The Bulgarian And Soviet Virus Factories Essays - Computer Viruses

The Bulgarian and Soviet Virus Factories The Bulgarian and Soviet Virus Factories ======================================== Vesselin Bontchev, Director Laboratory of Computer Virology Bulgarian Academy of Sciences, Sofia, Bulgaria 0) Abstract =========== It is now well known that Bulgaria is leader in computer virus production and the USSR is following closely. This paper tries to answer the main questions: Who makes viruses there, What viruses are made, and Why this is done. It also underlines the impact of this process on the West, as well as on the national software industry. 1) How the story began ====================== Just three years ago there were no computer viruses in Bulgaria. After all, these were things that can happen only in the capitalist countries. They were first mentioned in the April issue of the Bulgarian computer magazine "Komputar za vas" ("Computer for you") [KV88] in a paper, translated from the German magazine "Chip" [Chip]. Soon after that, the same Bulgarian magazine published an article [KV89]], explaining why computer viruses cannot be dangerous. The arguments presented were, in general, correct, but the author had completely missed the fact that the majority of PC users are not experienced programmers. A few months later, in the fall of the same year, two men came in the editor's office of the magazine and claimed that they have found a computer virus. Careful examination showed that it was the VIENNA virus. At that time the computer virus was a completely new idea for us. To make a computer program, whose performance resembles a live being, is able to replicate and to move from computer to computer even against the will of the user, seemed extremely exciting. The fact that "it can be done" and that even "it had been done" spread in our country like wildfire. Soon hackers obtained a copy of the virus and began to hack it. It was noticed that the program contains no "black magic" and that it was even quite sloppily written. Soon new, home--made and improved versions appeared. Some of them were produced just by assembling the disassembly of the virus using a better optimizing assembler. Some were optimized by hand. As a result, now there are several versions of this virus, that were created in Bulgaria --- versions with infective lengths of 627, 623, 622, 435, 367, 353 and even 348 bytes. The virus has been made almost two times shorter (its original infective length is 648 bytes) without any loss of functionality. This virus was the first case. Soon after that, we were "visited" by the CASCADE and the PING PONG viruses. The later was the first boot--sector virus and proved that this special area, present on every diskette can be used as a virus carrier, too. All these three viruses were probably imported with illegal copies of pirated programs. 2) Who, What & Why. =================== 2.1) The first Bulgarian virus. ------------------------------- At that time both known viruses that infected files ( VIENNA and CASCADE) infected only COM files. This made me believe that the infection of EXE files was much more difficult. Unfortunately, I made the mistake by telling my opinion to a friend of mine. Let's call him "V.B." for privacy reasons.(1) ................................................................... [(1) These are the initials of his true name. It will be the same with the other virus writers that I shall mention. Please note, that while I have the same initials (and even his full name resembles mine), we are two different persons.] ................................................................... The challenge was taken immediately and soon after that I received a simple virus that was able to infect only EXE files. It is now known to the world under the name of OLD YANKEE. The reason for this is that when the virus infects a new file, it plays the "Yankee Doodle" melody. The virus itself was quite trivial. Its only feature was its ability to infect EXE files. The author of this virus even distributed its source code (or, more exactly, the source code of the program that releases it). Nevertheless, the virus did not spread very widely and even had not been modified a lot. Only a few sites reported to be infected by it. Probably the reason for this was the fact, that the virus was non--resident and that it infected files only on the current drive. So the only possibility to get infected by it was to copy an infected file from one computer to another. When the puzzle of creating a virus which is able to infect EXE files was solved, V.B. lost his interest in this field and didn't write any other viruses. As far as I know, he currently works in real--time signal processing. 2.2)

buy custom Multinational Corporations essay

buy custom Multinational Corporations essay A multinational Corporation (MNC) is a business venture that offers goods and services in two or more countries. MNC has its management headquarter in a home country but spreads its operations in the other host countries. MNC largely influence economies of both the local and international countries across the world. So far MNC is the major factor towards building good international relations and globalization. As much as Multinational Corporations are focused to be constructive to the local societies and to achieve their objectives and potentials, they experience a number of challenges in their business operations. The commonest challege that faces the Multinational Corporations is lack of international legal framework to regulate and safeguard their activities and operations worldwide. Fully aware that trade related affairs are squarely subject to agreement between various stakeholders, countries and regions, MNCs are bound to operate at high levels of integration matchless of law in countries that are not signatories to the World Trade Organization. The reality that a business enterprise based in one country must obey the trade laws in the home country as well as those of their individual host countries results into a complexity of operations by the multinational corporations. In some host counties where there are inadequate laws and policies to regulate international trade, the MNCs should engage the local authorities in the subsequent enactment of trade laws, policies and regulations that are of mutual benefit to them both. The existence of these laws will protect global companies against unpredictable changes in foreign laws and policies that would pose a threat to their future growth and expansion. Secondly, MNCs should restrict their operations in countries that are signatories to the International trade agreements to ensure consistency and standardization of trade. Buy custom Multinational Corporations essay

CAUSES OF RENT ARREARS IN SOCIAL HOUSING -- (A LITERATURE REVIEW) review

CAUSES OF RENT ARREARS IN SOCIAL HOUSING -- (A ) - Literature review Example This is usually due to the low income that the renter is on, but there are other reasons which will be discussed in this essay. The causes of rent arrears in social housing is important because knowing the causes can help show why people have problems, if social housing rental prices need to be lowered, and how the agencies involved can help social housing tenants. Reducing the causes of rent arrears could lower the amount of rent arrears, causing less stress for the tenants and less financial burden on the government or supplying agency. Rent arrears might also lead to homelessness in cases when people have no other option, and this is something that needs to be avoided. The information is also interesting because it will help illustrate some social problems that these people have and this could be used in a wider context to understand social housing and perhaps rent arrears in general. The literature used in this review will be mainly found in housing journals, but some information will be found from other journals if they contain relevant information. Using this information, the essay will uncover the main reasons why people go into arrears on their rent in social housing by finding the key themes in the literature. This review is limited to research since the year 2000 because the most recent research is usually the most relevant to the situation, and the 21st century is interesting in many ways. Key Themes in the Literature One of the main themes in the literature is that rent arrears are a really important reason for many peoples homelessness. Crane (2000) suggests that 7% of all homeless men are homeless because they were evicted for rent arrears from social housing and a 29% more of these were in arrears to other companies. This suggests that many people struggle with financial management in social housing and this one of the main reasons why people get into rent arrears in social housing. There are suggestions that the government should sponsor some ed ucation for financial management (Collier, 2005) because this would help reduce one of the main causes of rent arrears. Research by Anderson & Christian (2003) also suggests that a number of people are homeless because they had gotten into rent arrears and often this was in social housing, although it does not give the specific causes of the rent arrears. A related theme is that some people in social housing may just not be able to afford it. Although the government or another agency does subsidise the cost of the rent, it may still be too expensive for some people. These people may have several children, no benefits, no job or many other things. This topic is found in the work of Milligan (2003) who suggests that the problems in Australia with rent arrears are mainly due to these factors and that work needs to be done on providing the housing at an even lower cost if possible. This will be the only way that rent arrears will be less common. This problem was also found in the United Kingdom and talked about by Hills (2007), who again suggested that the costs need to be lowered to make rent arrears less common in the UK. Priemus & Dieleman (2002) show that rent arrears due to the high cost of social housing are found throughout Europe and that prices are rising. More evidence from Yates & Wulff (2000) suggests that the amount of low cost social housing is being reduced meaning that more people are forced to take on housing which is too expensive for them and this

Iegal concept working in restaurant Term Paper Example | Topics and Well Written Essays - 2000 words

Iegal concept working in restaurant - Term Paper Example It will seek to show what is legal under the law, the rights of the employee and the client under the law, and circumstances that can lead to claims from the customer. Basically, the Hospitality law encompasses a wide array of laws including the law of tort, contract law, real estate law, the law of anti-trust, among others (Barth, 2001). The degree to which this law relates to such laws has continuously evolved and changed accordingly to meet the dynamics of the hospitality industry. Nevertheless, this law is used greatly to set standards and guidelines that hospitality operators and employers use in offering goods and services to their customers. Typically, this law covers the history of how hospitality law came into being, the impact that state civil rights and federal laws have on the hospitality industry, and discussion of contract law such as how a customer enters into a contract with the restaurant employees or issues regarding reservations and overbooking (Langford, 2011). With the use of internet to make reservations and orders being on the rise, the Hospitality law has evolved to include such issues, as well. In addition, in the current world both the customers and the employees know their rights and the channels that they can use to launch complaints or make claims. In this regard, the Hospitality law has continually evolved as new and better knowledge keeps on emerging. In the recent past, cases of food poisoning and awareness of food illness have been on the rise with more people being interested in getting information about the restaurant that they eat from. This has brought the Hospitality law in restaurants at the front center of public conscience. In matters related to restaurant and food services, terrorists’ attacks against hotels have raised the importance of having hospitality law that will govern international affairs especially in the quest of protecting

Target Corp - Strategic Management - 5 forces - value chain Essay

Target Corp - Strategic Management - 5 forces - value chain - Essay Example Operating in a dynamic business environment, companies often have to change their strategies to suit the industry requirements. Technological environment keeps on changing, so does customer tastes and preferences as well as government policies. The environment an organization was operating in five years ago, and the challenges faced then, are a very different from the challenges faced today. Five years from today, this scenario will be different. Thus, strategic management as a process does not end at any particular time; rather, it is an evolutionary process. As the business environment keeps changing, the management in most cases has to implement changes that will ensure that it successfully meets its goals and objectives. Failure to implement such changes whenever they fall due means that the organization falls short of its goals and objectives. Thus, it fails to live up to its vision, mission and does not achieve its target. As a destination, strategic management aims at achievin g particular goals and objectives, defined by the mission, vision and objective statement of the firm. A destination establishes a journey; not until the company reaches the defined destination, then strategies will keep on changing, through the review process. b. All companies currently must have a strategic plan to survive in the highly competitive business environment. Every organization, serious enough in achieving its goals and objectives needs to have plans on what it hopes to achieve. Even if it lacks a mission statement, then it ought to have a vision of the goals it hopes to achieve in the long term. A strategic management statement defines the vision and the mission, establishes goals and objectives to achieve. These are the underlying factors in a strategic plan of a company. Target Corporation has a vision, a mission and a target objective, the key elements defining a mission statement of a company. Laying out its plans in a well-defined way and manner, with a comprehens ively started goals and objectives, Target Corporation qualifies as a strategic management organization. While defining what it plans to achieve in future, Target Corporation plans to be the leading firm in the retail industry. Coming second from Wal-Mart retail chain in terms of market share and revenue collection, Target Corporation management hopes to become the leading firm, by passing Wal-Mart. the probability of this vision becoming a reality in absence of strategic management plans is zero. Therefore, Target has to lay down a framework that would help it achieve these goals and objectives. To achieve this strategy, the company plans to embark on an aggressive growth and expansion plan. Its long-term plans involve internal and external growth plans on areas identified through the SWOT analysis plan. Externally, it hopes to expand its operations internationally through establishment of more branches. This will not only win the firm a competitive advantage over other firms, but will also help it acquire a larger market share. Another way in which Target shows its strategic management plan is through product diversification and development. Despite offering a range of fashionable products, and enjoying high customer loyalty, the management believes that through product differentiation and diversification, it can win more customers,

Role of Debt in Capital Structure of Firms

Role of Debt in Capital Structure of Firms Capital structure has got importance in the literature of corporate finance. It provides insight about the role of debt in the capital structure of a firm. It is believed that firm endeavors to uphold optimal capital structure. In existing literature, however, there is no consensus among researchers about the level of optimal capital structure because of variation in proxies used to measure the same attribute, variation in industry norms (size, location and technology), agency cost (management ownership and competence) etc. The main objective of a firm is to maximize its profit and to give maximum return to its shareholders. For this purpose the company should use Optimal Capital Structure so as to achieve the desired targets, but usually when the time comes for the generation of capital, firms go with the more easiest way. The study investigates the relationship between the weighted average cost of capital (WACC) with Debt / Equity ratio of the firms in the Fertilizer Sector through , cross sectional analysis for the financial year 2010. The present study depicts that firms always keep in mind the tax shield. They usually prefer debt due to tax shield but some firms go with the more easiest way to raise capital, and the concept of optimal capital structure is set aside. In Pakistan, the interest rates are usually high as compared to developed countries. That is why, big firms usually prefer to raise funds through equity instead of debt. Since, financial institutions offer loans to profitable firms, at low rate keeping in view their credit rating and riskiness of operations, so these firms like fertilizer companies also include debt in their capital structure. The results are constructed with the literate review concluding that there is no consensus among researchers about the level of optimal capital structure because of variation in proxies used to measure the same attribute, variation in industry norms (size, location and technology), agency cost (management ownership and competence) etc. Further, maximization of stock return for different firms is debatable. Introduction Capital structure theories provide insights about the role of debt in the capital structure of a firm. In corporate finance literature, it is believed that firm endeavor to uphold optimal capital structure. In existing literature, however, there is no consensus among researchers about the level of optimal capital structure because of variation in proxies used to measure the same attribute, variation in industry norms (size, location and technology), agency cost (management ownership and competence) etc. Further, maximization of stock return for different firms is debatable. Various decisions taken by management include operating, financial and non- financial decisions. Financial structure (capital structure) decisions have gained importance in corporate finance, strategic management and financial economics literature. These decisions have implication for shareholders value. Capital structure comprises of debt and equity, the choice of which is associated with different levels of benefit and controls. There have always been controversies among the researchers about the optimal capital structure of the firm because of significant variation with regard to capital structure of the firm because if significant variations with regard to capital structure existing in different industries and among firm within the same industry. Further, the different proxies may be used to measure the same attribute of a variable. Selection of these proxies may create biasness. Conventional determinants of capital structure in existing literature include collateral value of ass et, non-debt tax shield, growth, uniqueness, industry classification, size volatility, and profitability. Use of debt in capital structure of a firm acts as a monitoring device over managerial actions. Use of debt puts pressure on managers to enhance the performance of a firm so that sufficient cash flows are generated to retire loan obligations. The main objective of business firm is to maximize the wealth of shareholders in the long run, the management should only invest in projects which give are turn in excess of cost of funds invested in the projects of the business. The difficulty will arise in determination of cost of funds, if it raised from different sources and different quantums. The various sources of funds to the company are in the form of equity and debt. The cost of capital is the rate of return the company has to pay to various suppliers of funds in the company. There are variations in the cost of capital due to the fact that different kinds of investment carry different levels of risk which is compensated for by different levels of return on the investment. There are two main sources of capital for a company: shareholders and lenders usually debenture holders and financial institutions. The cost of equity and cost of debt are the rates of return that need too be offered to these two groups of suppliers of capital in order to attract funds from them. The cost of capital consist of four elements: Cost of Equity (Ke), Cost of Retained Earning (Kr), Cost of Preferred Capital (Kp) and Cost of Debt( Kd).The funds required for the project are raised from the equity shareholders which are of permanent nature. These funds need not be repayable during the life time of the organization. Hence its a permanent source of funds. The equity shareholders are the owners of the company. The main objective of the firm is to maximize the wealth of the equity shareholders. Equity share capital is the risk capital of the company. If the companys business is doing well the ultimate beneficiaries are the equity shareholders who will get the return in the form of dividends from the company and the capital appreciation for their investment. If the company comes for liquidation due to losses, the ultimate and worst sufferers are the equity shareholders. Sometimes they may not get their investment back during the liquidation process. The following methods are used in calculation of cost of equity. First is Dividend Yield Method. The Dividend per share is expected on the current market price per share. As per this method, the cost of capital is defined as â€Å"the discount rate that equates the present value of all expected future dividends per share with the net proceeds of the sales (or the current market price) of a share. This method is based on the assumption that market value of shares is directly related to the future dividends on the shares. Another assumption is that the future dividend per shares is expected to be constant and the company is expected to earn at least this yield to keep the shareholders content. Second method is Dividend growth Model in which shareholders will normally expect to increase year after year and not to remain constant in perpetuity. In this method, an allowance for future growth in dividend is added to the current dividend yield. It is recognized that the current market price of a share reflect expected future dividends. The dividend growth model is also called as â€Å"Gordon dividend growth model. Third model is Price Earning Method which takes into consideration the Earning per share(EPS) and the market price of the share. It is based on the assumption that the investors capitalize the stream of future earnings of the share and the earnings of a share need not be in the form of dividend and also it need not be disbursed to the shareholders. It based on the argument that even if the earning are not disbursed as dividends, it is kept in the retained earnings and it causes future growth in the earnings of capital, the earning per share is divided by the current market price. Forth model is Capital Asset Pricing Model which divides the cost of equity into two components, the near risk-free return available on investing in government bonds and an addition risk premium for investing in a particular share or investment. This risk premium in turn comprises the average return on the overall market portfolio and the beta factor (or risk) of the particular investment. Putting this all together the CAPM assesses the cost of equity for an investment. Literature Review The empirical study done by Modigliani and Miller (1958) depicts the basis of capital structure. Under the assumption of market perfection, they argued that the value of firm is independent from its mode or source of financing. They believe that cost of capital had no influence on the capital structure, so according to them there exists no capital structure. The level of leverage may be different in the firm or within the same industry. In their point of view, the value of firm is not determined by however, the firm finances its assets but by the real assets possession is the actual value of a firm. Researchers have relaxed the unrealistic assumptions in Modigliani and Miller proposition. In real life there exists information asymmetry. Debt payments are subject to tax shield. Agency costs reflect a tradeoff model where decrease in agency cost of equity will cause an increase in agency cost of debt Jensen and Meckling (1976) They argue that agency costs, however, reduce because use of debt restricts issuance of equity, which in turn strengthens managerial ownership. It helps to reduce agency conflicts. Myers and Majluf (1984) argue that use of debt reduces agency problems. Further, leverage also bring its own agency cost that generates a conflict between agency cost of debt and equity. Jensen (1986) argues that use of debt constrains the free cash flow explanations give birth to its fixed nature of obligations. Since managerial compensation had controlled the positively related firms to grow, therefore, investors may invest available cash flows optimally or utilizes the available cash flows to pay dividends or profits. When profits are paid at low rate due to some reason, it extremely impacts the shares market price. Use of debt generate limits to the managerial discretion to use such cash flows fully because of non-payment of profit on debt may take a firm bankruptcy. Further, firms that use debt faces extreme scanning by debt holders. These facts indulge managers to utilize their resources optimally which ultimately enriches firm value. The theoretical framework of capital structure begins with the seminal paper of Modigliani and Miller (1958) who postulate that capital structure of a firm is irrelevant in perfect capital markets. By using net operating income approach, they argue that the overall capitalization rate remain constant for any level of financial leverage. That is, the total risk of security holders of a firm remains unaffected for any change in capital structure. Therefore, value of a firm is independent of the capital structure of a firm. Their theory is based on unrealistic assumptions of no income taxes, no transaction costs, no information asymmetry, no bankruptcy and agency cost etc. They believe in the conservation of investment value. The researchers have relaxed the assumption of perfect capital market assumed by Modigliani and Miller. Following theories explain the relevance of capital structure under different market imperfection. Trade off theory relaxes the assumption of bankruptcy costs. It considers the cost of financial distress (bankruptcy cost, reorganization cost and non-bankruptcy cost). It elaborates the impact of financing cost and tax shield on debt. According to trade-off theory, increase in debt is positively related to marginal cost of debt and negatively related to marginal benefit of increase in debt. A firm focuses on trade-off between marginal benefit and cost of debt while deciding about the proportion of debt and equity in its capital structure with a view to optimize the overall value of the firm. A firm should borrow until the marginal tax advantage of additional debt is offset by the increase in present value of the expected costs of financial distress. This theory has been criticized by researchers on different grounds. For instance, Miller (1977) argues that firms pay large taxes frequently, whereas occurrence of bankruptcy is not recurring in nature. So, low weights are assigned to b ankruptcy cost. Further, in reality, firms do not have higher weightage of debt in their capital structure. Pecking Order theory of capital structure is based on the costs of asymmetric information. It assumes relevance of asymmetric information only for external financing. It describes the sequence (internal financing to external financing) that a firm uses to finance its capital expenditures. According to pecking order, a firm having sufficient profits and cash flows use internal funds first. It will go for external financing if internal funds are not sufficient. While deciding about external financing, a firm will issue the safest security like bonds; debenture or term-finance certificates and equity will be used as the last option. Further, in case the internally generated cash flows exceed the capital investment requirements, these excessive cash flows will be utilized to repay debt instead of buying back equity. Milton and Artur (1991) discussed the theory of capital structure grounded on four basic factors. Firstly, agency cost that shows conflicts among managers, equity holders and debt holders. Secondly, there is asymmetric information and it explains the possible capital structure. Thirdly, it is centered on the product/input market interactions with Capital structure. Fourthly, it describes theories driven by co-operate control consideration it shows the linkage between the market for co-operate control and for Capital structure. Peter and Gordon (2005) have discussed the importance of industry to firm-level financing and real its decisions. The findings of this paper were financial structure that depends on a firms position within its industry and In competitive industry, a firms financial control depends on its natural hedge the activities of other firms in this industry, and its status as entrant, current performance, or exiting firm. Financial control is higher and less discrete in concentrated industries, where strategic debt interactions are stronger, but a firms natural hedge is not significant. Our finding shows that financial structure, technology, and risk are jointly determined within industries. These findings are reliable with recent industry equilibrium models of financial structure. The analysis made by Laurence et al (2001), discusses the Capital Structures in developing countries uses a new set of data to assess whether capital structure theory is transferable across countries with different influential structures or not. In this analysis they used 10 developing countries and provided evidence that these decisions are affected by the same factors as in developed countries. However, there are persistent differences across countries, indicating that specific country factors are at work. their findings suggests that although some of the insights from modern finance theory are transferable across countries and much remains to be done to understand the impact of different institutional features on capital structure choices. This paper affirms the arguments on the tax shield valuation as it remains a hot issue in the financial literature. Basically, two methods have been projected to incorporate the tax benefit of debt in the present value computation: The adjusted present value (APV), and the weighted average cost of capital (WACC). This note clarifies the correlation between these two apparently different approaches by offering a formula for the WACC. Firms interest expenses are tax deductible. Therefore, debt increases the cash flows available to stockholders and bondholders by the amount of the tax reduction. Joseph Ignacio (2005), discusses the cost of debt is the market rate or unsubsidized rate for which an investor is willing to pay. In further detail debt creates and sustain its value when tax shield is applied and the rate is sustainable but if the rate of repayment is high then form the loan and at a low market rate then loan will be preferable as it is subsidized debt and no tax is applied, the firm would be a benefited with debt financing, and the unlevered and levered values of the cash flows would be unequal. And the optimal rate of return and WACC can be achieved if a firm follows the rules and take into account all sources of financing. Tom and Timothy (2004) assumes that the use of weighted average cost of capital (WACC) is better then the use of any other calculation because either it may be riskier or will not depict the true picture of the financial performance or the position of the firm. This paper encourages the usage of WACC in all the firms although it is difficult to calculate and had some mathematical complexities but after that it depicts a clear picture of the firm, as by using spreadsheets it is easy to present the findings of the company to its managers, clients, colleagues and shareholders. The WACC is a fundamental concept in corporate finance. Its basic definition is averaging the cost of capital coming from both the equity and the debt by Farber at el (2006) and it looks simple. But the fact is its practical implementation which has raised several questions, they are most likely the distinction between book value and the market value. This paper addresses more in depth the tax shield valuation and establishes a general formula that remains valid for any debt structure. In this context, there contribution allows not only to compare the usual WACC computation in a more rigorous way but also less synthetic one, and helps the firms to adapt the WACC approach to any chosen tax shield valuation model. In this sense, the WACC appears as a powerful and very adaptable concept. Greg (2004), discusses what is WACC and what are there components and how these components are calculated and are helpful in the calculation of WACC. The paper further discusses that what should be the minimum discount rate that make intuitive sense to invest or to add a firm in portfolio. It also explains that what is the cost of debt, cost of financing and the components of cost of financing. Myers and majluf (1984), argues that the use of debt reduces agency problems and further leverage also brings its own agency cost thats generates a conflict between agency cost debt and equity. Jenson (1986), states that the use of debt will restrict the cash flow projections due to its fixed rules. Since marginal benefits and control its positively related to firm development. Therefore management may invest available resources to obtain cash flows. When dividend are paid but at a low rate its adversely affect the share price in the market. The usage of debt limits the firm to invest else-where because the non-payment of the debt leads to bankruptcy. Lakshmi (1994), differentiates between the traditional capital structure models and the new pecking order theory model of the corporate financing. The basics of pecking order theory model assumes that the debt financing driven by the internal financing, has much more time series explanatory power than a static trade of model, which predicts that each firm adjusts gradually toward an optimal debt ratio. And had shown in their results that the power to reject the pecking order against trade of theory. The model of (CAPM) given by William and John (1964,1965), gives evidence of the birth of asset pricing theory for which noble prize was given to sharpe in 1990. Forty years later CAPM is now publically used in estimating the cost of capital of the industry and evaluating the esteem to have the maximum profits from the portfolio invested in. The attractiveness in estimation of CAPM is that it offers a wide pleasing range of predictions about how to measure and ensure the risk and the relation between expected returns and risk. Unfortunately, some problems of CAPMs may reflect the theory may fails at some times, the result of many not be as per assumptions. But they may be caused by difficulties in implementation of valid tests to the model. Dan at el (2005) examine the entire associations between leverage, corporate and personal taxes, and the firms cost of equity to generate capital. Expanding the theory of Modigliani and Miller (1958, 1963), the cost of equity capital can be expressed as an impact of leverage and corporate and level taxes. The predictions that the equity cost will increase in leverage, but that corporate taxes shifts from leverage related risk premium, while the personal tax disadvantage of burden of debt reduces the profit. They examined the findings by using implied equity cost estimation system of the firms corporate tax rate and the personal tax gives a big advantage of debt. Their result suggests that the premium equity risk is linked with the profit, and if the entire profit is decreasing the corporate tax generates benefit. They also marked evidence that the premium equity risk has relations with leverage, and increase in entire profit may give a results in increased in personal tax. Rodolfo (2008) sets forth the contribution to this long lasting debate on cost of capital, firstly by introducing the multiplicative model that helps to calculate the rate of WACC. Secondly, by making adjustments in the rate of governance risk. The older approach says that the cost of capital might be calculated by means of a weighted average of debt and capital. But this is not a correct way of calculation and that might bring misappropriation, whereas the multiplicative model not only calculate the linear approximation but also the joint outcome of expected costs of debt and stock, and its proportion in the capital structure of that firm. Nevins (1967), explains in reference to Modigliani and millers discussion that how leverage can be effective and efficient to increase the entire cost of capital of the industry or the firm. He also discusses in detail that when the account is taken of risk and is ruin an increasing cost of capital is perfectly the same with little arbitrage operations. Giving ways to the chances of bankruptcy is tantamount to relax the that entire stream of operating earnings Is independent from the entire capital structure. Robert (1988), argues the effect of corporate and personal taxes on the firms optimal capital structure and financing decisions under uncertain defined conditions. It further more discussion they discussed the entire capital structure model by categorizing them entire firms important investments decisions. The results suggests that when investment was allowed to adjust optimally the existing assumptions about the relationship between investment and debt related tax shields must be changed. Secondly, they discussed that the increases in investment related tax shields changes due to corporate tax code are not necessarily linked with reductions in profits at the individual and companys level. In cross sectional analysis, firms with bigger investment tax shield. Need not to have lower debt tax shields unless all the market utilize the same mechanism. Differences in production technologies in the entire market may query questions that why the empirical results cross-sectional analysis do not meet the expectations of the researchers. Alan reviewed the financial consumption and behavior of the company to increase their profits and wealth of their existing shareholders. They mainly focuses on the impact of personal income and capital gains and taxes, and discovered that in the presence of different taxation systems of dividends and capital gains, wealth maximization does not imply maximization of firm market value and the source of equity financing is not irrelevant. The approximate cost of capital in the presence of income taxes does not depend directly on either the dividend payout rate or the tax on dividends paid. Equity shares have a market value lower than the difference between the production cost of a companys assets and the current market value of its debt obligations. Because of this capitalization, it need not be true that an economy without taking risks and uncertainty there would have no financing. The Hypothesis The detail literature review enabled us to construct the following hypothesis. H0: The firm with high debt/ equity ratio should have less cost of capital. H1: The firm with lower debt/ equity ratio should have higher cost of capital.. Research Methodology This chapter describes the methodology to investigate research problems in order to draw conclusion for the present study. Research methodology comprises of research method employed identification to the problem criteria for sample selection methods for data collection and construction for measuring instruments. It comprises of the brief description of variables and proxies used to measure those variables. It also describers research limitation and ethical concerns. 3.1 Research design and data description As stated earlier, the objective of the study is to explore the relationship between the Debt / Asset Ratio and the weighted average cost of capital. For this purpose we have targeted four companies of fertilizer sector from Pakistan into year 2010. Basically there are four companies in the Fertilizer sector listed under the roof of Karachi Stock Exchange, but three of them are selected at random. Therefore, the sample size comprises of almost cover 75% of the fertilizer sector. 3.2 Model Description As stated earlier the study has been under taken to investigate the relationship of Debt / Equity Ratio and weighted cost of capital in the industry. Following models are used to calculate the cost of capital. 3.2.1 Cost of debt The capital structure of a firm normally include the debt component. The debt may be in the form of Debentures, Bonds, Term Loans from Financial Institutions and Banks etc. The debt carries a fix rate of interest, irrespective of the profitability of the company. Because the coupon rate is fixed, the firm increases its earning through debt financing. Then after payment of fixed interest charges more surplus is available for equity shareholders, and hence EPS will increase. An important point to be remembered that dividends payable to equity shareholders and preference shareholders is an appropriation of profit, whereas the interest payable to debt is charged against profit. Therefore, any payment towards interest will reduce the profit and ultimately the companys tax liability will decrease. The phenomenon is called as tax shield. The tax shield is viewed as a benefit that accrues to the company which is geared. 3.2.2 Price Earning Method This method takes into consideration the Earning per share(EPS) and the market price of the share. It is based on the assumption that the investors capitalize the stream of future earnings of the share and the earnings of a share need not be in the form of dividend and also it need not be disbursed to the shareholders. It based on the argument that even if the earning are not disbursed as dividends, it is kept in the retained earnings and it causes future growth in the earnings of capital, the earning per share is divided by the current market price. We have selected price earning method as this method provides us the required results. Although there are various methods to calculate the cost of Equity but there are some limitations applied on them. 3.2.3 Debt / Equity Ratio The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders equity and debt used to raise the companys capital. It is also known as Risk, Gearing or Leverage Ratio. The two components are often taken from the firms balance sheet or statement of financial position, but the ratio may also be calculated using market values for both, if the companys debt and equity are publicly traded, or using a combination of book value for debt and market value for equity financially. =Long Term Interests Bearing Debt/ Total Equity 3.3 Companies Included in the Study Following companies are included in this study from the Fertilizer sector for detailed analysis. Fauji Fertilizer Limited. (FFC) Fauji Fertilizer Bin Qasim Limited. (FFBL) Dawood Hercules Chemicals Limited. (DAWH) 3.4 Limitations of The Study Although there are various methods to calculate the Cost of Equity but there are some limitations. For instance, Gordon Growth Model cannot be applied because the firms in Pakistan do not pay dividends at perpetual constant growth rate. The other technique Capital Asset Pricing Model of calculating the Cost of Equity will create biasness due to real adjustment of inflation premium in real rate of interest to calculate the risk free rate of return. Further, the return on market portfolio requires a detailed analysis of stock returns with other financial indicators. Therefore, the study uses Price Earning Method due to availability of actual and exact data. Empirical Study Of Fertilizer Sector This chapter includes the descriptive results and detailed analysis. The detailed analysis of Fertilizer sector is given below. It includes Cost of Debt KD, Cost of Equity KE, the WACC and Debt / Equity Ratio of the three companies which fall in the fertilizer sector. Analysis The present study empirically investigates the relationship between the Weighted Average Cost Of Capital and Return On Assets. We have chosen three fertilizer companies listed in Karachi Stock Exchange. Name of Company WACC Debt/ Equity Ratio Fauji Fertilizer Limited 12.77% 24.72% Fauji Fertilizer Bin Qasim Limited 9.18% 37.16% Dawood Hercules Chemicals Limited 10.98% 20.91% After the detailed analysis, the study concludes that Fauji fertilizer has low debt / equity ratio as compared to Fauji Fertilizer Bin Qasim Limited and higher WACC. Which is consistent with our hypothesis that H0: The firm with high debt/ equity ratio should have less cost of capital. In the case of Fauji Fertilizer Bin Qasim Limited it has higher Debt / Equity ratio as compared to Dawood Hercules. So accordingly, its WACC is less than Dawood Hercules which is consistent with our Hypothesis. Further, when we compared Dawood Hercules with Fauji Fertilizer the study concludes that, though the debt / equity ratio of Fauji Fertilizer has greater Debt / Equity Ratio than of Dawood Hercules, but the WACC of Fauji Fertilizer is higher than Dawood Hercules. Which is not favorable according to hypothesis. This conclusion leads to the conclusion that while deciding about the capital structure, the firms always do not keep in mind the optimal capital structure which is subject to the availabil ity of funds. Conclusion The present study depicts that firms always keep in mind the tax shield. They usually prefer debt due to tax shield but some firms go with the more easiest way to raise capital, and the concept of optimal capital structure is set aside. In Pakistan, the interest rates are usually high as compared to developed countries. That is why, big firms usually prefer to raise funds through equity instead of debt. Since, financial institutions offer loans to profitable firms, at low rate keeping in view their credit rating and riskiness of operations, so these firms like fertilizer companies also include debt in their capital structure. The results are constructed with the literate review concluding that there is no consensus among researchers about the level of optimal capital structure because of variation in proxies used to measure the same attribute, variation in industry norms (size, location and technology), agency cost (management ownership and competence) etc. Further, maximization of s tock return for different firms is debatable. Role of Debt in Capital Structure of Firms Role of Debt in Capital Structure of Firms Capital structure has got importance in the literature of corporate finance. It provides insight about the role of debt in the capital structure of a firm. It is believed that firm endeavors to uphold optimal capital structure. In existing literature, however, there is no consensus among researchers about the level of optimal capital structure because of variation in proxies used to measure the same attribute, variation in industry norms (size, location and technology), agency cost (management ownership and competence) etc. The main objective of a firm is to maximize its profit and to give maximum return to its shareholders. For this purpose the company should use Optimal Capital Structure so as to achieve the desired targets, but usually when the time comes for the generation of capital, firms go with the more easiest way. The study investigates the relationship between the weighted average cost of capital (WACC) with Debt / Equity ratio of the firms in the Fertilizer Sector through , cross sectional analysis for the financial year 2010. The present study depicts that firms always keep in mind the tax shield. They usually prefer debt due to tax shield but some firms go with the more easiest way to raise capital, and the concept of optimal capital structure is set aside. In Pakistan, the interest rates are usually high as compared to developed countries. That is why, big firms usually prefer to raise funds through equity instead of debt. Since, financial institutions offer loans to profitable firms, at low rate keeping in view their credit rating and riskiness of operations, so these firms like fertilizer companies also include debt in their capital structure. The results are constructed with the literate review concluding that there is no consensus among researchers about the level of optimal capital structure because of variation in proxies used to measure the same attribute, variation in industry norms (size, location and technology), agency cost (management ownership and competence) etc. Further, maximization of stock return for different firms is debatable. Introduction Capital structure theories provide insights about the role of debt in the capital structure of a firm. In corporate finance literature, it is believed that firm endeavor to uphold optimal capital structure. In existing literature, however, there is no consensus among researchers about the level of optimal capital structure because of variation in proxies used to measure the same attribute, variation in industry norms (size, location and technology), agency cost (management ownership and competence) etc. Further, maximization of stock return for different firms is debatable. Various decisions taken by management include operating, financial and non- financial decisions. Financial structure (capital structure) decisions have gained importance in corporate finance, strategic management and financial economics literature. These decisions have implication for shareholders value. Capital structure comprises of debt and equity, the choice of which is associated with different levels of benefit and controls. There have always been controversies among the researchers about the optimal capital structure of the firm because of significant variation with regard to capital structure of the firm because if significant variations with regard to capital structure existing in different industries and among firm within the same industry. Further, the different proxies may be used to measure the same attribute of a variable. Selection of these proxies may create biasness. Conventional determinants of capital structure in existing literature include collateral value of ass et, non-debt tax shield, growth, uniqueness, industry classification, size volatility, and profitability. Use of debt in capital structure of a firm acts as a monitoring device over managerial actions. Use of debt puts pressure on managers to enhance the performance of a firm so that sufficient cash flows are generated to retire loan obligations. The main objective of business firm is to maximize the wealth of shareholders in the long run, the management should only invest in projects which give are turn in excess of cost of funds invested in the projects of the business. The difficulty will arise in determination of cost of funds, if it raised from different sources and different quantums. The various sources of funds to the company are in the form of equity and debt. The cost of capital is the rate of return the company has to pay to various suppliers of funds in the company. There are variations in the cost of capital due to the fact that different kinds of investment carry different levels of risk which is compensated for by different levels of return on the investment. There are two main sources of capital for a company: shareholders and lenders usually debenture holders and financial institutions. The cost of equity and cost of debt are the rates of return that need too be offered to these two groups of suppliers of capital in order to attract funds from them. The cost of capital consist of four elements: Cost of Equity (Ke), Cost of Retained Earning (Kr), Cost of Preferred Capital (Kp) and Cost of Debt( Kd).The funds required for the project are raised from the equity shareholders which are of permanent nature. These funds need not be repayable during the life time of the organization. Hence its a permanent source of funds. The equity shareholders are the owners of the company. The main objective of the firm is to maximize the wealth of the equity shareholders. Equity share capital is the risk capital of the company. If the companys business is doing well the ultimate beneficiaries are the equity shareholders who will get the return in the form of dividends from the company and the capital appreciation for their investment. If the company comes for liquidation due to losses, the ultimate and worst sufferers are the equity shareholders. Sometimes they may not get their investment back during the liquidation process. The following methods are used in calculation of cost of equity. First is Dividend Yield Method. The Dividend per share is expected on the current market price per share. As per this method, the cost of capital is defined as â€Å"the discount rate that equates the present value of all expected future dividends per share with the net proceeds of the sales (or the current market price) of a share. This method is based on the assumption that market value of shares is directly related to the future dividends on the shares. Another assumption is that the future dividend per shares is expected to be constant and the company is expected to earn at least this yield to keep the shareholders content. Second method is Dividend growth Model in which shareholders will normally expect to increase year after year and not to remain constant in perpetuity. In this method, an allowance for future growth in dividend is added to the current dividend yield. It is recognized that the current market price of a share reflect expected future dividends. The dividend growth model is also called as â€Å"Gordon dividend growth model. Third model is Price Earning Method which takes into consideration the Earning per share(EPS) and the market price of the share. It is based on the assumption that the investors capitalize the stream of future earnings of the share and the earnings of a share need not be in the form of dividend and also it need not be disbursed to the shareholders. It based on the argument that even if the earning are not disbursed as dividends, it is kept in the retained earnings and it causes future growth in the earnings of capital, the earning per share is divided by the current market price. Forth model is Capital Asset Pricing Model which divides the cost of equity into two components, the near risk-free return available on investing in government bonds and an addition risk premium for investing in a particular share or investment. This risk premium in turn comprises the average return on the overall market portfolio and the beta factor (or risk) of the particular investment. Putting this all together the CAPM assesses the cost of equity for an investment. Literature Review The empirical study done by Modigliani and Miller (1958) depicts the basis of capital structure. Under the assumption of market perfection, they argued that the value of firm is independent from its mode or source of financing. They believe that cost of capital had no influence on the capital structure, so according to them there exists no capital structure. The level of leverage may be different in the firm or within the same industry. In their point of view, the value of firm is not determined by however, the firm finances its assets but by the real assets possession is the actual value of a firm. Researchers have relaxed the unrealistic assumptions in Modigliani and Miller proposition. In real life there exists information asymmetry. Debt payments are subject to tax shield. Agency costs reflect a tradeoff model where decrease in agency cost of equity will cause an increase in agency cost of debt Jensen and Meckling (1976) They argue that agency costs, however, reduce because use of debt restricts issuance of equity, which in turn strengthens managerial ownership. It helps to reduce agency conflicts. Myers and Majluf (1984) argue that use of debt reduces agency problems. Further, leverage also bring its own agency cost that generates a conflict between agency cost of debt and equity. Jensen (1986) argues that use of debt constrains the free cash flow explanations give birth to its fixed nature of obligations. Since managerial compensation had controlled the positively related firms to grow, therefore, investors may invest available cash flows optimally or utilizes the available cash flows to pay dividends or profits. When profits are paid at low rate due to some reason, it extremely impacts the shares market price. Use of debt generate limits to the managerial discretion to use such cash flows fully because of non-payment of profit on debt may take a firm bankruptcy. Further, firms that use debt faces extreme scanning by debt holders. These facts indulge managers to utilize their resources optimally which ultimately enriches firm value. The theoretical framework of capital structure begins with the seminal paper of Modigliani and Miller (1958) who postulate that capital structure of a firm is irrelevant in perfect capital markets. By using net operating income approach, they argue that the overall capitalization rate remain constant for any level of financial leverage. That is, the total risk of security holders of a firm remains unaffected for any change in capital structure. Therefore, value of a firm is independent of the capital structure of a firm. Their theory is based on unrealistic assumptions of no income taxes, no transaction costs, no information asymmetry, no bankruptcy and agency cost etc. They believe in the conservation of investment value. The researchers have relaxed the assumption of perfect capital market assumed by Modigliani and Miller. Following theories explain the relevance of capital structure under different market imperfection. Trade off theory relaxes the assumption of bankruptcy costs. It considers the cost of financial distress (bankruptcy cost, reorganization cost and non-bankruptcy cost). It elaborates the impact of financing cost and tax shield on debt. According to trade-off theory, increase in debt is positively related to marginal cost of debt and negatively related to marginal benefit of increase in debt. A firm focuses on trade-off between marginal benefit and cost of debt while deciding about the proportion of debt and equity in its capital structure with a view to optimize the overall value of the firm. A firm should borrow until the marginal tax advantage of additional debt is offset by the increase in present value of the expected costs of financial distress. This theory has been criticized by researchers on different grounds. For instance, Miller (1977) argues that firms pay large taxes frequently, whereas occurrence of bankruptcy is not recurring in nature. So, low weights are assigned to b ankruptcy cost. Further, in reality, firms do not have higher weightage of debt in their capital structure. Pecking Order theory of capital structure is based on the costs of asymmetric information. It assumes relevance of asymmetric information only for external financing. It describes the sequence (internal financing to external financing) that a firm uses to finance its capital expenditures. According to pecking order, a firm having sufficient profits and cash flows use internal funds first. It will go for external financing if internal funds are not sufficient. While deciding about external financing, a firm will issue the safest security like bonds; debenture or term-finance certificates and equity will be used as the last option. Further, in case the internally generated cash flows exceed the capital investment requirements, these excessive cash flows will be utilized to repay debt instead of buying back equity. Milton and Artur (1991) discussed the theory of capital structure grounded on four basic factors. Firstly, agency cost that shows conflicts among managers, equity holders and debt holders. Secondly, there is asymmetric information and it explains the possible capital structure. Thirdly, it is centered on the product/input market interactions with Capital structure. Fourthly, it describes theories driven by co-operate control consideration it shows the linkage between the market for co-operate control and for Capital structure. Peter and Gordon (2005) have discussed the importance of industry to firm-level financing and real its decisions. The findings of this paper were financial structure that depends on a firms position within its industry and In competitive industry, a firms financial control depends on its natural hedge the activities of other firms in this industry, and its status as entrant, current performance, or exiting firm. Financial control is higher and less discrete in concentrated industries, where strategic debt interactions are stronger, but a firms natural hedge is not significant. Our finding shows that financial structure, technology, and risk are jointly determined within industries. These findings are reliable with recent industry equilibrium models of financial structure. The analysis made by Laurence et al (2001), discusses the Capital Structures in developing countries uses a new set of data to assess whether capital structure theory is transferable across countries with different influential structures or not. In this analysis they used 10 developing countries and provided evidence that these decisions are affected by the same factors as in developed countries. However, there are persistent differences across countries, indicating that specific country factors are at work. their findings suggests that although some of the insights from modern finance theory are transferable across countries and much remains to be done to understand the impact of different institutional features on capital structure choices. This paper affirms the arguments on the tax shield valuation as it remains a hot issue in the financial literature. Basically, two methods have been projected to incorporate the tax benefit of debt in the present value computation: The adjusted present value (APV), and the weighted average cost of capital (WACC). This note clarifies the correlation between these two apparently different approaches by offering a formula for the WACC. Firms interest expenses are tax deductible. Therefore, debt increases the cash flows available to stockholders and bondholders by the amount of the tax reduction. Joseph Ignacio (2005), discusses the cost of debt is the market rate or unsubsidized rate for which an investor is willing to pay. In further detail debt creates and sustain its value when tax shield is applied and the rate is sustainable but if the rate of repayment is high then form the loan and at a low market rate then loan will be preferable as it is subsidized debt and no tax is applied, the firm would be a benefited with debt financing, and the unlevered and levered values of the cash flows would be unequal. And the optimal rate of return and WACC can be achieved if a firm follows the rules and take into account all sources of financing. Tom and Timothy (2004) assumes that the use of weighted average cost of capital (WACC) is better then the use of any other calculation because either it may be riskier or will not depict the true picture of the financial performance or the position of the firm. This paper encourages the usage of WACC in all the firms although it is difficult to calculate and had some mathematical complexities but after that it depicts a clear picture of the firm, as by using spreadsheets it is easy to present the findings of the company to its managers, clients, colleagues and shareholders. The WACC is a fundamental concept in corporate finance. Its basic definition is averaging the cost of capital coming from both the equity and the debt by Farber at el (2006) and it looks simple. But the fact is its practical implementation which has raised several questions, they are most likely the distinction between book value and the market value. This paper addresses more in depth the tax shield valuation and establishes a general formula that remains valid for any debt structure. In this context, there contribution allows not only to compare the usual WACC computation in a more rigorous way but also less synthetic one, and helps the firms to adapt the WACC approach to any chosen tax shield valuation model. In this sense, the WACC appears as a powerful and very adaptable concept. Greg (2004), discusses what is WACC and what are there components and how these components are calculated and are helpful in the calculation of WACC. The paper further discusses that what should be the minimum discount rate that make intuitive sense to invest or to add a firm in portfolio. It also explains that what is the cost of debt, cost of financing and the components of cost of financing. Myers and majluf (1984), argues that the use of debt reduces agency problems and further leverage also brings its own agency cost thats generates a conflict between agency cost debt and equity. Jenson (1986), states that the use of debt will restrict the cash flow projections due to its fixed rules. Since marginal benefits and control its positively related to firm development. Therefore management may invest available resources to obtain cash flows. When dividend are paid but at a low rate its adversely affect the share price in the market. The usage of debt limits the firm to invest else-where because the non-payment of the debt leads to bankruptcy. Lakshmi (1994), differentiates between the traditional capital structure models and the new pecking order theory model of the corporate financing. The basics of pecking order theory model assumes that the debt financing driven by the internal financing, has much more time series explanatory power than a static trade of model, which predicts that each firm adjusts gradually toward an optimal debt ratio. And had shown in their results that the power to reject the pecking order against trade of theory. The model of (CAPM) given by William and John (1964,1965), gives evidence of the birth of asset pricing theory for which noble prize was given to sharpe in 1990. Forty years later CAPM is now publically used in estimating the cost of capital of the industry and evaluating the esteem to have the maximum profits from the portfolio invested in. The attractiveness in estimation of CAPM is that it offers a wide pleasing range of predictions about how to measure and ensure the risk and the relation between expected returns and risk. Unfortunately, some problems of CAPMs may reflect the theory may fails at some times, the result of many not be as per assumptions. But they may be caused by difficulties in implementation of valid tests to the model. Dan at el (2005) examine the entire associations between leverage, corporate and personal taxes, and the firms cost of equity to generate capital. Expanding the theory of Modigliani and Miller (1958, 1963), the cost of equity capital can be expressed as an impact of leverage and corporate and level taxes. The predictions that the equity cost will increase in leverage, but that corporate taxes shifts from leverage related risk premium, while the personal tax disadvantage of burden of debt reduces the profit. They examined the findings by using implied equity cost estimation system of the firms corporate tax rate and the personal tax gives a big advantage of debt. Their result suggests that the premium equity risk is linked with the profit, and if the entire profit is decreasing the corporate tax generates benefit. They also marked evidence that the premium equity risk has relations with leverage, and increase in entire profit may give a results in increased in personal tax. Rodolfo (2008) sets forth the contribution to this long lasting debate on cost of capital, firstly by introducing the multiplicative model that helps to calculate the rate of WACC. Secondly, by making adjustments in the rate of governance risk. The older approach says that the cost of capital might be calculated by means of a weighted average of debt and capital. But this is not a correct way of calculation and that might bring misappropriation, whereas the multiplicative model not only calculate the linear approximation but also the joint outcome of expected costs of debt and stock, and its proportion in the capital structure of that firm. Nevins (1967), explains in reference to Modigliani and millers discussion that how leverage can be effective and efficient to increase the entire cost of capital of the industry or the firm. He also discusses in detail that when the account is taken of risk and is ruin an increasing cost of capital is perfectly the same with little arbitrage operations. Giving ways to the chances of bankruptcy is tantamount to relax the that entire stream of operating earnings Is independent from the entire capital structure. Robert (1988), argues the effect of corporate and personal taxes on the firms optimal capital structure and financing decisions under uncertain defined conditions. It further more discussion they discussed the entire capital structure model by categorizing them entire firms important investments decisions. The results suggests that when investment was allowed to adjust optimally the existing assumptions about the relationship between investment and debt related tax shields must be changed. Secondly, they discussed that the increases in investment related tax shields changes due to corporate tax code are not necessarily linked with reductions in profits at the individual and companys level. In cross sectional analysis, firms with bigger investment tax shield. Need not to have lower debt tax shields unless all the market utilize the same mechanism. Differences in production technologies in the entire market may query questions that why the empirical results cross-sectional analysis do not meet the expectations of the researchers. Alan reviewed the financial consumption and behavior of the company to increase their profits and wealth of their existing shareholders. They mainly focuses on the impact of personal income and capital gains and taxes, and discovered that in the presence of different taxation systems of dividends and capital gains, wealth maximization does not imply maximization of firm market value and the source of equity financing is not irrelevant. The approximate cost of capital in the presence of income taxes does not depend directly on either the dividend payout rate or the tax on dividends paid. Equity shares have a market value lower than the difference between the production cost of a companys assets and the current market value of its debt obligations. Because of this capitalization, it need not be true that an economy without taking risks and uncertainty there would have no financing. The Hypothesis The detail literature review enabled us to construct the following hypothesis. H0: The firm with high debt/ equity ratio should have less cost of capital. H1: The firm with lower debt/ equity ratio should have higher cost of capital.. Research Methodology This chapter describes the methodology to investigate research problems in order to draw conclusion for the present study. Research methodology comprises of research method employed identification to the problem criteria for sample selection methods for data collection and construction for measuring instruments. It comprises of the brief description of variables and proxies used to measure those variables. It also describers research limitation and ethical concerns. 3.1 Research design and data description As stated earlier, the objective of the study is to explore the relationship between the Debt / Asset Ratio and the weighted average cost of capital. For this purpose we have targeted four companies of fertilizer sector from Pakistan into year 2010. Basically there are four companies in the Fertilizer sector listed under the roof of Karachi Stock Exchange, but three of them are selected at random. Therefore, the sample size comprises of almost cover 75% of the fertilizer sector. 3.2 Model Description As stated earlier the study has been under taken to investigate the relationship of Debt / Equity Ratio and weighted cost of capital in the industry. Following models are used to calculate the cost of capital. 3.2.1 Cost of debt The capital structure of a firm normally include the debt component. The debt may be in the form of Debentures, Bonds, Term Loans from Financial Institutions and Banks etc. The debt carries a fix rate of interest, irrespective of the profitability of the company. Because the coupon rate is fixed, the firm increases its earning through debt financing. Then after payment of fixed interest charges more surplus is available for equity shareholders, and hence EPS will increase. An important point to be remembered that dividends payable to equity shareholders and preference shareholders is an appropriation of profit, whereas the interest payable to debt is charged against profit. Therefore, any payment towards interest will reduce the profit and ultimately the companys tax liability will decrease. The phenomenon is called as tax shield. The tax shield is viewed as a benefit that accrues to the company which is geared. 3.2.2 Price Earning Method This method takes into consideration the Earning per share(EPS) and the market price of the share. It is based on the assumption that the investors capitalize the stream of future earnings of the share and the earnings of a share need not be in the form of dividend and also it need not be disbursed to the shareholders. It based on the argument that even if the earning are not disbursed as dividends, it is kept in the retained earnings and it causes future growth in the earnings of capital, the earning per share is divided by the current market price. We have selected price earning method as this method provides us the required results. Although there are various methods to calculate the cost of Equity but there are some limitations applied on them. 3.2.3 Debt / Equity Ratio The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders equity and debt used to raise the companys capital. It is also known as Risk, Gearing or Leverage Ratio. The two components are often taken from the firms balance sheet or statement of financial position, but the ratio may also be calculated using market values for both, if the companys debt and equity are publicly traded, or using a combination of book value for debt and market value for equity financially. =Long Term Interests Bearing Debt/ Total Equity 3.3 Companies Included in the Study Following companies are included in this study from the Fertilizer sector for detailed analysis. Fauji Fertilizer Limited. (FFC) Fauji Fertilizer Bin Qasim Limited. (FFBL) Dawood Hercules Chemicals Limited. (DAWH) 3.4 Limitations of The Study Although there are various methods to calculate the Cost of Equity but there are some limitations. For instance, Gordon Growth Model cannot be applied because the firms in Pakistan do not pay dividends at perpetual constant growth rate. The other technique Capital Asset Pricing Model of calculating the Cost of Equity will create biasness due to real adjustment of inflation premium in real rate of interest to calculate the risk free rate of return. Further, the return on market portfolio requires a detailed analysis of stock returns with other financial indicators. Therefore, the study uses Price Earning Method due to availability of actual and exact data. Empirical Study Of Fertilizer Sector This chapter includes the descriptive results and detailed analysis. The detailed analysis of Fertilizer sector is given below. It includes Cost of Debt KD, Cost of Equity KE, the WACC and Debt / Equity Ratio of the three companies which fall in the fertilizer sector. Analysis The present study empirically investigates the relationship between the Weighted Average Cost Of Capital and Return On Assets. We have chosen three fertilizer companies listed in Karachi Stock Exchange. Name of Company WACC Debt/ Equity Ratio Fauji Fertilizer Limited 12.77% 24.72% Fauji Fertilizer Bin Qasim Limited 9.18% 37.16% Dawood Hercules Chemicals Limited 10.98% 20.91% After the detailed analysis, the study concludes that Fauji fertilizer has low debt / equity ratio as compared to Fauji Fertilizer Bin Qasim Limited and higher WACC. Which is consistent with our hypothesis that H0: The firm with high debt/ equity ratio should have less cost of capital. In the case of Fauji Fertilizer Bin Qasim Limited it has higher Debt / Equity ratio as compared to Dawood Hercules. So accordingly, its WACC is less than Dawood Hercules which is consistent with our Hypothesis. Further, when we compared Dawood Hercules with Fauji Fertilizer the study concludes that, though the debt / equity ratio of Fauji Fertilizer has greater Debt / Equity Ratio than of Dawood Hercules, but the WACC of Fauji Fertilizer is higher than Dawood Hercules. Which is not favorable according to hypothesis. This conclusion leads to the conclusion that while deciding about the capital structure, the firms always do not keep in mind the optimal capital structure which is subject to the availabil ity of funds. Conclusion The present study depicts that firms always keep in mind the tax shield. They usually prefer debt due to tax shield but some firms go with the more easiest way to raise capital, and the concept of optimal capital structure is set aside. In Pakistan, the interest rates are usually high as compared to developed countries. That is why, big firms usually prefer to raise funds through equity instead of debt. Since, financial institutions offer loans to profitable firms, at low rate keeping in view their credit rating and riskiness of operations, so these firms like fertilizer companies also include debt in their capital structure. The results are constructed with the literate review concluding that there is no consensus among researchers about the level of optimal capital structure because of variation in proxies used to measure the same attribute, variation in industry norms (size, location and technology), agency cost (management ownership and competence) etc. Further, maximization of s tock return for different firms is debatable.

Messiaen’s Quartet for the End of Time - Quator Pour Le Fin Du Temps Es

Messiaen’s Quartet for the End of Time - Quator Pour Le Fin Du Temps Technical and Interpretative Challenges Presented to Performers in Messiaen’s Quartet for the End of Time Olivier Messiaen (1908-1992) played a significant part in the evolution of twentieth-century music, influencing a number of other composers with his innovative compositional techniques. The Quartet for the End of Time, is not one of Messiaen’s typical works due to the circumstances in which it was composed (his main outputs were organ, orchestral and choral works), but it marks the start of the significant use of some of these techniques. In 1940, Messiaen was called up to serve in the army as a hospital orderly, but was soon captured by the Germans and taken to a prisoner-of-war camp. Here, suffering from food deprivation and extreme cold, he had the idea of composing a piece for the End of Time. There were four musicians on the camp – himself (a pianist), a violinist, a cellist and a clarinettist – and so he wrote a quartet. Performers of the work need to consider the circumstances under which the piece was composed and also the reaction it created at the first performance of it. This was in front of the entire prison camp in January 1941 where, says Messiaen, ‘never have I been listened to with such attention and understanding.’ Messiaen had no choice on what instruments the piece was written for, ‘the group of instruments†¦to large to allow the piano to express itself freely, yet too small to obtain†¦variety of timbre,’ and his way around this was to obtain ‘maximum variety of which they are capable.’ By exploiting each instrument in so many different ways to create different timbres, the technical challenges faced by the performers are endless. Musi... ...o performers), Quote 11: demonstrates the need to control the sound when there is a sudden change in articulation. Quote 12: demonstrates the need to be in control of the instrument when faced with an unusual and challenging technique – ‘col legno’ is to use the wooden side of the bow on the cello strings which is particularly difficult for control of intonation. Quote 13: demonstrates the need to be in control of intonation within the ensemble. This is the case in all sections of the Quatuor scored for two or more parts in octaves. Bibliography ed. Hill, Peter, â€Å"The Messiaen Companion† chapter entitled â€Å"The End of Time: a Biblical Theme in Messiaen’s Quatuor ,† (London: Faber and Faber 1995) Johnson, Robert Sherlaw, â€Å"Messiaen,† chapters entitled â€Å"Birdsong,† â€Å"Christianity and Symbolism† and â€Å"The Works of the War Years: Quatuor pour la Fin du Temps (1940-41),†

UOB Bank Advertisement

UOB Lady’s Card -â€Å"The men don’t get it† 1. 0 Introduction of the Company United Overseas Bank Limited (UOB) is a leading bank in Asia. It provides a wide range of financial services through its global network of over 500 offices in 19 countries and territories in Asia Pacific, Western Europe and North America, including banking subsidiaries in Singapore, Malaysia, Indonesia, Thailand and mainland China.UOB (Malaysia) offers an extensive range of commercial and personal financial services through its branches, subsidiaries and associate companies: commercial lending, investment banking, treasury services, trade services, cash management, home loans, credit cards, wealth management, general insurance and life assurance. UOB also plays an active role in the community, focusing on children, education and the arts. UOB has been established the annual UOB Heartbeat Run to raise funds for charity.Today, UOB is rated among the world’s top banks by Moodyâ€⠄¢s Investors Service, receiving B for financial strength, and AA1 and Prime-1 for long-term and short-term bank deposits respectively. UOB is proud to be the first to unveil the revamped UOB Lady’s Card in Malaysia. Besides sporting a new card face, the purpose of the advertisement shows that UOB Lady’s Card is staying relevant to the needs of modern women with new features.It is the first in the market to develop a mobile phone application, â€Å"Lady’s Soulmate† dedicated to ladies, which helps card members access privileges through Google maps and a directional guide based on AR technology. Consumers can download the Lady's Soulmate application from the Android Marketplace to compatible mobile phones. It will also be progressively made available on Apple App Store, Ovi Store by Nokia and Blackberry App World. The ad clearly show that the UOB Lady's Soulmate application marks a new era for the UOB Lady's Card, as it remains in touch with the progress o f women nd technology. The advertisement does show its effectiveness as the card was already available in Singapore, Malaysia and Thailand, has a current membership of over 500,000. The advertisement expected to attract more than 500,000 new lady users. The company claims that the UOB Lady’s Card is targeted to more than double by 2014, driving the continued growth of the bank’s card business in the region. 2. 0 Discussion of the Advertisement 2. 1 Target Market The revamped UOB Lady’s Card placed a strong emphasis on health, beauty, fashion, connectivity and discovery.This make over of the UOB Lady’s Card is timely as a group same gender consumers seek to strengthen the brand promised to valued card members. The ad targets young adult women, and they will buy products not only for them but to show their financial health in their lives. We acknowledge that today’s women are more independent financially, assertive in their choices, mobile and techno logy savvy to stay â€Å"connected†. The reason for the advertiser to choose this market segment is because female young adults may look for the requirement as stated before. 3. 0 Advertisement SourceThe ad focuses on two trendy lady’s high profile, smiling with full of satisfaction, public may easily attract by them who emotionally aroused. The two ladies show in an appropriate way to market the company’s credit card as they are looking relax and rejoice, their face expression and body language prompt the desire of women to obtain the credit card. It also shows that they are able to keep constant contact with privileges and deals via smartphone, the women looked grateful to get the information from their mobiles. Technology on tap is but one of the many benefits available to Lady’s Card members.The new UOB Lady’s Card proposition centres around providing a total financial and lifestyle solution which complements the modern woman who is constantly on the move from connectivity, discovery, fashion and money matters. 3. 1 Visual and Verbal Content Basically the kind of visual image used in ad is photographs. There is a few images show in different ways. The rectangular picture with blank background is composite â€Å"paste-up† of several images from various sources used, whereas the whole image of two ladies adopts â€Å"superimposed† over each other. The others small images place near to the related information.The roses for both types of credit cards seem to stand for women product. The corporate logos included in the design of credit card, the consumer already familiar with the logo. The car and branded stuffs symbolize exclusivity or luxury, visually depicted the financial strength for the group of target market they can have. From the ad, we can see that two young women wearing high heels with an eye catching smile. The clothes and adornments they are wearing look striking as they walk in confidence, simply r elated to self egoism. It seems like two best friends sharing the same privileges and deals from the credit card.The image shows their legs walk together depicted they shopping together, which also shows young women concern about social need. Many women become more financially independent and career orientated. The body language of the models in the ad seem like they don’t have financial worry. Although there are often claims of gender bias and the results have showed that women in general will have a much more impulsive buying behavior than that of their male counterpart. Through this natural disposition it will often hinder them from being able to ever becoming an efficient money saver.Thus, those offer deals in the ad may attract their attention. 3. 2 Semiotic Analysis It has bold print stating â€Å"If we had our way, it would be Wednesday everyday† and smaller print that promotes the offers of the credit card and targets women to purchase the related product and s ervice especially on Wednesday. The ad is implying that women in society now can take care of their financial, yet still targets them to purchase more by using the credit card. At the core of the UOB Lady’s Card popularity is the endearing philosophy of this female-only product, â€Å"The Men Don’t Get It. More than just a signature tagline, it is an acknowledgement of the financial strength and independence of women, and the freedom of choice that is available to them. Now, underpinned by technology and refreshed with a host of new privileges, the company seemed like confident that the Lady’s Card will continue to be preferred, extending their leadership in the female space, I would find this advertisement particularly interesting because it is promoting friendship, financial solidity, health and beauty standards in our society, women's roles as consumers which afford to pay and the graphics of the ad focuses on.It is promoting credit card that only for female , which have previously been viewed as women's products and it will also influences women to buy these products on men's behalf. The two models are wearing striking outfits and expensive adornments. This influence perpetuates the sociological role of women in society as financial takers, as well as encouraging them being active in caring about their appearance and their need to use health and beauty products. This ad clearly promotes the credit card which special designed only for female, that’s why the word stated there the men don’t get it†.The roses symbolized that the only attention of the company focus on the specific needs of women. They have taken a 360-degree approach in the Lady's Card makeover, leveraging our insights into women over the years and research around the region. 3. 3 Layout and Design The headline shows in an appropriate way to has three-quarters up the page or advertisement space. The advertiser position headline statement where it can be seen quickest, this can make sure the reader generally know what is all about.They avoid putting headlines at the very top of the space because the reader’s eye is naturally drawn to between two-thirds and three-quarters up the page or space, which is where the main benefit statement needs to be. The advertisement involves the reader in writing style of using the second and third person-‘you’ and ‘she’. Refer to the reader as ‘you' and ‘she’ in the description of the ad does for the customer to get them visualizing their own personal involvement. The advertiser describes the service as it affects them in a way that they will easily relate to it.This advertising can be defined as using â€Å"cool† tones. It is often referred to as a ‘Black Art', because it is mysterious but cheerful. 4. 0 Publication The advertiser has chosen the two most common print media are newspapers and magazines. Print media is important because it can reach such a large audience, and the great number of specialized publications enables businesses to focus in on a target audience with a specific set of characteristics. The advertiser picks the right time as the Malaysia Mega Sales start from July until September 2010. The consumers can use their Lady’s Card for exclusive privileges.NEWSPAPERS When deciding upon a newspaper in which to advertise, there are three physical criteria to consider: distribution, size, and audience. Newspapers are either daily or weekly, come in a standard or tabloid size, and reach nearly all of the reading public, which is estimated to be around 85-90 percent of the population. Because of the broad demographic reach of most newspapers it is difficult to target a specific audience; however, newspapers are effective in increasing awareness of a business' products and services in a specific geographical area.Types of ads placed in newspapers include: display ads, classified ads, public notes, and preprinted inserts. Newspaper ads have some flexibility in their size. For instance, the UOB ad only takes up half portion of a page, while others might span one or two full pages. Regardless of this flexibility, newspaper ads can only use limited special effects, such as font size and color. These limitations lead to advertising â€Å"clutter† in newspapers because all the ads look very similar. Therefore, advertisers must use original copy and headings to differentiate their ads from their competitors.This is why the advertiser show theirl exclusive shopping, dining and beauty privileges, and the latest technology, a mobile phone application called â€Å"Lady's Soulmate†. MAGAZINES With magazines an advertiser can focus in on a specific target audience. Audiences can be reached by placing ads in magazines which have well-defined geographic, demographic, or lifestyle focus. The advertiser has placing the ad in the localized edition of a national magazine. In addi tion to the above factors, it is also important to consider the nature of the magazine ad copy.Magazines allow elaborate graphics and colors, which give advertisers more creative options than do newspapers. Also, recent surveys have indicated that informative ads are the most persuasive. Therefore, it is important to include copy and art work that is direct and presents important product information to the consumer, such as how the product works, how it benefits the consumer, and where it can be purchased. Besides The Star, it also can be found in female magazine such as New Tide, July 2010.Those magazines are targeted towards young adult women interested in beauty, fashion and relationships. This advertisement is promoting both UOB Lady’s Classic and UOB Lady’s Platinum cards for women. 5. 0 Hierarchy Model Response The AIDA Model Attention The feature followed by ad agencies is AIDA, which acronym stands for Attention, Interest, Desire and Action. The first A equals getting the attention of the readers. The ad in the form of a headline-â€Å"Wednesday every day’’ has grab the attention as it perks the curiosity of readers.The images of the credit cards with the symbol pertain to the company introductory paragraph. The advertiser gets the attention of consumer immediately by using the Wednesday special offer deals; therefore readers will read the rest of the articles. The advertiser is generating an emotion, women walking in confidence with big smile and setting up a situation. UOB (Malaysia) became the first foreign bank to recognize the affluent female segment in Malaysia when it launched the UOB Lady's Card. The ad plays with fear and greed for a moment.These two emotions combined as a key because almost every women would be Interested and has a certain amount of greed (possess everything that they want) and also has fear (questioning what if they missed the chance to get all the great offer deals). The advertiser didn’t use the headline to play the biggest benefit. They choose to appear that not only true but also in an exclusive way. The ad plays on emotions in their headline; the two models address happiness and satisfaction, pump up their egos or show the luxury and branded items. The advertiser chooses the middle part to present the benefits in aspect of the credit card service.The readers may pay more attention on the â€Å"FREE† word which showed in the subhead lines. Interest After the advertiser got the consumer’s attention, they focus on building their interest and supporting what the ad told them thus far. The advertiser makes the reader really want the card but have to start a twinge of reality. Consumers may compare the benefits they offered with the competitors. The newly developed mobile application-â€Å"UOB Lady’s Soulmate App† based on AR technology, female young adults which consider as tech-savvy group may show their interest in the ads.Another way is that the advertiser building interest to include sub headlines throughout the copy. The readers will be more interest when there are a lot of offers with the â€Å"Cash Back† or ‘FREE† words on the sub headlines. Next, the reader embarks on the ever-challenging task of justifying her purchase; especially she wants to do a large purchase. In consumer’s interest section, the ad uses emotion to address the fact that this purchase is a good bargain, the right step, a sound decision, etc. In addition to that, the advertiser let the customer know what will happen if consumer purchase their service.This can be found in â€Å"With it in the bag, every lady gets what she wants, when she wants it†. Depending on this ad, the negative result might be the fact that she misses all those grand offers from the product service. She will have to struggle to get all the same stuffs but in more expensive price or other consequences without the credit card. â€Å"If we had our way, it would be Wednesday every day’’, implies that the consumers can enjoy spending every Wednesday. The goal here is to create a few statements that will cause the customer to say, Oh! I didn’t think of that.Desire The third step in AIDA indicates the desire to buy. This section is really turns on the charm. The ad is written to tug on the heartstrings in order to create that final desire to buy. Perhaps the biggest benefit of the ad is they can get â€Å"FREE Coach Bags & Accessories Every Day†. By using the â€Å"UOB Lady’s Soulmate App†, the interactive application is able to display the latest deals and offers within a 2km range of the card member's location and also contains a personal assistant feature to help connect members with people who are important to them.Customers will have all the information they need right at their fingertips. The advertisement turns deep down inside their consumer to have two desires. The first is the desire to use the convenience of connection that not just technology. The second is the desire to obtain more things and the most common reason is to get a free branded items. The 2010 Malaysia Mega Sale Carnival sweeps the nation up in a frenzied shopping fervor! This is the best time to pump them up and get them excited about the credit card service. They have not yet come to the justification stage where price might play a factor.While always, from the aspect of desire, the ad portrays the best and biggest benefits their customers will receive. It speaks to the joys of being able to relax and run an errand in the whole range of bargains of, the sub headlines of the article indicates that the customer can experience from restaurants, spas, facial service while doing their shopping of the day. Action The final A in AIDA stands for action. During the action phase of convincing, the ad gives them enough motivational cause to take action and buy. At the moment get to this poin t, the customers should have all the information they need.The company as the seller will have walked them through each step of the buying process and emotional journey to the point of purchase. A few ways to create action with the copy are: â€Å"Apply now and get 20 entries for your first minimum RM50 swipe within 30 days from your new card approval†, â€Å"the more you swipe, the better your chances! † The advertisement motivate the readers look forward to get better deals on that special day, which can be found in â€Å"Wednesday are simply wonderful when you have the new UOB Lady’s Card. † The point of the action phase is to get the readers moving. The advertisement ade them drool with the exclusive deals, answered all their questions via Dedicated Customer Service Line, filled them with benefit and the company don’t want to lose them at the end. 6. 0 Overall Opinion In personal view, the main message of this advertisement is prominent. The bi ggest part of the advert is the main benefit statement. This is the part that entices the reader to read on. The ad offers a single impressive benefit, quickly and simply. Research proves that where responses are required, the best adverts are those which offer an impressive, relevant benefit to the reader.This point cannot be stressed enough; the advertiser keep it quick, simple and to the point. More information has stated bottom of the ad, reader who wants to know more detail can read through there. Younger generations are extremely visually literate. The advertiser had thought about the vocabulary and language to use and clearly know their target audience. The ad has avoided any words or grammar that would not be found in the newspaper that the target group would read. Therefore message can be read in quick and easy to absorb. The ad has use a clear layout, clear fonts and clear language.They don’t distract the reader from the text by overlaying images or using fancy font s. They use simple language, avoid complicated words, and keep enough space around the text to attract attention to it. The advertiser also avoids cluttering the advert with fancy images, colours and backgrounds, which make it easy to read. The advertisement has incorporated something new. The Consumers can download the Lady's Soulmate application to compatible mobile phones. The ad clearly show that the UOB Lady's Soulmate application marks a new era for the UOB Lady's Card, as it remains in touch with the progress of women and technology.Consumers respond better and are more easily attracted initially to a concept that is new or original. If they've heard or seen it all before it will be no surprise that they take no notice at all. The advertisement induces reader to believe there's something in it for them right from the start. The advertiser has developed a proposition that is special or unique and emphasizes this. The revamped UOB Lady's Card also comes with a new card face for both UOB Lady's Classic and UOB Lady's Platinum cards. UOB Malaysia is the first foreign bank to recognize the affluent female segment in Malaysia when it launched the new UOB Lady's Card.The ad also states that they provide Wallet Guard coverage and Purchase Protection Plan for the purchases which make their service special. The Advertising Standards Authority or equivalent would prevent the advertiser from making overly extravagant claims anyway, but they still attempt to make their offer seem perfectly credible. 7. 0 Recommendations From the advertisement, the readers might feel the card only available in exclusive world as the car stands for luxury. Not all but some of the readers might feel that the exclusivity rewards, and special treatment reserved for a special few, not for them.The website or service line should explain further to those customers that misleading by the pictures. They can emphasize on the protection plan to place themselves a credible image. The words-† The men don’t get it† didn’t stated clearly that whether the male readers can apply this credit card for the lady. For male readers, they may think they can use this card without the offers which women interested at. The conditions should write clear, not that small which stated in the advertisement. I am not sure that buying branded items necessarily causes happiness to a woman.But many of them tend to believe the advertising; they may feel a let-down when their existing card does not bring the desired partner or other increase in status. When they have such expectation, buying a branded item would be necessarily, make them feel happy. More insidious is the indirect effect, namely that they have to work hard and go into debt to buy all this stuff. That, in my opinion, the debt hidden behind is what makes people unhappy. The company should come out a proper financial plan and clarify to the consumer before the consumer purchase their services.