiveness is critical in productivity measurement. Equity is the quality of services delivered to the community by police. Timely response, enough patrol units, and equal services to all are some measures of equity. Thus, quality of police services to the community is a measure of their performance. Accountability is the state of being answerable to whether resources are used for the intended purpose or not. Hence, proper use of resources can be monitored by frequent productivity and performance measurement (Iannone, Iannone, & Bernstein, 2009). It is the duty of supervisors to evaluate subordinates’ performance. In regard to this question, the principal issues associated with the ability of supervisors to evaluate subordinates. Also, insights on things that can be applied to minimize the effect of errors in performance ratings will be provided. Some of the methods used in performance evaluation in an agency of law enforcement or a correctional facility will be stated, with their benefits and drawbacks. The main issues associated with the ability of supervisors to evaluate subordinates are Citizen Surveys, Planning and Problem Solving, CompStat, and Subordinates Rating. Approaches employed to minimize rater errors include rater training, enhanced observational skills, use of a

Slavery Abolishing in 1807 in Britain Essay Example | Topics and Well Written Essays - 1000 words

Slavery Abolishing in 1807 in Britain - Essay Example Slaves were captured in Africa and transported to Europe where they were sold to owners where they worked in plantations. Slaves were mistreated and harassed by their owners. They were not paid for the hard work they performed in plantation. During the transportation of slaves many would die of disease and only a few would arrive healthy for them to be auctioned. Problems would arise where the slaves would die from tropical diseases and owners would not provide proper medical care, slaves would be beaten mercilessly by their master and owners and there were no laws governing this immoral behaviour. However a few individuals in the society would consider slavery and slave trade as an immoral behaviour and this led to the formation of anti slavery movements. The abolishment of slavery was a long struggle dated back in the 1750 where a number of Quakers started to disapprove slave trade, the Quakers started to disapprove slave trade and encouraged slave owners to educate slaves, introdu ce them into Christianity and improve their working and living conditions, in 1783 a group of six Quakers pioneered a movement that was to start the struggle to abolish slave trade. These members included George Harrison, John Lloyd, William Dillwyn, Joseph Hooper, Joseph Woods, and James Phillips. this was a non denominational movement which was aimed at gaining support from parliament and the Anglican church. This movement gained popularity and an additional of three members from the Anglican Church joined the movement and this really strengthened this group, these Anglican members included William Wilberforce, Thomas Clarkson and Granville Sharp. After the joining of the religious members William Wilberforce was chosen to be the group member due to his connection with the British parliament, the struggle continued but Wilberforce faced strong resistance to the abolishment of slave trade in parliament and this was due to the fact that there was a powerful dependence on slaves and slave trade. The first petition to abolish slave trade was made in 1783 but it failed by the vote where more member opposed the abolishment of slave trade. In 1787 a committee for abolishment of slave trade was founded, the new mission was to inform the public on the immoral acts of slavery, this movement involved writing books on slavery, posters and printings pamphlets and holding rallies. This brought attention to the entire public to abolish slave trade. In 1791 Wilberforce presented a bill to abolish slave trade but the bill lost by the vote where 163 votes opposed the bill and only 88 agreed to this proposal, however this did not stop the committee from further publicity through the visit to places to enlighten the public and writing anti slavery work. Clarkson who was a committee member toured all cities and ports of England to inform the public about the ills of slave trade and slavery. In 1804 there was a successful revolt by slaves in Haiti, this revolt which was known as the Haiti revolt brought about a sense of insecurity among the public members who owned slaves, during this years also there was an increase in the number of slave owners who were slain by their slaves and this sense of insecurity brought about members of the public to support the ant slavery movement even in parliament Wilberforce who was a member of parliament for this period and continued to introduce the anti terrorist bill each year and it was not until 1807 that the British parliament abolished slave trade through the vote by members of parliament. From the above discussion it is clear that the

Tituba and two elderly women Essay Example for Free

Tituba and two elderly women Essay However nobody can be held totally responsible, if the people had not believed Abigail and been so nai ve to think that witchcraft was present in the village none of it would have happened. The heroes of the story are all those that stuck to their principles and died for their cause. Corey would not condemn his friend as the others had done and stuck to his principles throughout the play. Rebecca Nurse who will not lie to save herself and Proctor who fights against the charges and does what is morally right in the end. Hale tried to be a hero as he tried to save the lives of the condemned but it was too late for him, the damage had been done. The village rapidly becomes split in two, those who are for the court and those against it. For the court are: Parris, Abigail, Danforth, Hathorne, Mary Warren, Putnam and Goody Putnam, all having very different reasons for being on that side, they are also supported by the majority of the. Against the court are: Elizabeth, Proctor, Giles Corey, Martha Corey, Rebecca Nurse and Francis Nurse. Hale is for the court proceedings at the beginning of the story then changes to against during the court scene in Act Three. These are quotes that support the court: Mrs Putnam: You think it is Gods work you should never lose a child, nor grandchild either, and I shall bury all but one? There are wheels within wheels in this village, and fire within fires! Putnam: She cannot bear to hear the Lords name, Mr Hale; thats a sure sign of witchcraft afloat. This woman must be hanged! She must be taken and hanged! Mary: I must tell you sir, I will be gone every day now. I am amazed that you not see what weighty work we do. You must see it sir, its Gods work we do. So Ill be gone every day for some time. Im I am an official of the court, they say. I am bound by law, I cannot tell it. Cheever: I am a clerk of the court now, yknow. Hathorne: Arrest him Excellency! This is contempt, sir, contempt. Danforth: This is the highest court of the supreme government of this province, do you know it? But you must understand, sir, a person is either with this court or he must be counted against it, there be no road in between. Hang them high over the town! Who weeps for these weeps for corruption! Parris: Hes come to overthrow this court, Your Honour! These are quotes against the court: Rebecca: I think Ill go then. I am too old for this. Francis: Reverend Hale! Can you not speak to the Deputy Governor? Im sure he mistakes these people. We have proof of it, sir. They are all deceiving you. Proctor: If she is innocent! Why do you never wonder if Parris be innocent, or Abigail? Is the accuser always holy now? Were they born this morning as clear as Gods fingers? Ill tell you whats walking Salem vengeance is walking Salem. We are what we always were in Salem, but now the little children are jangling the keys of the kingdom, and common vengeance writes the law. I will fall like an ocean on that court! Hale after he sides with the court: I denounce these proceedings, I quit this court! Throughout the play Miller is trying to convey certain messages which he felt were important. Although this was written fifty years ago, many are relevant today. One message is Power corrupts the power that Abigail held over not only the girls but also the community helped her to corrupt their minds and beliefs. Without this corrupting power the situation would not have gone to court and innocent people would not have died. Corporal and capital punishment are wrong. Throughout the play each character that was for the court was not for it for the right reasons. Parris was for the court to gain revenge on Proctor and to retain his position in the community, Abigail to take the blame off herself and to eradicate Elizabeth from the love triangle, Putnam to gain land and Mrs Putnam as she cannot seem to grasp the fact that she cannot have children, Hathorne and Danforth as they are enforcing the law and Mary Warren as she is taken in by Abigail. None of the accusations are based on true facts, as a result of these lies innocent people were hanged. If we read the Echoes down the Corridor it states that Twenty years after the last execution, the government awarded compensation to the victims still living and to the families of the dead. Basically the government admits that the hangings were wrong, but no money will bring back the people who were lost, capital punishment cannot bring back the dead if they are found to be innocent later. Echoes down the corridor gives the reader an insight into what happened after the hangings and the effect on the community, Parris was voted from office and left Salem, Abigail turns into a prostitute, Elizabeth married again and farms belonging to victims were left to ruin. The things mentioned are true and are not fictional it shows that Abigail, after her scheming lying ended up in the lowest, demeaning job. Greed is a powerful motivator. The Putnams throughout the play are fuelled by their greed for more land. Their motivation for encouraging the trials, along with the death of their seven babies was greed for land. They do not care who they hurt and consequently, in effect murder, so long as they get what they want. Consider the consequences of your words/actions. Throughout the story people did not think what the possible consequences could be of crying witchcraft. If Abigail had stopped to think that there was a possibility that Proctor would have been hanged, she would not have done what she did. Proctor did not think when he slept with Abigail that Elizabeth would find out and that it would cause friction in their relationship. If Mrs Putnam had accepted the fact that she cannot bear children, she would not have accused anyone, then lives would not have been lost. If Hale had realised right from the beginning that witchcraft was not present in Salem, that the accusations would lead to innocent people being hanged and listened to his conscience, then he may not have been so hungry for statements. Evil as well as good is endemic in society. Both evil and good people can be found in society. Characters such as Abigail, Putnam and Parris were evil in the story and good characters were Proctor, Elizabeth, Giles Corey and Rebecca Nurse. However if there were no evil people in society and in the play we would not know what good was. I think this is an excellent play. I like the way it is based on a true story as it makes it more interesting to read and watch. I think that Miller is a very clever playwright using interesting plots, characters and language to add interest to the play. The messages it conveys were not only relevant then but also now, there is evidence supporting many of his messages today. I think the way Miller leaves it up to you to decide about the characters personalities and their actions is part of what makes the play please everyone, everybody can take something away from the play. My particular favourite quote is said by Elizabeth in Act Two I do not judge you. The magistrate sits in your heart that judges you. To me it means that the only person who can judge you is yourself, nobody else can, as long as you are happy with whom you are. The tension and drama of the play, particularly between John and Elizabeth and during the court scene makes an excellent play. There is great contrast between certain moments for example Act One ends with frantic cries from the girls then Act Two begins with tension and silence between Elizabeth and John. Throughout the story you constantly ask yourself, will John stick to his principles and become a martyr or will he back down and live? Will people continue to believe Abigail? These elements of the play makes you want to read on and find out. The love element throughout the story makes it interesting and we can empathise with the characters, the plot is not unbelievable. The ending has a twist to it, we begin to believe that Proctor will sign the confession then he tears it up, the ending satisfies everybody, Proctor is forgiven and dies a hero. We know Abigail is a villain, but we cannot help but feel some sympathy for her, she watched her own parents killed, she is an orphan living in a community in which she feels suffocated and her heart has been torn apart. When we first began to read the play I did not understand it because there are so many characters and I did not understand the background to the play or generally what was happening. The language was difficult to understand and I did not understand where the play was leading. When we watched a video of the play I began to understand it and was disappointed when we finished reading the play as I had just begun to enjoy it. When I watched the video I learnt who all the characters were, what their positions were in the village and what was happening. I found it easier to understand and I felt that the costumes and the houses made me feel more like I was there. I thought the video was close to the script in the book and was a good representation of the play in film form. I think that if I read this play again I would really understand it and appreciate it even more. Show preview only The above preview is unformatted text This student written piece of work is one of many that can be found in our GCSE Arthur Miller section.

Effect of MA Strategy on Shareholder Value

Effect of MA Strategy on Shareholder Value The aim of this project is to examine whether the decision of large UK companies looking to pursue a merger/acquisition strategy will affect shareholder value. The data analyzed in this study will determine if there is a positive or negative correlation in shareholder wealth when a merger/acquisition occurs. The research for this project will be conducted through the analysis of 40 different large UK companies that were merged or acquired by other UK based firms prior to 2002. The data will be obtained from the Bloomberg website. Further research and analysis on the topic will include information obtained from books, journals and reliable internet sources. To test the value of shareholder wealth when a merger/acquisition is pursued, different models will be used which includes Capital Asset Pricing Model, Efficient Capital Markets, Equilibrium Models, and Market Model (Event Studies and Abnormal Returns Methodology). The hypothesis that will be tested in this study is: H0 = If managers of large sized UK companies pursue a merger and acquisition strategy then shareholder wealth (value) will increase. H1 = If managers of large sized UK companies pursue a merger and acquisition strategy then shareholder wealth (value) will remain unchanged or will decrease. The first chapter will give a brief overview of mergers and acquisitions and introduce the reader to recent merger trends in the UK and different types of takeovers. The second chapter will be an in-depth analysis of past research studies which includes: examining different ways a company pays for a bid in a merger, exploring shareholder and managerial wealth perspectives, and analyzing long term post-merger performance of target and bidder firms. Chapter three presents the research methodology used in wealth gain studies and also states the methodology adopted for this dissertation. Chapter four analyzes and discusses the findings in context to wealth gain effects of mergers and acquisitions among the large UK companies chosen for this study. Chapter five concludes this research and highlights possible areas that may require further investigation. EXECUTIVE SUMMARY Mergers and acquisitions have become important events in todays rapidly changing business environment and have been the subject of many research studies. Reasons as to why companies may pursue a merger or acquisition strategy could be to reduce costs to achieve economies of scale or to reduce competition due to increased market power. Mergers and acquisitions have also been known to facilitate entry into new markets or industries and increase the level of effectiveness in a company by eliminating inefficient management. Mergers and acquisitions worldwide have tended to follow a pattern of waves, with there being periods of frantic takeover activity followed by relatively calmer periods. The main objective of financial theory is to maximize shareholder wealth therefore all decisions are taken with the aim of maximizing shareholder value. The purpose of this research is to re-examine the shareholder wealth gain criterion with regards to mergers and acquisitions within the United Kingdom. The objective of this study is to find out if shareholders of large UK companies benefit from the acquisition decisions made by the managers. Past research studies on post-acquisition performance of acquiring and target firms have mixed results. To determine if there is an increase or decrease in shareholder value from corporate takeovers, the Market Model and Event Study Methodology will be used in this study. The hypothesis developed in this study aims to support the argument that mergers and acquisitions are profitable events and lead to an increase in shareholder value. This study however concluded that merger and acquisitions among the large UK organizations chosen did not lead to an increase of shareholder value for both target and bidder firms. These results might not be entirely accurate due to various reasons such as size effects and the firms chosen in this study are from different industries. Other factors such as acquisition financing and acquisition motives also may have an effect on shareholder value however the testing of these factors is outside the scope of the following study. CHAPTER 1: OVERVIEW OF MERGERS AND ACQUISTIONS The following chapter briefly examines the benefits that a merger is expected to generate for both the target firm and the acquiring firm. The historical pattern of takeover activity in the UK from 1964-1992 is discussed to show merger and acquisition (MA) trends and recent MA activity abroad and within the UK will also be highlighted among large UK companies in 2008. In addition, the definition of mergers and acquisitions is provided and the second part of chapter one introduces the reader to different types of mergers used to create value for an organization. 1.1 Benefits to Mergers and Acquisitions Activity The main objective for an acquiring firm is to grow and expand its assets, sales and market shares. Other specific reasons for entering into a merger bid are reflected in the benefits that are expected to be generated which include: Exploiting scale economies Obtain synergy Enter into new markets To restore growth impetus To acquire market power To reduce dependence on existing or perhaps risky activities With the above mentioned benefits to MA activity, it should also be noted that takeovers most likely to succeed are those approached with a strategic focus, incorporating a detailed analysis of the objectives of the takeover, the possible alternatives and how the acquired company can be integrated in the new parent (Pike and Neale). 1.2 Trends in UK Merger Activity There has been an increasing trend of MA activity in the UK over the past few decades, with there being periods of high takeover activity followed by relatively slower periods as can be seen by the graph below. Figure 1.0 History of UK MA Activity Source: National Statistics, 2002 The highest peaks in takeovers are during the period 1984-1989. During this time, the average size of an acquisition had grown significantly from 9.64 million to 20.38 million. As per Sudarsanam (1995) the main reason for this was because the stock market in the UK, along with the harmony with the rest of the world stock markets experienced a strong bull phase which culminated in the October 1987 crash. Furthermore, the 1980s also experienced divestments on a large scale which meant companies would sell off divisions or subsidiaries to other firms of the divested parts in a management buyout. This increase in acquisitions and divestments had shown significant amount of corporate restructuring in the UK and thus led to new organizational innovations such as management buyouts and management buyins, as well as by financial innovations like high-leverage buyouts and mezzanine finance (Sudarsanam, 1995).As can be seen from the graph above, the UK MA market has experienced a relatively le aner period, which has continued till date. The main reasons that can be attributed to this are the various world catastrophes and the overall global economic slowdown. As per the office of National Statistics, the largest significant transaction recorded during the first quarter of 2008 was the acquisition by Imperial Tobacco Group Plc of Altadis S.A. for a press reported value of 9.3 billion. Another significant transaction was the acquisition by Carillion Plc of Alfred McAlpine Plc for a reported value of approximately 0.5 billion. For quarter one in 2008, the number of transactions reported for acquisitions in the UK by UK companies has been the lowest reported since quarter one 2003. Other recent major UK mergers acquisitions (2008) are as follows: Table 1.0 Recent Acquisitions in the UK by UK Companies Company Value in million Carillion Plc acquiring Alfred McAlpine Plc 554 Willmott Dixon Ltd acquiring Inspace Plc 133 easyJet Plc acquiring GB Airways Ltd 104 iimia MitonOptimal Plc acquiring Midas Capital Partners Ltd 100 Source: National Statistics, 2008 Table 2.0 Recent Acquisitions abroad by UK Companies Company Value in million Imperial Tobacco Group Plc acquiring Altadis S.A. 9339 Reckitt Benckiser Group Plc acquiring Adams Respiratory Therapeutics 1100 Scottish and Southern Energy Plc acquiring Airtricity Holdings Ltd 808 SABMiller Plc acquiring Koninklijke Grolsch N.V 606 Ineos Group Ltd acquiring Kerling AS 429 429 Standard Chartered Plc acquiring American Express Bank Ltd 413 Kesa Electricals Plc disposing of BUT SAS 389 Source: National Statistics, 2008 1.3 Definitions and Different Types of Mergers and Acquisitions Although the terms merger, acquisition and takeover are used interchangeably, technical differences do exist. A merger is when corporations come together to combine and share their resources to achieve a common set of objectives (Sudarsanam, 1995). The shareholders of the two combined corporations will continue to be joint owners. An acquisition is when one firm purchases the assets or shares of another firm however the shareholders of the acquired firm continue being owners of that firm. A takeover is the acquisition by one company of the share capital of another in exchange for cash, ordinary shares, loan stock or a combination of these (Pike and Neale). This distinction between the three terms is important in certain contexts however they are used by researchers and authors interchangeably. In the following dissertation, I too will use these three terms interchangeably. There are different types of mergers that exist to create value and are classified into three main categories: horizontal, vertical and conglomerate (Pike and Neale). Horizontal integration: this is when a company takes over the target firm from the same industry and at the same stage of the production process. Vertical integration: where the target is in the same industry as the acquirer however is operating at a different stage in the production process. This can be either close to the source of materials (backward integration) or close to the final customer (forward integration). Conglomerate integration: occurs when the target is in a business that is different to the acquirer. The reasons a firm may undergo a conglomerate merger is to reduce risk through diversification, opportunities for cost reduction and improving internal and external efficiencies. In order to understand whether mergers and acquisitions create or destroy shareholder value, it is important to appreciate and understand few critical aspects of the complex MA theory. The three areas in helping to answer this question with respects to the impact of shareholder value in my opinion are different modes of financing mergers and acquisitions, motives for MA activity and post-merger performance. Various researchers in the finance field have conducted a great amount of research on the above mentioned areas and this dissertation will help put into perspective mergers and acquisitions impact on shareholder value currently in the UK. CHAPTER 2: BACKGROUND OF STUDY Mergers and acquisitions are undertaken as a means of corporate growth and expansion but are also an alternative to growth through internal or organic capital investment. The immediate objective of an acquisition is self-evidently growth and expansion of the acquirers assets, sales and market share (Sudarsanam, 1995). Another objective of acquisitions would be to increase the growth of shareholders wealth aimed at creating a strong competitive advantage for the acquirer. In modern finance theory, shareholder wealth maximization is a strong rational for financing and investment decisions made by management. This leads to the question of wealth gain effects of mergers and acquisitions, specifically among large UK companies. The following chapter introduces various literature regarding wealth gain effects of mergers and acquisitions and highlights the various aspects of mergers and acquisitions which may have an effect on the shareholder value within large UK corporations. 2.1 Modes of Acquisition Financing There are various modes of financing a takeover which includes: cash (preferred method), issuing of ordinary shares and fixed interest securities (loan stock, convertibles, and preference shares). The way in which a merger and acquisition is financed has different benefits to the target shareholders and bidder shareholders. In addition, cash takeovers may be sufficiently different from non-cash acquisitions and failure to distinguish between them may lead to inappropriate generalizations (Carleton et al, 1983). As per Sudarsanam (1995), there are various ways a firm can bid an acquisition, which is shown in Table 3.0. Table 3.0 Bid Financing Bidder Offers Target shareholders receive Cash Cash in exchange for their shares Share Exchange A specified number of bidder s shares for each target share Cash underwritten share offer (vendor placing) Bidders shares, then sell them to a merchant bank for cash Loan stock A loan stock/debenture in exchange for their shares Convertible loan or preferred shares Loan stock or preferred shares convertible into ordinary shares at a predetermined conversion rate over a specified period Deferred payment Part of consideration after a specified period, subject to performance criteria Source: Sudarsanam (1995, p.177) In addition, a bidder making cash offer can finance it from one or more of the following sources (Sudarsanam, 1995): Internal operating cash flow A pre-bid rights issue A cash underwritten offer, e.g. vendor placing or vendor rights A pre-bid loan stock issue Bank Credit A cash offer has two advantages from the point of view to both the target and acquiring shareholders which includes (Pike Neale, 1999): The amount is certain; there is no exposure to the risk of adverse movement in share price during the course of the bid. The targeted shareholder is more easily able to adjust his or her portfolio than if he or she receives shares, which involve dealing costs when sold. Because no new shares are issued, there is no dilution of earnings or change in the balance of control of the bidder. In terms of shares being used as a medium of exchange again there are some advantages to both target as well as acquiring shareholders (Arnold, 2002) which are: For target shareholders use of shares helps avoid capital gains tax. Target shareholders maintain an interest in the combine entity thus helping preserve as well as increase shareholders value. Acquiring shareholders gain from the fact that there is no immediate cash outflow. Nickolaos Travlos (1987) study titled Corporate Takeover Bids, Method of Payment, and Bidding Firms Stock Returns was to examine the role of the method of payment in determining common stock returns of bidding firms at the announcement of takeover bids. The analysis in the study was to show the valuation effects on two common methods of payment which are common stock exchanges and cash offers. The results showed that bidding firms had normal returns in cash offers however experienced significant losses in pure stock exchange acquisitions. Other literature studied by Asquith and Mullins (1986), Kalay and Shimrat (1987), Masulis and Korwar (1986) and Mikkelson and Partch ( 1986) show that common stock issues have negative stock price when there are new common stock offerings. These results were supported by various other studies such as Henri Servaess (1991) study titled Tobins Q and gains from takeovers. Agrawal, Jaffe and Mandelkar (1992) found post-acquisition returns to be lower fo r share-financed acquisitions in comparison to cash-financed acquisitions. They further went on to prove that shareholders of acquiring firms suffered a statistically significant loss of about 10% over the five-year merger period. The bidding firms method of payment provides valuable insight to the market. If the bidding firms managers possess information about the intrinsic value of their firm, independent of the acquisition, which is not fully reflected in the pre-acquisition stock price, they will finance the acquisition in the most profitable way for the existing stockholders (Travlos, 1987). Myers and Majluf (1984) model states that management will prefer cash offerings if they believe their firm is under-valued however a common stock exchange offer will be preferred if they believe their firm is over-valued. In addition, market participants will strongly favor a cash offer as good news while the opposite holds true for a common stock exchange about the bidding firms true value. If such information is important in the market, then the bidding firms stock price change at the proposals announcement will reflect both the gain from the takeover (weighted by the probability that the takeover bid will go throug h) and the information effects (Nickolaos, 1987). Jensen and Ruback (1983) state that most tender offers are financed by cash however merger proposals are financed by the exchange of common stock therefore the information argument states that larger target residuals occur in tender offers rather than in mergers. In their study conducted, they determined that for mergers, the weighted abnormal target firm return is 16.3% over the month before announcement however for tender offers; the weighted target return is 30.9% over the two-month period surrounding the announcement dates. Cash is by far the most widely used form of payment in mergers and acquisitions. There are many reasons as to why there is an increased use of cash in financing mergers. One possible explanation for the increasing use of cash depends on market imperfections and/or agency considerations (Carleton et al, 1983). Another reason for why bidding firms use cash in financing mergers is the increase in the number of hostile mergers. Cash not only signals a high value for the target, but also preempts other firms from bidding (Martin, 1996). These findings were also found in the literature of Eckbo, Giammarino and Heinkel (1990) which include a role for mixed financings in which higher-valued bidders are more likely to use more cash to finance the acquisition. As can be seen from the literature above the mode of payment in an acquisition may be driven by various motives and can have various effects on the bidders and acquirers stock price. This can have a major impact on shareholder value during corporate acquisitions as well as value gain studies. A study by Loughran and Vijh (1997) formed an association between the mode of acquisition (merger and tender offer) and the method of payment (cash or stock). They studied this relationship in the context of wealth gains from acquisitions and concluded that the post-acquisition returns of acquirers are related to both the mode of acquisition as well as form of payment. This was also proved by various other researchers (mentioned above) thus making the method of payment during an acquisition all the more important. Reason being, post-acquisition returns are what tend to effect shareholder value the most therefore the knowledge and distinction of the various modes of financing an acquisition is ve ry relevant and essential. 2.2 Motives for Mergers Acquisitions A Dual Perspective Tender offers allow for an in-depth analysis of agency relationships since the best interests of the principal (target firm shareholders) and agent (target firm managers) are often in conflict. Managers of the target firm are often in conflict of interest between their fiduciary responsibilities to the shareholders and their own personal wealth. For this reason, tender offers allow for the analysis of agency conflicts between shareholders and management of the target firm. According to Sudarsanam (1995) there are two main perspectives for acquisition motives which are: Shareholder wealth maximization perspective Under the shareholder wealth maximization perspective, all firms decisions including acquisitions are made with the objective of maximizing the wealth of the shareholders of the firm. In mergers and acquisitions, management of the target firm will oppose bidding firms to takeover if they believe this action would not be in the best interest of its shareholders. Target managers that oppose a bid defend their reasoning by claiming that the bid price is not adequate enough. Managerial wealth perspective Under the managerial wealth perspective, target managers may face an uneasy choice between obligations to current shareholders and those who aspire to such a position (Walkling and Long, 1984). For many target managers, if they sense a possibility of a loss in compensation from the merger or acquisition, conflict of interest will then increase. If self interest is pursued by target managers, there is a possibility that a bad acquisition may occur and/or a loss of shareholder wealth. According to Sudarsanam (1995), managers may undertake acquisitions for the following reasons: To pursue growth in size of their firm, since their salary, prerequisites, status and power are a function of firm size. (Empire-building syndrome) In order to deploy their currently underused managerial skills. (self-fulfillment motive) To diversify risk and minimize costs of financial distress and bankruptcy. (job security motive) To avoid being taken over. (job security motive) The managerial wealth perspective motive is one of survival. Not only do managers tend to seek motivation from sustained growth but also seek job security. Managers unlike shareholders cannot diversify to spread their risks since they are tied to one company. If that company is acquired, managers have a high probability of losing their jobs. A study conducted by Firth (1991) tests to see if executive reward increases when an acquisition takes place. In a sample of 254 UK takeover offers during 1974-1980 found that the acquisition process leads to an increase in managerial remuneration, and that this is predicated on the increased size of the acquirer and concludes that the evidence is consistent with takeovers being motivated by managers wanting to maximize their own welfare'(Firth, 1991). Agency conflicts arise whenever differing incentives cause managers to take actions that benefit themselves but harm shareholders. In the context of acquisitions, agency conflicts may lead to a reduction in shareholder wealth if managers pursue expansion for nonprofit-maximizing reasons. According to past literature, large target shareholder wealth gains are experienced during the announcement of a takeover and large shareholder wealth losses occur when a takeover bid fails (Jensen and Ruback, 1983). This implies that target management interests are not always achieved by accepting bid offers. In addition, target managers may lose compensation and other perks if they are replaced after a successful bid offer. These findings are also confirmed by Walkling and Long (1984) and Martin and McConnell (1991), all of whom reported above-average managerial turnover after a successful takeover bid. The study findings show that in addition to lost compensation, managerial turnover may also be a ssociated with loss of status. Martin and McConnell (1991) further go on to say that the mergers and acquisitions market plays an important role in controlling the non-value maximizing behavior of managers of large corporations. As shown from the literature above, the shareholder wealth perspective and managerial wealth perspective may conflict with one another. With respects to mergers and acquisitions, the managerial motives and a mangers reaction to a takeover bid may have an impact on the shareholder wealth maximization criterion. The extent to which it would impact shareholder value will be decided by the amount of control managers have within the organization. 2.3 Post Merger Performance Debate (Targets and Bidders) There has been considerable interest in the post merger performance on shareholders returns in the target and bidder firms. Typical findings by researchers show three patterns: (1) target shareholders earn significantly positive abnormal returns from all acquisitions, (2) acquiring shareholders earn little or no abnormal returns from tender offers and (3) acquiring shareholders earn negative abnormal returns from mergers. Overall, the results of post merger performance have been mixed. According to Langetieg (1978) and Asquith (1983), their research concluded that acquired firms experience significantly negative abnormal returns over one to three years after the merger. In the research study conducted by Agrawal, Jaffe and Mandelker (1992) titled The Post-Merger Performance of Acquiring Firms: A Re-examination of an Anomaly found that stockholders of acquiring firms experience a statistically significant wealth loss of approximately 10% over five years after the merger completion date. Research conducted by Franks, Harris and Titman (1991) found that no significant underperformance of stockholders returns exist over a three year period after the acquisition. Franks et al concluded that the previous findings of poor performance post-acquisition were likely to be due to benchmark errors rather than inconsistencies with the Efficient Market Theory (EMH) or mis-pricing at the time of the takeover. Similar results that underperformance of stockholders returns do not exist over a three year period after acquisition is also concluded by Bradley and Jarrell (1988). A few studies have analyzed value gains during merger and acquisitions with respect to various classes of merging firms security holders. A study was carried out by Dennis and McConnell (1986) namely, Corporate Mergers and Security Returns and their results indicated mergers on average to be value creating activities for the acquired and the acquiring company individually. They found by other previous studies that on average common stockholders of acquiring firms earn positive returns but are usually not statistically significant. Their results also indicated that convertible preferred stockholders (of acquiring firm) received positive and statistically significant returns post-merger; however, non-convertible preferred stockholders received positive but not statistically significant returns post-merger. The combination of the above mentioned results lead to an overall increase in the value of the firm therefore presenting us with the reason as to why corporations go ahead with merge rs which do not earn statistically significant returns to common stockholders of the acquiring firms. Research results by Asquith and Kim (1982) also confirm what other investigators found for mergers: abnormal returns to the common stocks of acquired firms are positive and statistically significant; abnormal returns to the common stock of acquiring firms are not significantly different from zero. In the study Do Long-term Shareholders Benefit Corporate Acquisitions? by Loughran and Vijh (1997), found that post acquisition returns of acquirers stock are related to both the form of payment as well as the mode of acquisition. They concluded in the overall sample of 947 cases, acquirers that make merger bids earn, on average, 15.9 percent less than matching firms whereas acquirers that make tender offers earn 43.0 percent more than matching firms during a five-year period after acquisition. In addition, stock acquirers earned 24.2 percent less however cash acquirers earn 18.5 percent more with respects to matching firms. Furthermore, conclusions show that during a five year period following the acquisition, on average, firms t Effect of MA Strategy on Shareholder Value Effect of MA Strategy on Shareholder Value The aim of this project is to examine whether the decision of large UK companies looking to pursue a merger/acquisition strategy will affect shareholder value. The data analyzed in this study will determine if there is a positive or negative correlation in shareholder wealth when a merger/acquisition occurs. The research for this project will be conducted through the analysis of 40 different large UK companies that were merged or acquired by other UK based firms prior to 2002. The data will be obtained from the Bloomberg website. Further research and analysis on the topic will include information obtained from books, journals and reliable internet sources. To test the value of shareholder wealth when a merger/acquisition is pursued, different models will be used which includes Capital Asset Pricing Model, Efficient Capital Markets, Equilibrium Models, and Market Model (Event Studies and Abnormal Returns Methodology). The hypothesis that will be tested in this study is: H0 = If managers of large sized UK companies pursue a merger and acquisition strategy then shareholder wealth (value) will increase. H1 = If managers of large sized UK companies pursue a merger and acquisition strategy then shareholder wealth (value) will remain unchanged or will decrease. The first chapter will give a brief overview of mergers and acquisitions and introduce the reader to recent merger trends in the UK and different types of takeovers. The second chapter will be an in-depth analysis of past research studies which includes: examining different ways a company pays for a bid in a merger, exploring shareholder and managerial wealth perspectives, and analyzing long term post-merger performance of target and bidder firms. Chapter three presents the research methodology used in wealth gain studies and also states the methodology adopted for this dissertation. Chapter four analyzes and discusses the findings in context to wealth gain effects of mergers and acquisitions among the large UK companies chosen for this study. Chapter five concludes this research and highlights possible areas that may require further investigation. EXECUTIVE SUMMARY Mergers and acquisitions have become important events in todays rapidly changing business environment and have been the subject of many research studies. Reasons as to why companies may pursue a merger or acquisition strategy could be to reduce costs to achieve economies of scale or to reduce competition due to increased market power. Mergers and acquisitions have also been known to facilitate entry into new markets or industries and increase the level of effectiveness in a company by eliminating inefficient management. Mergers and acquisitions worldwide have tended to follow a pattern of waves, with there being periods of frantic takeover activity followed by relatively calmer periods. The main objective of financial theory is to maximize shareholder wealth therefore all decisions are taken with the aim of maximizing shareholder value. The purpose of this research is to re-examine the shareholder wealth gain criterion with regards to mergers and acquisitions within the United Kingdom. The objective of this study is to find out if shareholders of large UK companies benefit from the acquisition decisions made by the managers. Past research studies on post-acquisition performance of acquiring and target firms have mixed results. To determine if there is an increase or decrease in shareholder value from corporate takeovers, the Market Model and Event Study Methodology will be used in this study. The hypothesis developed in this study aims to support the argument that mergers and acquisitions are profitable events and lead to an increase in shareholder value. This study however concluded that merger and acquisitions among the large UK organizations chosen did not lead to an increase of shareholder value for both target and bidder firms. These results might not be entirely accurate due to various reasons such as size effects and the firms chosen in this study are from different industries. Other factors such as acquisition financing and acquisition motives also may have an effect on shareholder value however the testing of these factors is outside the scope of the following study. CHAPTER 1: OVERVIEW OF MERGERS AND ACQUISTIONS The following chapter briefly examines the benefits that a merger is expected to generate for both the target firm and the acquiring firm. The historical pattern of takeover activity in the UK from 1964-1992 is discussed to show merger and acquisition (MA) trends and recent MA activity abroad and within the UK will also be highlighted among large UK companies in 2008. In addition, the definition of mergers and acquisitions is provided and the second part of chapter one introduces the reader to different types of mergers used to create value for an organization. 1.1 Benefits to Mergers and Acquisitions Activity The main objective for an acquiring firm is to grow and expand its assets, sales and market shares. Other specific reasons for entering into a merger bid are reflected in the benefits that are expected to be generated which include: Exploiting scale economies Obtain synergy Enter into new markets To restore growth impetus To acquire market power To reduce dependence on existing or perhaps risky activities With the above mentioned benefits to MA activity, it should also be noted that takeovers most likely to succeed are those approached with a strategic focus, incorporating a detailed analysis of the objectives of the takeover, the possible alternatives and how the acquired company can be integrated in the new parent (Pike and Neale). 1.2 Trends in UK Merger Activity There has been an increasing trend of MA activity in the UK over the past few decades, with there being periods of high takeover activity followed by relatively slower periods as can be seen by the graph below. Figure 1.0 History of UK MA Activity Source: National Statistics, 2002 The highest peaks in takeovers are during the period 1984-1989. During this time, the average size of an acquisition had grown significantly from 9.64 million to 20.38 million. As per Sudarsanam (1995) the main reason for this was because the stock market in the UK, along with the harmony with the rest of the world stock markets experienced a strong bull phase which culminated in the October 1987 crash. Furthermore, the 1980s also experienced divestments on a large scale which meant companies would sell off divisions or subsidiaries to other firms of the divested parts in a management buyout. This increase in acquisitions and divestments had shown significant amount of corporate restructuring in the UK and thus led to new organizational innovations such as management buyouts and management buyins, as well as by financial innovations like high-leverage buyouts and mezzanine finance (Sudarsanam, 1995).As can be seen from the graph above, the UK MA market has experienced a relatively le aner period, which has continued till date. The main reasons that can be attributed to this are the various world catastrophes and the overall global economic slowdown. As per the office of National Statistics, the largest significant transaction recorded during the first quarter of 2008 was the acquisition by Imperial Tobacco Group Plc of Altadis S.A. for a press reported value of 9.3 billion. Another significant transaction was the acquisition by Carillion Plc of Alfred McAlpine Plc for a reported value of approximately 0.5 billion. For quarter one in 2008, the number of transactions reported for acquisitions in the UK by UK companies has been the lowest reported since quarter one 2003. Other recent major UK mergers acquisitions (2008) are as follows: Table 1.0 Recent Acquisitions in the UK by UK Companies Company Value in million Carillion Plc acquiring Alfred McAlpine Plc 554 Willmott Dixon Ltd acquiring Inspace Plc 133 easyJet Plc acquiring GB Airways Ltd 104 iimia MitonOptimal Plc acquiring Midas Capital Partners Ltd 100 Source: National Statistics, 2008 Table 2.0 Recent Acquisitions abroad by UK Companies Company Value in million Imperial Tobacco Group Plc acquiring Altadis S.A. 9339 Reckitt Benckiser Group Plc acquiring Adams Respiratory Therapeutics 1100 Scottish and Southern Energy Plc acquiring Airtricity Holdings Ltd 808 SABMiller Plc acquiring Koninklijke Grolsch N.V 606 Ineos Group Ltd acquiring Kerling AS 429 429 Standard Chartered Plc acquiring American Express Bank Ltd 413 Kesa Electricals Plc disposing of BUT SAS 389 Source: National Statistics, 2008 1.3 Definitions and Different Types of Mergers and Acquisitions Although the terms merger, acquisition and takeover are used interchangeably, technical differences do exist. A merger is when corporations come together to combine and share their resources to achieve a common set of objectives (Sudarsanam, 1995). The shareholders of the two combined corporations will continue to be joint owners. An acquisition is when one firm purchases the assets or shares of another firm however the shareholders of the acquired firm continue being owners of that firm. A takeover is the acquisition by one company of the share capital of another in exchange for cash, ordinary shares, loan stock or a combination of these (Pike and Neale). This distinction between the three terms is important in certain contexts however they are used by researchers and authors interchangeably. In the following dissertation, I too will use these three terms interchangeably. There are different types of mergers that exist to create value and are classified into three main categories: horizontal, vertical and conglomerate (Pike and Neale). Horizontal integration: this is when a company takes over the target firm from the same industry and at the same stage of the production process. Vertical integration: where the target is in the same industry as the acquirer however is operating at a different stage in the production process. This can be either close to the source of materials (backward integration) or close to the final customer (forward integration). Conglomerate integration: occurs when the target is in a business that is different to the acquirer. The reasons a firm may undergo a conglomerate merger is to reduce risk through diversification, opportunities for cost reduction and improving internal and external efficiencies. In order to understand whether mergers and acquisitions create or destroy shareholder value, it is important to appreciate and understand few critical aspects of the complex MA theory. The three areas in helping to answer this question with respects to the impact of shareholder value in my opinion are different modes of financing mergers and acquisitions, motives for MA activity and post-merger performance. Various researchers in the finance field have conducted a great amount of research on the above mentioned areas and this dissertation will help put into perspective mergers and acquisitions impact on shareholder value currently in the UK. CHAPTER 2: BACKGROUND OF STUDY Mergers and acquisitions are undertaken as a means of corporate growth and expansion but are also an alternative to growth through internal or organic capital investment. The immediate objective of an acquisition is self-evidently growth and expansion of the acquirers assets, sales and market share (Sudarsanam, 1995). Another objective of acquisitions would be to increase the growth of shareholders wealth aimed at creating a strong competitive advantage for the acquirer. In modern finance theory, shareholder wealth maximization is a strong rational for financing and investment decisions made by management. This leads to the question of wealth gain effects of mergers and acquisitions, specifically among large UK companies. The following chapter introduces various literature regarding wealth gain effects of mergers and acquisitions and highlights the various aspects of mergers and acquisitions which may have an effect on the shareholder value within large UK corporations. 2.1 Modes of Acquisition Financing There are various modes of financing a takeover which includes: cash (preferred method), issuing of ordinary shares and fixed interest securities (loan stock, convertibles, and preference shares). The way in which a merger and acquisition is financed has different benefits to the target shareholders and bidder shareholders. In addition, cash takeovers may be sufficiently different from non-cash acquisitions and failure to distinguish between them may lead to inappropriate generalizations (Carleton et al, 1983). As per Sudarsanam (1995), there are various ways a firm can bid an acquisition, which is shown in Table 3.0. Table 3.0 Bid Financing Bidder Offers Target shareholders receive Cash Cash in exchange for their shares Share Exchange A specified number of bidder s shares for each target share Cash underwritten share offer (vendor placing) Bidders shares, then sell them to a merchant bank for cash Loan stock A loan stock/debenture in exchange for their shares Convertible loan or preferred shares Loan stock or preferred shares convertible into ordinary shares at a predetermined conversion rate over a specified period Deferred payment Part of consideration after a specified period, subject to performance criteria Source: Sudarsanam (1995, p.177) In addition, a bidder making cash offer can finance it from one or more of the following sources (Sudarsanam, 1995): Internal operating cash flow A pre-bid rights issue A cash underwritten offer, e.g. vendor placing or vendor rights A pre-bid loan stock issue Bank Credit A cash offer has two advantages from the point of view to both the target and acquiring shareholders which includes (Pike Neale, 1999): The amount is certain; there is no exposure to the risk of adverse movement in share price during the course of the bid. The targeted shareholder is more easily able to adjust his or her portfolio than if he or she receives shares, which involve dealing costs when sold. Because no new shares are issued, there is no dilution of earnings or change in the balance of control of the bidder. In terms of shares being used as a medium of exchange again there are some advantages to both target as well as acquiring shareholders (Arnold, 2002) which are: For target shareholders use of shares helps avoid capital gains tax. Target shareholders maintain an interest in the combine entity thus helping preserve as well as increase shareholders value. Acquiring shareholders gain from the fact that there is no immediate cash outflow. Nickolaos Travlos (1987) study titled Corporate Takeover Bids, Method of Payment, and Bidding Firms Stock Returns was to examine the role of the method of payment in determining common stock returns of bidding firms at the announcement of takeover bids. The analysis in the study was to show the valuation effects on two common methods of payment which are common stock exchanges and cash offers. The results showed that bidding firms had normal returns in cash offers however experienced significant losses in pure stock exchange acquisitions. Other literature studied by Asquith and Mullins (1986), Kalay and Shimrat (1987), Masulis and Korwar (1986) and Mikkelson and Partch ( 1986) show that common stock issues have negative stock price when there are new common stock offerings. These results were supported by various other studies such as Henri Servaess (1991) study titled Tobins Q and gains from takeovers. Agrawal, Jaffe and Mandelkar (1992) found post-acquisition returns to be lower fo r share-financed acquisitions in comparison to cash-financed acquisitions. They further went on to prove that shareholders of acquiring firms suffered a statistically significant loss of about 10% over the five-year merger period. The bidding firms method of payment provides valuable insight to the market. If the bidding firms managers possess information about the intrinsic value of their firm, independent of the acquisition, which is not fully reflected in the pre-acquisition stock price, they will finance the acquisition in the most profitable way for the existing stockholders (Travlos, 1987). Myers and Majluf (1984) model states that management will prefer cash offerings if they believe their firm is under-valued however a common stock exchange offer will be preferred if they believe their firm is over-valued. In addition, market participants will strongly favor a cash offer as good news while the opposite holds true for a common stock exchange about the bidding firms true value. If such information is important in the market, then the bidding firms stock price change at the proposals announcement will reflect both the gain from the takeover (weighted by the probability that the takeover bid will go throug h) and the information effects (Nickolaos, 1987). Jensen and Ruback (1983) state that most tender offers are financed by cash however merger proposals are financed by the exchange of common stock therefore the information argument states that larger target residuals occur in tender offers rather than in mergers. In their study conducted, they determined that for mergers, the weighted abnormal target firm return is 16.3% over the month before announcement however for tender offers; the weighted target return is 30.9% over the two-month period surrounding the announcement dates. Cash is by far the most widely used form of payment in mergers and acquisitions. There are many reasons as to why there is an increased use of cash in financing mergers. One possible explanation for the increasing use of cash depends on market imperfections and/or agency considerations (Carleton et al, 1983). Another reason for why bidding firms use cash in financing mergers is the increase in the number of hostile mergers. Cash not only signals a high value for the target, but also preempts other firms from bidding (Martin, 1996). These findings were also found in the literature of Eckbo, Giammarino and Heinkel (1990) which include a role for mixed financings in which higher-valued bidders are more likely to use more cash to finance the acquisition. As can be seen from the literature above the mode of payment in an acquisition may be driven by various motives and can have various effects on the bidders and acquirers stock price. This can have a major impact on shareholder value during corporate acquisitions as well as value gain studies. A study by Loughran and Vijh (1997) formed an association between the mode of acquisition (merger and tender offer) and the method of payment (cash or stock). They studied this relationship in the context of wealth gains from acquisitions and concluded that the post-acquisition returns of acquirers are related to both the mode of acquisition as well as form of payment. This was also proved by various other researchers (mentioned above) thus making the method of payment during an acquisition all the more important. Reason being, post-acquisition returns are what tend to effect shareholder value the most therefore the knowledge and distinction of the various modes of financing an acquisition is ve ry relevant and essential. 2.2 Motives for Mergers Acquisitions A Dual Perspective Tender offers allow for an in-depth analysis of agency relationships since the best interests of the principal (target firm shareholders) and agent (target firm managers) are often in conflict. Managers of the target firm are often in conflict of interest between their fiduciary responsibilities to the shareholders and their own personal wealth. For this reason, tender offers allow for the analysis of agency conflicts between shareholders and management of the target firm. According to Sudarsanam (1995) there are two main perspectives for acquisition motives which are: Shareholder wealth maximization perspective Under the shareholder wealth maximization perspective, all firms decisions including acquisitions are made with the objective of maximizing the wealth of the shareholders of the firm. In mergers and acquisitions, management of the target firm will oppose bidding firms to takeover if they believe this action would not be in the best interest of its shareholders. Target managers that oppose a bid defend their reasoning by claiming that the bid price is not adequate enough. Managerial wealth perspective Under the managerial wealth perspective, target managers may face an uneasy choice between obligations to current shareholders and those who aspire to such a position (Walkling and Long, 1984). For many target managers, if they sense a possibility of a loss in compensation from the merger or acquisition, conflict of interest will then increase. If self interest is pursued by target managers, there is a possibility that a bad acquisition may occur and/or a loss of shareholder wealth. According to Sudarsanam (1995), managers may undertake acquisitions for the following reasons: To pursue growth in size of their firm, since their salary, prerequisites, status and power are a function of firm size. (Empire-building syndrome) In order to deploy their currently underused managerial skills. (self-fulfillment motive) To diversify risk and minimize costs of financial distress and bankruptcy. (job security motive) To avoid being taken over. (job security motive) The managerial wealth perspective motive is one of survival. Not only do managers tend to seek motivation from sustained growth but also seek job security. Managers unlike shareholders cannot diversify to spread their risks since they are tied to one company. If that company is acquired, managers have a high probability of losing their jobs. A study conducted by Firth (1991) tests to see if executive reward increases when an acquisition takes place. In a sample of 254 UK takeover offers during 1974-1980 found that the acquisition process leads to an increase in managerial remuneration, and that this is predicated on the increased size of the acquirer and concludes that the evidence is consistent with takeovers being motivated by managers wanting to maximize their own welfare'(Firth, 1991). Agency conflicts arise whenever differing incentives cause managers to take actions that benefit themselves but harm shareholders. In the context of acquisitions, agency conflicts may lead to a reduction in shareholder wealth if managers pursue expansion for nonprofit-maximizing reasons. According to past literature, large target shareholder wealth gains are experienced during the announcement of a takeover and large shareholder wealth losses occur when a takeover bid fails (Jensen and Ruback, 1983). This implies that target management interests are not always achieved by accepting bid offers. In addition, target managers may lose compensation and other perks if they are replaced after a successful bid offer. These findings are also confirmed by Walkling and Long (1984) and Martin and McConnell (1991), all of whom reported above-average managerial turnover after a successful takeover bid. The study findings show that in addition to lost compensation, managerial turnover may also be a ssociated with loss of status. Martin and McConnell (1991) further go on to say that the mergers and acquisitions market plays an important role in controlling the non-value maximizing behavior of managers of large corporations. As shown from the literature above, the shareholder wealth perspective and managerial wealth perspective may conflict with one another. With respects to mergers and acquisitions, the managerial motives and a mangers reaction to a takeover bid may have an impact on the shareholder wealth maximization criterion. The extent to which it would impact shareholder value will be decided by the amount of control managers have within the organization. 2.3 Post Merger Performance Debate (Targets and Bidders) There has been considerable interest in the post merger performance on shareholders returns in the target and bidder firms. Typical findings by researchers show three patterns: (1) target shareholders earn significantly positive abnormal returns from all acquisitions, (2) acquiring shareholders earn little or no abnormal returns from tender offers and (3) acquiring shareholders earn negative abnormal returns from mergers. Overall, the results of post merger performance have been mixed. According to Langetieg (1978) and Asquith (1983), their research concluded that acquired firms experience significantly negative abnormal returns over one to three years after the merger. In the research study conducted by Agrawal, Jaffe and Mandelker (1992) titled The Post-Merger Performance of Acquiring Firms: A Re-examination of an Anomaly found that stockholders of acquiring firms experience a statistically significant wealth loss of approximately 10% over five years after the merger completion date. Research conducted by Franks, Harris and Titman (1991) found that no significant underperformance of stockholders returns exist over a three year period after the acquisition. Franks et al concluded that the previous findings of poor performance post-acquisition were likely to be due to benchmark errors rather than inconsistencies with the Efficient Market Theory (EMH) or mis-pricing at the time of the takeover. Similar results that underperformance of stockholders returns do not exist over a three year period after acquisition is also concluded by Bradley and Jarrell (1988). A few studies have analyzed value gains during merger and acquisitions with respect to various classes of merging firms security holders. A study was carried out by Dennis and McConnell (1986) namely, Corporate Mergers and Security Returns and their results indicated mergers on average to be value creating activities for the acquired and the acquiring company individually. They found by other previous studies that on average common stockholders of acquiring firms earn positive returns but are usually not statistically significant. Their results also indicated that convertible preferred stockholders (of acquiring firm) received positive and statistically significant returns post-merger; however, non-convertible preferred stockholders received positive but not statistically significant returns post-merger. The combination of the above mentioned results lead to an overall increase in the value of the firm therefore presenting us with the reason as to why corporations go ahead with merge rs which do not earn statistically significant returns to common stockholders of the acquiring firms. Research results by Asquith and Kim (1982) also confirm what other investigators found for mergers: abnormal returns to the common stocks of acquired firms are positive and statistically significant; abnormal returns to the common stock of acquiring firms are not significantly different from zero. In the study Do Long-term Shareholders Benefit Corporate Acquisitions? by Loughran and Vijh (1997), found that post acquisition returns of acquirers stock are related to both the form of payment as well as the mode of acquisition. They concluded in the overall sample of 947 cases, acquirers that make merger bids earn, on average, 15.9 percent less than matching firms whereas acquirers that make tender offers earn 43.0 percent more than matching firms during a five-year period after acquisition. In addition, stock acquirers earned 24.2 percent less however cash acquirers earn 18.5 percent more with respects to matching firms. Furthermore, conclusions show that during a five year period following the acquisition, on average, firms t

Physics of Aristotle Essay examples -- physics aristotle

The great Greek thinker Aristotle was born in 384 B.C. in Stagirus, a city in ancient Macedonia in northern Greece. At the age of eighteen Aristotle went to Athens to begin his studies at Plato's Academy. He stayed and studied at the Academy for nineteen years and in that time became both a teacher and an independent researcher. After Plato's death in 347 B.C. Aristotle spent twelve years traveling and living in various places around the Aegean Sea. It was during this time that Aristotle was asked by Philip of Macedon to be a private tutor to his son, Alexander. Aristotle privately taught Alexander for three years before he returned to Athens after Philip gained control of the Greek capital. During this period back in Athens Aristotle founded his own school, the Lyceum, where he taught for twelve years. In 323 B.C. Alexander the Great died and the Macedonians lost control of Athens. Aristotle was forced to leave and he died one year later in Chalcis, north of Athens, at the age of 6 2. Aristotle is regarded by many as one of the most important thinkers of the ancient era. Although many of his theories regarding the physics of the natural world were later disproved by Galileo, Aristotle nevertheless offered the world at that time a relevant and consistent explanation of physics of impressive breadth and explanatory ability. Many of his theories endured for up to 1200 years, and helped to form the basis of the midieval christian perspective of the natural world. Much of his physics, when combined with Ptolemy's mathematical model of planetary motions, was used by midieval thinkers to describe the behavior of the cosmos. Aristotle's book The Physics, was in existence by about 350 B.C. This book is mainly concerned with change a... ... 1609, when Galileo destroyed Aristotle's mechanical model of the universe, was his authority on scientific theory truly undermined. So strong was Aristotle's grip on the science of the time, that Galileo was subsequently tried by the church as a heretic for disagreeing with his theories. It is a generally accepted fact that Aristotle's physics and astronomy were the weakest of his areas of study. He made discoveries and developed theories in biology, ethics, and drama that still hold a great deal of importance in those fields today. However, many of his theories and hypotheses were not disproved unitl the nineteenth century and his original concept of a uniform and consistant flow of time was accepted by Newton and still has its place in physics today. We really cannot discount the scientific contributions of a man whose ideas have survived for over 2000 years.

The Place of Strategic Dialogue in Collaborative Learning :: Peer Tutoring Tutor Tutors Essays

The Place of Strategic Dialogue in Collaborative Learning The tutorial interaction in writing centers provides beginning writers with an essential element not found in other types of student-helper interaction. Unlike the usual colloquium that occurs in most classrooms, tutoring offers a one-on-one setting whereby a student can directly consult with, discuss, and turn to an experienced peer for help with as many steps of the writing process as possible. This unique setting offers a chance for tutors to address students’ individual needs using strategic dialogue. Kenneth A. Bruffee talks about the important facets peer-to-peer dialogue brings to the tutorial setting. In his essay, Peer Tutoring and the ‘Conversation of Mankind,’ he discusses conversation and its place within the context of â€Å"collaborative learning.† Bruffee argues that â€Å"thought and writing are special artifacts grounded in conversation. As such, both are fostered by teaching that emphasizes conversational exchange among peers† (Intro, 3). He believes that thought originates in conversation. In general, conversation is a social artifact that can be internalized to encourage thought. Bruffee values peer tutoring so much because, as he said, it "provides a social context in which students can experience and practice the kinds of conversation that academics most value† (7). The dialogue that takes place between tutor and student fosters this kind of thought-provoking conversation. The interaction is one of a kind because it provides a uni que setting whereby â€Å"status equals, or peers† (Bruffee, 8) can discuss matters that are closely at the heart of the writing process. Emily Meyer and Louise Z. Smith, writers of The Practical Tutor, agree with Bruffee on the special contribution peer-to-peer tutoring grants to the process of writing. In their chapter called ‘Engaging in Dialogue,’ Meyer and Smith support Bruffee when they say, "the tutorial conference is an ideal format for such stimulation because it is truly dialogical† (28). This aspect is unique in two ways in that first, it provides the necessary one-on-one component that beginning writers don’t get when they sit in class among several other inexperienced writers. Second and more important, the dialogue that takes place between tutor and tutee stimulates thought that is originated in conversation. According to Bruffee, â€Å"The kind of conversation peer tutors engage in with their tutees can be emotionally involved, intellectually and substantively focused, and personally disinterested" (7). Conversation, in this sense, becomes an ideal way by which inexperienced wr iters can let out their thoughts, opinions, and feelings on a given topic.

Explication of Adrienne Rich’s “Aunt Jennifer’s Tigers” Essay

Adrienne Rich did a wonderful job portraying the trials of abused and battered women in this poem. These trials could possibly be explained by Rich being the niece of Aunt Jennifer; therefore, personal feelings are exposed throughout the piece. The speaker speaks in an admiring, sincere, tone and her sympathy is apparent because she herself is a female. Rich’s poem, â€Å"Aunt Jennifer’s Tigers† is about the trials of an older woman in distress because her marriage is in trouble, and she is too afraid to leave her husband. The most apparent point in the poem is the ongoing contrast between the fictional tigers and Aunt Jennifer. The tigers represent a powerful character created by Aunt Jennifer through her needlework, which she uses as an escape. While the tigers move with certainty, â€Å"Aunt Jennifer’s tigers prance across a screen† (1). Aunt is nervous and afraid: â€Å"Aunt Jennifer’s fingers fluttering through her wool† (5). Webster’s dictionary defines flutter as a condition of nervous agitation. Aunt is agitated and in a hurry to create the image of the tigers to get her mind off of her husband. â€Å"Bright topaz denizens of a world of green† (2) creates a feeling of greenery which represents the living surroundings of the jungle where a tiger would be found. Line two shows the reader how Aunt describes the tiger’s home, while at the same time Aunt is in her home. The contrast is shown between Aunt Jennifer and the tigers through the attitude of the characters. Aunt Jennifer creates images of tigers because it gives a sense of protection against Aunt’s husband and all men in her eyes. â€Å"They do not fear the men beneath the trees† (3), speaking of the tigers for their brave stand against the men, whereas the Aunt is scared of the men: â€Å"The massive weight of Uncle’s wedding band / Sits heavily upon Aunt Jennifer’s hand† (7-8). The ring is made of metal and is not physically heavy, for it symbolizes her heavy hardships she has had with her husband. She fears the men, but she feels better knowing the tigers are there to watch over her. The hand with the ring is also holding an â€Å"ivory needle† (6), which she uses to stitch the tigers. Ivory is thought to be pure and heavenly, and she is using the needle to knit an image that represents safety. The tigers and the ivory are being used as diversionary tactics to cancel out thoughts of Aunt Jennifer’s  husband. The poem in itself contains many literary devices that allow the reader to understand better what the author is trying to say. Alliteration is apparent throughout the entire poem. â€Å"Sleek chivalric certainty† (4) indicates the tigers are confident with themselves and fear nothing or nobody. â€Å"Aunt Jennifer’s fingers fluttering† (6) is an example of alliteration that shows the reader how seriously she wants to finish the artwork. â€Å"Prancing, proud† (12) gives the reader a sense of the power of the tigers and how much of a threat they can be. The repetition of the consonants in line six and line twelve emphasis how strong Rich wanted those lines to be heard. As the poem rolls on, the reader notices a rhyme scheme that is very simple and easy to follow. â€Å"Across a screen† (1) and â€Å"world of green† (2) are examples of the rhyme in this poem. The rhyme scheme continues AABBCCDDEEFF. â€Å"Tree† (3) and â€Å"certaintyâ €  (4) are examples approximate rhyme. Imagery is used to create the tigers, and symbolism created a character that Aunt Jennifer could never be. The third stanza speaks about what will happen when Aunt Jennifer passes away. â€Å"When Aunt is dead, her terrified hands will lie/ Still ringed with ordeals she was mastered by† (9-10): Aunt Jennifer will lie in her deathbed wearing the ring that tainted her life. Until that day, she will keep finding things to get her mind off of her husband. â€Å"The tigers in the panel that she made/ Will go on prancing, proud and unafraid† (11-12): even when Aunt dies, the tigers she created will continue to conquer the men and will go on protecting all women who struggle the way she did. This twelve line poem is a representation of all women who are treated with disrespect. Adrienne Rich uses many different devices to draw out her poem just as she wants it. The vivid word choice used in every line is symbolic throughout the entire poem. Line by line, Rich explains how a certain woman uses her hobby to create a character used to block out her trials with her husband. The story contrasts the tigers with the men and how anything can be defeated.