Haveloche corporation free essay sample

Haveloche Corporation is a research and development company, which translates into sporadic cash flows over time. There are times when genius ideas bring in lots of cash flow for the company. However, there are also times where those genius ideas are shelved because no one has an interest in that patent. The ever changing cash flows prove to be difficult for decision making, especially when it comes to whether the company should give back to its investors or not. Haveloche is constantly faced with the predicament of deciding what dividend policy is best for the organization and the investors. The company’s CEO listed the stock prices and dividends for us to look at. There are 3 theories of investor preference for dividend versus capital gains: (1) Dividend Irrelevance Theory or Modigliani Miller (2) â€Å"Bird-in-the-hand† Theory (3) Tax Preference Theory. According to Modigliani Miller (MM), the dividend policy has not effect on the stock price of the firm or the cost of capital. We will write a custom essay sample on Haveloche corporation or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page This theory states that investors reinvest the dividends back into the firm and the firm’s value is only based on the income produced from its assets, and not the dividends and retained earnings. According to the second theory, the â€Å"Bird-in-the-hand† theory, dividends are known and stable and capital gains are unknown and uncertain. The dividend is less risky than capital gains. The risk of the firm’s cash flows in the long run is determined by the dividend payout policy according to this theory. According to the third theory, Tax Preference Theory, capital gains are preferred over dividends. Due to time value of money, a dollar paid in the future on taxes has a lower cost than a dollar paid on taxes in the present. Capital gains typically have better tax advantages than dividends, which is why some investors prefer to invest in companies that minimize dividends. Based on the scatter plot, I would have to say that Haveloche has chosen a variety of these different theories over the years since they have been paying dividends. When the company needed to reinvest the money back into the company, they dividend was lowered. When the company had plenty of extra cash lying around, the dividend payout increased. Haveloche has been paying a dividend since its initial IPO, but those dividends vary from year to year. One could argue that the dividend is guaranteed each year based on history, but the investor does not have a clue as to how what that dividend will be based off. Moreover, if you take a look at the stock price from year to year, it widely fluctuate up and down. Investors in this do not know from year to year if the company’s patents are going to strike it rich or if they are just going to be shelved. It being an RD company, it is a risky company, which investors know prior to taking the plunge with investing their hard earned money. Haveloches business is based on the unknown of whether the patents will be useful to electronics companies. The company may come up with something that it deems the next big thing, but it may not find a company that wants to use it. Investors in Haveloche are not in it specifically for the dividends. Investors are hoping for heavy payouts if Haveloche makes it big. The company needs to do more research and look into which dividend policies are working for the other small RD companies that work on patent projects. With more information and results, Haveloche would be able to make a more intelligent business decision about which dividend policy it should choose.

The effects of the Black Death in Europe essays

The effects of the Black Death in Europe essays During the 14th century, one of the most deeply stressing moments of the humanity happened in Europe. Nobody was prepared to face this huge disease, the Black Death. Every part of the European society was affected by this problem. The culture, the education, the economy, the religion and the simple life were turned upside down. The first reports that talk about the Black Death came from Italy. This powerful killing machine arrived by boat and was dispersed in other countries in a short period of time. The huge cities were more affected because they received directly the things brought by the infected navies. Also, the rats were carrying the fleas, which were contaminated, and brought the plague in Europe. Rats were carrying the fleas everywhere in cities. Also, during this time, it wasnt really clean in cities (during this time, people had no garbage, the only one that they have was the street) and they werent used to take showers and to be hygienic. Because of that, they were more favourable to contract diseases like the diarrhoea which had for effect to weaken them. Moreover, people were walking with the rats in the street and often they were bitted by them. If people were bitted by the fleas and the rats they became sick really rapidly and the majority of them died before five days. Also, one of the reasons why the Black Death was so devastating is because the Europeans nations werent in good shape. They were in the middle of a war and a lot of countries had already lost thousands of men. Because of this war, the villagers hadnt a lot of food in their plate. People were dying of this famine. Also, the people who werent rich had no other choice than to stay there. Another reason why the disease was spilled really fast is because the rich families, who had the means to move, often brought the plague with them even if they thought they were healthy. One of the reasons why the plague didnt end...