Corporate finance Essay Example | Topics and Well Written Essays - 5500 words

Corporate finance - Essay Example That means it is the theory between the shareholders & the company managers. This term includes the expense of solving the potential conflicts between the two relevant groups. According to this theory, because of incomplete information & uncertainty, two types of problem can arise. Such as- A potential agency problem arises whenever the manager of a firm owns less than 100% of the firm’s common stocks. However, if the owner-manager incorporates & then sells some of the stocks to the outsiders, a potential conflict of interests immediately arises. In most large listed companies, potential conflicts of interests are important, as those firm’s managers generally own only a small percentage of the stocks. In this situation, shareholder wealth maximization could take a back seat to any number of conflicting managerial goals. In addition to the conflict between stockholders & managers, there can also be conflicts between creditors & stockholders. Creditors have a claim on the part of the firm’s earning stream of payment of interest & principle on the debt, & they have a claim on the firm’s assets in the event of bankruptcy. Stockholders have a control of decisions that affect the profitability & risk of the firm. Creditors lend the firm on the base of – 1) Capital Structure: A firm’s capital structure is that mix of debt & equity that maximizes the stock price. At any point of time, management has a specific target capital structure. Capital structure policy involves a trade-off between risk & return:- Financial flexibility or the ability to raise capital on reasonable terms under adverse conditions. The greater the probable future need for capital, & the worse the consequences of the capital shortage, the stronger the balance sheet should be. Managerial conservatism or aggressiveness that refers some managers are more aggressive than others, hence some firms are more inclined

Why Matsuo Basho left the capital city, Edo, and went to the Essay

Why Matsuo Basho left the capital city, Edo, and went to the coutry-side, Oku - Essay Example This point onwards, peace prevailed in Japan for four hundred. Paradoxically, people felt suffocation. The closed-door policy accompanied with several other strict rules enforced by the Tokugawa government pushed the citizens into a very strict social rank. There were severe limitations on travel and ban on some colors in clothing. Nonetheless, the prohibition was balanced by peace that prevailed in that time as a result of which, the Japanese society underwent a lot of changes. The quiet and peace helped Japan attain economic stability. People tried to spend their time in the most meaningful and beneficial way so that they would get rid of stress. This might be the reason why Japan greatly excelled in the fields of arts, architecture and agriculture in the very period. The capital city, Edo was the most well developed place and particularly reflected the rich Japanese culture. Therefore, people came to Edo in large numbers. â€Å"Edo bustled with warriors, craftsmen, merchants, and performers from throughout the land.† The money they spent strengthened the economy. â€Å"The shogun, daimyo, and their retainers spent almost all their money in the city; Edo was a center of consumption.† The people who had gathered in Edo from different places of origins mutually gave rise to a unique culture. â€Å"Instead, it resulted from the interaction of three groups, each of which complemented the others: the warriors, the provincial cho-nin â€Å"outsiders,† and the Edokko.† With the passage of time, the period of Tokugawa became significant because of cultural efflorescence. The Genroku era (1688-1703) was a time of renaissance in the Japanese culture; a time when both aristocratic and common arts flourished. New forms of art like Kabuki, Bunraku and Ukikiyo-e surfaced in the very era. Japanese literature also reached its apogee in the seventeenth century. Ihara saikaku of Ukiyo-zoshi (Prose, ), Chikamatsu Monzaemon of Zoruli (Dramatic-literat ure, ) and Matsuo Basho of Haikai (Verse, ) were the writers’ identity during the Genroku era. Among those writers, Matsuo Basho was particularly remarkable because of his contribution to literature through his Poem (Haikai). This poem was one of the very few pieces of literature that were treated as comic or unorthodox (HYPERLINK "http://hanja.naver.com/search?query=%E4%BF%B3%E8%AB%A7" ). â€Å"He is also chiefly known as a great writer of the haiku, one of the world’s shortest verse forms that consist of only three lines with a total of seventeen syllables.† Haiku always consists of both seasonal and cutting words. The stay of Matsuo Basho in Edo commenced in 1644 which was forty years after the establishment of government of the Tokugawa family in Edo, and his stay continued till 1690. As discussed before, the Genroku era was a time in which the popular culture greatly flourished and Edo became crowded with people. This essentially made Edo the perfect place and the Genroku era, the perfect time for Basho to implement his theory and principles in. Soon after the capitalism started to dominate in Edo, Matsuo Basho set off on a long journey to the city of Oku in 1689 miles away from the capital city (). Basho’s decision to leave Edo was quite interesting and filled the audience with curiosity. The audience might have several questions, like what made Basho choose Oku for the stay? Why did Basho leave the capital city? and, what did Basho originally pursue from his journey? It is worthwhile trying to judge the underlying factors that convinced Basho to take this decision. This paper discusses some of the reasons why Matsuo Basho might have chosen to travel to Oku. The first and foremost purpose of