Financial Management Essay Example | Topics and Well Written Essays - 2500 words - 1

Financial Management - Essay Example The financing policy should be designed in a way that it maximizes the wealth of the shareholders while minimizing the overall cost of capital. Equity The equity shares are also referred to as ‘ordinary shares’. The equity shareholders also referred to as ‘ordinary shareholders’ who share the risk as well as reward associated with the corporate ownership. Unlike preference shares the equity shares do not carry any preference with respect to redemption and income. As the equity shareholders are exposed to greater risks and do not enjoy any specified preferential rights, the equity holders are entitled to a higher share in the business profits in the form of high dividends as compared to the payments made to the preferential shareholders. However, the declaration of dividend is at the discretion of the directors’. Types of equity shares The equity shares are of the following types- With voting rights Without voting rights With differential voting rights with respect to dividend payments or voting, as per any prescribed rules and conditions. The shares with the feature of â€Å"differential voting rights† cannot be more than 25% of the company’s Total Issued Share Capital. The corporate can raise additional funds, without diluting the ownership interest of the existing shareholders through the issue of â€Å"non-voting equity shares†. ... In the event of dividend failure, the non-voting class of shares will automatically get pro-rata voting rights until there is resumption in dividend payments (Guruswamy, p.51). Merits & demerits of equity An important benefit arising from the issue of equity is that it does not create any fixed obligations. The dividends paid on the equity shares are at the discretion of the management and therefore it does not create any legal bindings. In the initial stages, the company may not be in a position to withstand fixed contractual obligations. For this reason, the equity issue is the most preferred route of issuing funds as it does not create any financial burden on the company. However, a high level of equity can dilute the ‘ownership’. It is argued that the equity shareholders interfere in the business affairs thereby delaying crucial business decisions. Moreover, the managers have to seek approval of the majority shareholders at the time of making important business decis ions. This leads to excessive delays. Benefits & Risks of voting & non-voting equity The main advantage of non-voting shares is that it overcomes the problem of dilution of ownership as these classes of shares do not have any voting rights. This class of shares tackles the problems related with other class of shares such as the ordinary shares or voting shares. The latter class of shareholders seeks high returns on their invested funds both in the form of high dividends and capital appreciation. Due to this, the non-voting shares are said to have a popular and ready market. In fact, this class of shares is similar to preference shares in terms of absence of voting rights but unlike preference

Response to Nelson Mandela's Freedom Speech Coursework

Response to Nelson Mandela's Freedom Speech - Coursework Example I have cherished the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunity. It is an ideal which I hope to live for and to achieve. But if needs be, it is an ideal for which I am prepared to die†. For years Mandela from banned from gatherings and was kept under strict police surveillance just because he had the courage and strength to stand up to racism. Despite being the savior of South Africa, Mandela in his address after being released from prison, regards himself a servant of his people. Mandela begins his freedom address by thanking the people around the world who have tirelessly supported the campaign for his release from jail. Mandela extends his heartfelt gratitude to everyone who has supported his ideas and has molded their lives in accordance with them. Mandela’s gratitude reflects his underlying greatness and dignity by thanking the people who have helped raise him to the pedestal he deserves. Nelson Ma ndela has always been a man of his words; often he has been observed saying â€Å"I will continue fighting until the end of my days†. The tiresome days and long dark nights at the Robben Island prison did not halt his struggle against white and black domination. For decades in prison, Mandela was deprived of simple pleasures of life. His daughter Zinzi grew up without a father but even in these grave circumstances, Mandela did not give up the struggle for his nation and his people. Instead Mandela utilized the debilitating environment of prison to reinforce his already entrenched habits. His resistance and steadfastness accelerated his popularity and he soon became the most significant and influential black leader in the history of South Africa. It is so unfortunate that our Country was thrown into an economical crisis and the lives of our people so brutally destroyed. We have to follow Nelson Mandela’s footsteps in order to be strong enough to guide our paths to enlig htenment. Madiba dedicated his life for freeing our lives from racism and it is now our duty to eliminate any future prospect of white oppression. This is only possible if we educate ourselves which is the best armor we can possibly have. We are in dire need of educating our children, for education is the wealth of nature. In his address, Mandela conveys to the nation that the only way to end exploitation and oppression is through the promotion of combined strength of the working class. Mandela points out that the strength of the working class is one of the most potent reasons for the success of the anti-apartheid movement. Through his address, Mandela also revives in the minds of his people, the struggle of great heroes like Hintsa and Sekhukune. Mandela pays his gratitude to the young individuals of his nation by referring to them as his young lions. He rightly points out that the problems plaguing the integrity of South Africa can only be abolished through endless efforts of the youth of the nation. He also extends his gratitude to mothers and sisters of the nation who undoubtedly have been the worst victims of apartheid. Due to the decisive mass action of the nation, Mandela rightly predicts that apartheid has no future in South Africa. He points out that the establishment of democracy is guaranteed through the mass campaign of defiance and other acts undertaken by his organization. Mandela draws the attentions of his fellows to the