James Romm s Dying Every Day Seneca At The Court Of Nero

James Romm’s Dying Every Day: Seneca at the Court of Nero follows the life of the philosopher Seneca, tutor to one of Rome’s most famous emperors. Seneca was a philosopher with a strict moral code, yet he worked for and with Nero on many of his heinous acts, either out of fear, desire for political favor and power, or both. As Romm explains, Seneca is a complex character, and the sources we have to draw upon are not always in agreement. The puzzle for historians is to piece together Seneca’s own writings, which rarely mention any real events or people, and connect them to the conflicting historical accounts of Seneca. Some say he was scheming and power-hungry, others say he was virtuous in spite of his amassing of wealth. Whatever the case, Dying Every Day attempts to take several historical sources and reconcile them into a single coherent story of Seneca’s time as one of Nero’s subjects and teachers. It would be impossible to talk about Seneca without also explaining the life of the emperor Nero. Seneca was brought out of exile back to Rome by Nero’s mother Agrippina specifically to tutor her son Nero. After a complicated series of incestual marriages, assassinations, and false accusations intended to manipulate the Senate, Nero ascends to the throne at the young age of 17. During his reign, he has his brother, mother, and wife killed, as each posed a threat to his absolute rule. Throughout this time, Seneca writes many speeches for Nero, often to excuse his behavior to

A Financial Perspective on Mergers and Acquisitions Free Essays

string(77) " transactions would not have occurred absent the threat of hostile takeover\." The Free Cash Flow Theory of Takeovers: A Financial Perspective on Mergers and Acquisitions and the Economy Michael C. Jensen Harvard Business School MJensen@hbs. edu  © Michael C. We will write a custom essay sample on A Financial Perspective on Mergers and Acquisitions or any similar topic only for you Order Now Jensen, 1987 â€Å"The Merger Boom†, Proceedings of a Conference sponsored by Federal Reserve Bank of Boston, Oct. 1987, pp. 102-143 This document is available on the Social Science Research Network (SSRN) Electronic Library at: http://papers. ssrn. com/ABSTRACT=350422 The Free Cash Flow Theory of Takeovers: A Financial Perspective on Mergers and Acquisitions and the Economy Michael C. Jensen* Harvard Business School MJensen@hbs. edu From, â€Å"The Merger Boom†, Proceedings of a Conference sponsored by Federal Reserve Bank of Boston, Oct. 1987, pp. 102-143 Economic analysis and evidence indicate the market for corporate control is benefiting shareholders, society, and the corporate form of organization. The value of transactions in this market ran at a record rate of about $180 billion per year in 1985 and 1986—47 percent above the 1981 record of $122 billion. The number of transactions with purchase prices exceeding one billion dollars was 27 of 3300 deals in 1986 and 36 of 3000 deals in 1985 (Grimm, 1985). There were only seven billion-dollar plus deals in total, prior to 1980. In addition to these takeovers, mergers, and leveraged buyouts, there were numerous corporate restructurings involving divestitures, spinoffs, and large stock repurchases for cash and debt. The gains to shareholders from these transactions have been huge. The gains to selling-firm shareholders from mergers and acquisition activity in the period 1977-86 total $346 billion (in 1986 dollars). 1 The gains to buying-firm shareholders are harder Estimated from data in Grimm (1986). Grimm provides total dollar values for all merger and acquisition deals for which there are publicly announced prices amounting to at least $500,000 or 10 percent of the firm and in which at least one of the firms was a U. S. company. Grimm also counts in its numerical totals deals with no publicly announced prices that it believes satisfy these criteria. I have assumed that the deals with no announced prices were on average equal to 20 percent of the size of the announced transactions and carried the same average premium. *Professor of Business Administration, Harvard Business School, and Professor of Finance and Business Administration, University of Rochester. The author is grateful for the research assistance of Michael Stevenson and the helpful comments by Sidney Davidson, Harry DeAngelo, Jay Light, Robert Kaplan, Nancy Macmillan, Kevin Murphy, Susan Rose-Ackerman, Richard Ruback, Wolf Weinhold, Toni Wolcott, and especially Armen Alchian. This research is supported in part by the Division of Research, Harvard Business School, and the Managerial Economics Research Center, University of Rochester. The analysis here draws heavily on that in Jensen (forthcoming 1988). 1 M. C. Jensen 2 1987 to estimate, and to my knowledge no one has done so yet, but I estimate that they would add at least another $50 billion to the total. These gains, to put them in perspective, equal 31 percent of the total cash dividends (valued in 1986 dollars) paid to investors by the entire corporate sector in the past decade. Corporate control transactions and the restructurings that often accompany them can be wrenching events in the lives of those linked to the involved organizations: the managers, employees, suppliers, customers and residents of surrounding communities. Restructurings usually involve major organizational change (such as shifts in corporate strategy) to meet new competition or market conditions, increased use of debt, and a flurry of recontracting with managers, employees, suppliers and customers. This activity sometimes results in expansion of resources devoted to certain areas and at other times in contractions involving plant closings, layoffs of top-level and middle managers and of staff and production workers, and reduced compensation. Change due to corporate restructuring requires people and communities associated with the organization to adjust the ways they live, work and do business. It is not surprising, therefore, that this change creates controversy and that those who stand to lose are demanding that something be done to stop the process. At the same time, shareholders in restructured corporations are clear-cut winners; in recent years restructurings have generated average increases in total market value of approximately 50 percent. Those threatened by the changes argue that corporate restructuring is damaging the U. S. economy, that this activity damages the morale and productivity of organizations and pressures executives to manage for the short term. Further, they hold that the value that restructuring creates does not come from increased efficiency and productivity; rather, the gains come from lower tax payments, broken contracts with Total dividend payments by the corporate sector, unadjusted for inflation, are given in Weston and Copeland (1986, p. 649). I extended these estimates to 1986. 2 M. C. Jensen 3 1987 managers, employees and others, and mistakes in valuation by inefficient capital markets. Since the benefits are illusory and the costs are real, they argue, takeover activity should be restricted. The controversy has been accompanied by strong pressure on regulators and legislatures to enact restrictions to curb activity in the market for corporate control. Dozens of congressional bills in the past several years have proposed new restrictions on takeovers, but as of August 1987, none had passed. The Business Roundtable, composed of the chief executive officers of the 200 largest corporations in the country, has pushed hard for restrictive legislation. Within the past several years the legislatures of New York, New Jersey, Maryland, Pennsylvania, Connecticut, Illinois, Kentucky, Michigan, Ohio, Indiana, Minnesota and Massachusetts have passed antitakeover laws. The Federal Reserve Board implemented new restrictions in early 1986 on the use of debt in certain takeovers. In all the controversy over takeover activity, it is often forgotten that only 40 (an all-time record) of the 3,300 takeover transactions in 1986 were hostile tender offers. There were 110 voluntary or negotiated tender offers (unopposed by management) and the remaining 3,100-plus deals were also voluntary transactions agreed to by management. This simple classification, however, is misleading since many of the voluntary transactions would not have occurred absent the threat of hostile takeover. You read "A Financial Perspective on Mergers and Acquisitions" in category "Essay examples" A major reason for the current outcry is that in recent years mere size alone has disappeared as an effective takeover deterrent, and the managers of many of our largest and least efficient corporations now find their jobs threatened by disciplinary forces in the capital markets. Through dozens of studies, economists have accumulated considerable evidence and knowledge on the effects of the takeover market. Most of the earlier work is well summarized elsewhere (Jensen and Ruback (1983); Jensen (1984); Jarrell, Brickley and M. C. Jensen 4 1987 Netter (1988)). Here, I focus on current aspects of the controversy. In brief, the previous work tells us the following: †¢ Takeovers benefit shareholders of target companies. Premiums in hostile offers historically exceed 30 percent on average, and in recent times have averaged about 50 percent. †¢ Acquiring-firm shareholders on average earn about 4 percent in hostile takeovers and roughly zero in mergers, although these returns seem to have declined from past levels. †¢ Takeovers do not waste credit or resources. Instead, they generate substantial gains: historically, 8 percent of the total value of both companies. †¢ Actions by managers that eliminate or prevent offers or mergers are most suspect as harmful to shareholders. †¢ Golden parachutes for top-level managers do not, on average, harm shareholders. †¢ The activities of takeover specialists (such as Icahn, Posner, Steinberg, and Pickens) benefit shareholders on average. †¢ Merger and acquisition activity has not increased industrial concentration. Over 1200 divestitures valued at $59. 9 billion occurred in 1986, also a record level (Grimm, 1986). †¢ Takeover gains do not come from the creation of monopoly power. Although measurement problems make it difficult to estimate the returns to bidders as precisely as the returns to targets,3 it appears the bargaining power of target managers, coupled with competition among potential acquirers, grants a large share of the acquisition benefits to selling shareholders. In addition, federal and state regulation of 3 See Jensen and Ruback (1983, pp. 18ff). M. C. Jensen 5 1987 tender offers appears to have strengthened the hand of target firms; premiums received by target-firm shareholders increased substantially after introduction of such regulation. 4 Some have argued that the gains to shareholders come from wealth reallocations from other parties and not from real increases in efficiency. Roll (1986) argues the gains to target firm shareholders come from acquiring firm shareholders, but the data are not consistent with this hypothesis. While the evidence on the returns to bidding firms is mixed, it does not indicate they systematically suffer losses; prior to 1980 shareholders of bidding firms earned on average about zero in mergers, which tend to be voluntary, and about 4 percent of their equity value in tender offers, which more often are hostile Jensen and Ruback (1983). These differences in returns are associated with the form of payment rather than the form of the offer: tender offers tend to be for cash and mergers tend to be for stock (Huang and Walkling, 1987). Some argue that bondholders in acquired firms systematically suffer losses as substantial amounts of debt are added to the capital structure. Asquith and Kim (1982) do not find this, nor do Dennis and McConnell (1986). The Dennis and McConnell study of 90 matched acquiring and acquired firms in mergers in the period 1962-80 shows that the values of bonds, preferred stock and other senior securities, as well as the common stock prices of both firms, increase around the merger announcement. Changes in the value of senior securities are not captured in measures of changes in the value of common stock prices summarized previously. Taking the changes in the value of senior securities into account, Dennis and McConnell find the average change in total dollar value is positive for both bidders and target firms. Shleiffer and Summers (1987) argue that some of the benefits earned by target and bidding firm shareholders come from the abrogation of explicit and implicit longterm contracts with employees. They point to highly visible recent examples in the airline See Jarrell and Bradley (1980), Nathan and O’Keefe (1986), however, provide evidence that this effect occurred in 1974, several years after the major legislation. M. C. Jensen 6 1987 industry, where mergers have been frequent and wages have been cut in the wake of deregulation. But given deregulation and free entry by low-cost competitors, the cuts in airline industry wages were inevitable and would have been accomplished in bankruptcy proceedings if not in negotiations and takeover-related crises. Medoff and Brown (1988) study this issue using data f rom Michigan. They find that both employment and wages are higher, not lower, after acquisition than would otherwise be expected; however, their sample consists largely of combinations of small firms. The Market for Corporate Control The market for corporate control is best viewed as a major component of the managerial labor market. It is the arena in which alternative management teams compete for the rights to manage corporate resources (Jensen and Ruback, 1983). Understanding this point is crucial to understanding much of the rhetoric about the effects of hostile takeovers. Takeovers generally occur because changing technology or market conditions require a major restructuring of corporate assets (although in some cases, takeovers occur because incumbent managers are incompetent). Such changes can require abandonment of major projects, relocation of facilities, changes in managerial assignments, and closure or sale of facilities or divisions. Managers often have trouble abandoning strategies they have spent years devising and implementing, even when those strategies no longer contribute to the organization’s survival, and it is easier for new top-level managers with no ties to current employees or communities to make changes. Moreover, normal organizational resistance to change commonly is lower early in the reign of new top-level managers. When the internal processes for change in large corporations are too slow, costly, and clumsy to bring about the required restructuring or change in managers efficiently, the capital markets do so through the M. C. Jensen 7 1987 market for corporate control. Thus, the capital markets have been responsible for substantial changes in corporate strategy. Causes of Current Takeover Activity A variety of political and economic conditions in the 1980s have created a climate where economic efficiency requires a major restructuring of corporate assets. These factors include: †¢ †¢ The relaxation of restrictions on mergers imposed by the antitrust laws. The withdrawal of resources from industries that are growing more slowly or that must shrink. †¢ Deregulation in the markets for financial services, oil and gas, transportation, and broadcasting, bringing about a major restructuring of those industries. †¢ Improvements in takeover technology, including more and increasingly sophisticated legal and financial advisers, and innovations in financing technology (for example, the strip financing commonly used in leveraged buyouts and the original issuance of high-yield non-investment-grade bonds). Each of these factors has contributed to the increase in total takeover and reorganization activity. Moreover, the first three factors (antitrust relaxation, exit, and deregulation) are generally consistent with data showing the intensity of takeover activity by industry. Table 1 indicates that acquisition activity in the period 1981-84 was highest in the oil and gas industry, followed by banking and finance, insurance, food processing, and mining and minerals. For comparison purposes, the table also presents data on industry value measured as a percentage of the total value of all firms. All but two of the industries, retail trade and transportation, represent a larger fraction of total takeover activity than their representation in the economy as a whole, indicating that the takeover market is concentrated in particular industries, not spread evenly throughout the corporate sector. M. C. Jensen 8 1987 Table 1 Intensity of Takeover Activity, by Industry, 1981-84 Percent Percent of Total of Total Takeover Corporate Industry Classification of Seller Market Valueb Activitya Oil and Gas 26. 13. 5 Banking and Finance 8. 8 6. 4 Insurance 5. 9 2. 9 Food Processing 4. 6 4. 4 Mining and Minerals Conglomerate Retail Trade Transportation Leisure and Entertainment Broadcasting Other a 4. 4 4. 4 3. 6 2. 4 2. 3 2. 3 39. 4 1. 5 3. 2 5. 2 2. 7 . 9 . 7 58. 5 Value of merger and acquisition transactions in the industry as a percentage of total takeover transactions for which valuation data are publicly reported. Source: W. T Grimm, Mergerstat Review (1984, p. 41). b Industry value as a percentage of the value of all firms, as of 12/31/84 Total value is measured as the sum of the market value of common equity for 4,305 companies, including 1,501 companies on the New York Stock Exchange, 724 companies on the American Stock Exchange, plus 2,080 companies in the over-the-counter market. Source: The Media General Financial Weekly, (December 31, 1984, p 17) Many sectors of the U. S. economy have been experiencing slower growth and, in some cases, even retrenchment. This phenomenon has many causes, including substantially increased foreign competition. The slow growth has meant increased takeover activity because takeovers play an important role in facilitating exit from an industry or activity. Changes in energy markets, for example, have required radical restructuring and retrenchment in that industry, and takeovers have played an important role in accomplishing these changes; oil and gas rank first in takeover activity, with twice their proportionate share of total activity. Managers who are slow to adjust to the new energy environment and slow to recognize that many old practices and strategies are no longer viable find that takeovers M. C. Jensen 9 1987 are doing the job for them. In an industry saddled with overcapacity, exit is cheaper to accomplish through merger and the orderly liquidation of marginal assets of the combined firms than by disorderly, expensive bankruptcy. The end of the competitive struggle in such an industry often comes in the bankruptcy courts, with the unnecessary destruction of valuable parts of organizations that could be used productively by others. Similarly, deregulation of the financial services market is consistent with the number 2 rank of banking and finance and the number 3 rank of insurance in table 1. Deregulation has also been important in the transportation and broadcasting industries. Mining and minerals has been subject to many of the same forces impinging on the energy industry including the changes in the value of the dollar. The development of innovative financing vehicles, such as high yield noninvestment-grade bonds (junk bonds), has removed size as a significant impediment to competition in the market for corporate control. Investment grade and high-yield debt issues combined were associated with 9. percent of all tender offer financing from January 1981 through September 1986 (Drexel Burnham Lambert, undated). Even though not yet widely used in takeovers, these new financing techniques have had important effects because they permit small firms to obtain resources for acquisition of much larger firms by issuing claims on the value of the venture (that is, the target firm’s assets) just as in any other corporate investment activity. Divestitures If assets are to mo ve to their most highly valued use, acquirers must be able to sell off assets to those who can use them more productively. Therefore, divestitures are a critical element in the functioning of the corporate control market and it is important to avoid inhibiting them. Indeed, over 1200 divestitures occurred in 1986, a record level (Mergerstat Review (1986)). This is one reason merger and acquisition activity has not increased industrial concentration. M. C. Jensen 10 1987 Divested plants and assets do not disappear; they are reallocated. Sometimes they continue to be used in similar ways in the same industry, and in other cases they are used in very different ways and in different industries. But in both cases they are moving to uses that their new owners believe are more productive. Finally, the takeover and divestiture market provides a private market constraint against bigness for its own sake. The potential gains available to those who correctly perceive that a firm can be purchased for less than the value realizable from the sale of its components provide incentives for entrepreneurs to search out these opportunities and to capitalize on them by reorganizing such firms into smaller entities. The mere possibility of such takeovers also motivates managers to avoid putting together uneconomic conglomerates and to break up existing ones. This is now happening. Recently many firms’ defenses against takeovers appear to have led to actions similar to those proposed by the potential acquirers. Examples are the reorganizations occurring in the oil and forest products industries, the sale of â€Å"crown jewels,† and divestitures brought on by the desire to liquidate large debts incurred to buy back stock or make other payments to stockholders. The basic economic sense of these transactions is often lost in a blur of emotional rhetoric and controversy. Managerial Myopia versus Market Myopia It has been argued that, far from pushing managers to undertake needed structural changes, growing institutional equity holdings and the fear of takeover cause managers to behave myopically and therefore to sacrifice long-term benefits to increase short-term profits. The arguments tend to confuse two separate issues: 1) whether managers are shortsighted and make decisions that undervalue future cash flows while overvaluing current cash flows (myopic managers); and 2) whether security markets are shortsighted and undervalue future cash flows while overvaluing near-term cash flows (myopic markets). M. C. Jensen 11 1987 There is little formal evidence on the myopic managers issue, but I believe this phenomenon does occur. Sometimes it occurs when managers hold little stock in their companies and are compensated in ways that motivate them to take actions to increase accounting earnings rather than the value of the firm. It also occurs when managers make mistakes because they do not understand the forces that determine stock values. There is much evidence inconsistent with the myopic markets view and no evidence that indicates it is true: (1) The mere fact that price-earnings ratios differ widely among securities indicates the market is valuing something other than current earnings. For example, it values growth as well. Indeed, the essence of a growth stock is that it has large investment projects yielding few short term cash flows but high future earnings and cash flows. The continuing marketability of new issues for start-up companies with little record of current earnings, the Genentechs of the world, is also inconsistent with the notion that the market does not value future earnings. (2) McConnell and Muscarella (1985) provide evidence that (except in the oil industry) stock prices respond positively to announcements of increased investment expenditures and negatively to reduced expenditures. Their evidence is also, inconsistent with the notion that the equity market is myopic, since it indicates that the market values spending current resources on projects that promise returns in the future. (3) The vast evidence on efficient markets, indicating that current stock prices appropriately incorporate all currently available public information, is also inconsistent with the myopic markets hypothesis. Although the evidence is not literally 100 percent in support of the efficient market hypothesis, no proposition in any of the social sciences is better documented. 5 For an introduction to the literature and empirical evidence on the theory of efficient markets, see Elton and Gruber (1984, Chapter 15, p. 375ff), and the 167 studies referenced in the bibliography. For some anomalous evidence on market efficiency, see Jensen (1978). For recent criticisms of the efficient market hypothesis see Shiller (1981a; 1981b), Marsh and Merton (1983; 1986) demonstrate that the Shiller 5 M. C. Jensen 12 1987 (4) Recent versions of the myopic markets hypothesis emphasize increases in the amount of institutional holdings and the pressure funds managers face to generate high quarterly returns. It is argued that these pressures on institutions are a major cause of pressures on corporations to generate high current quarterly earnings. The institutional pressures are said to lead to increased takeovers of firms, because institutions are not loyal shareholders, and to decreased research and development (RD) expenditures. It is hypothesized that because RD expenditures reduce current earnings, firms making them are more likely to be taken over, and that reductions in RD are leading to a fundamental weakening of the corporate sector of the economy. A study of 324 firms by the Office of the Chief Economist of the SEC (1985a) finds substantial evidence that is inconsistent with this version of the myopic markets argument. The evidence indicates the following: †¢ Increased institutional stock holdings are not associated with increased takeovers of firms. †¢ Increased institutional holdings are not associated with decreases in RD expenditures. †¢ †¢ Firms with high RD expenditures are not more vulnerable to takeovers. Stock prices respond positively to announcements of increases in RD expenditures. Moreover, total spending on RD is increasing concurrent with the wave of merger and acquisition activity. Total spending on RD in 1984, a year of record acquisition activity, increased by 14 percent according to Business Week’s annual survey. This represented â€Å"the biggest gain since RD spending began a steady climb in tests depend critically on whether, contrary to generally accepted financial theory and evidence, the future levels of dividends follow a stationary stochastic process. Merton (1985) provides a discussion of the current state of the efficient market hypothesis and concludes (p. 0), â€Å"In light of the empirical evidence on the nonstationarity issue, a pronouncement at this moment that the rational market theory should be discarded from the economic paradigm can, at best, be described as ‘premature’. † M. C. Jensen 13 1987 the late 1970’s. † All industries in the survey increased RD spending with the exception of steel. In addition, RD spending increased from 2 percent of sales, where it had been for five years, to 2. 9 percent. In 1985 and 1986, two more record years for acquisition activity, RD also set new records. RD spending increased by 10 percent (to 3. 1 percent of sales) in 1985, and in 1986, RD spending again increased by 10 percent to $51 billion (3. 5 percent of sales), in a year when total sales decreased by 1 percent. 6 Bronwyn Hall (1987), in a detailed study of all U. S. manufacturing firms in the years 1976-85, finds in approximately 600 acquisitions that firms that are acquired do not have higher RD expenditures (measured by the ratio of RD to sales) than firms in the same industry that are not acquired. Also, she finds that â€Å"firms involved in mergers showed no difference in their pre- and post-merger RD performance over those not so involved. † I know of no evidence that supports the argument that takeovers reduce RD expenditures, even though this is a prominent argument among many of those who favor restrictions on takeovers. Free Cash Flow Theory More than a dozen separate forces drive takeover activity, including such factors as deregulation, synergies, economies of scale and scope, taxes, managerial incompetence, and increasing globalization of U. S. markets. 7 One major cause of takeover activity, the gency costs associated with conflicts between managers and 6 The â€Å"RD Scoreboard† is an annual survey, covering companies that account for 95 percent of total private-sector RD expenditures. The three years referenced here can be found in â€Å"RD Scoreboard: Reagan Foreign Rivalry Light a Fire Under Spending,† Business Week, (, July 8, 1985, p. 86 f f. ); â€Å"RD Scoreboard: Now, RD is Corporate America’s Answer to Japan Inc. ,† Business Week, (, June 23, 1986, p. 134 ff. ); and â€Å"RD Scoreboard: Research Spending is Building Up to a Letdown,† Business Week, (, June 22, 1987, p. 39 ff. ). In 1984 the survey covered 820 companies; in 1985, it covered 844 companies; in 1986, it covered 859 companies. 7 Roll (1988) discusses a number of these forces. M. C. Jensen 14 1987 shareholders over the payout of free cash flow,8 has received relatively little attention. Yet it has played an important role in acquisitions over the last decade. Managers are the agents of shareholders, and because both parties are selfinterested, there are serious conflicts between them over the choice of the best corporate strategy. Agency costs are the total costs that arise in such cooperative arrangements. They consist of the costs of monitoring managerial behavior (such as the costs of producing audited financial statements and devising and implementing compensation plans that reward managers for actions that increase investors’ wealth) and the inevitable costs that are incurred because the conflicts of interest can never be resolved perfectly. Sometimes these costs can be large, and when they are, takeovers can reduce them. Free Cash Flow and the Conflict Between Managers and Shareholders Free cash flow is cash flow in excess of that required to fund all of a firm’s projects that have positive net present values when discounted at the relevant cost of capital. Such free cash flow must be paid out to shareholders if the firm is to be efficient and to maximize value for shareholders. Payment of cash to shareholders reduces the resources under managers’ control, thereby reducing managers’ power and potentially subjecting them to the monitoring by the capital markets that occurs when a firm must obtain new capital. Financing projects internally avoids this monitoring and the possibility that funds will be unavailable or available only at high explicit prices. Managers have incentives to expand their firms beyond the size that maximizes shareholder wealth. 9 Growth increases managers’ power by increasing the resources This discussion is based on Jensen (1986a). Gordon Donaldson (1984), in a detailed study of 12 large Fortune 500 firms, concludes that managers of these firms were not driven by maximization of the value of the firm, but rather by the maximization of â€Å"corporate wealth. He defines corporate wealth as â€Å"the aggregate purchasing power available to management for strategic purposes during any given planning period†¦. this wealth consists of 9 8 M. C. Jensen 15 1987 under their control. In addition, changes in management compensation are positively related to growth. 10 The tendency of firms to reward middle managers through promotion rather than year-to-year bonu ses also creates an organizational bias toward growth to supply the new positions that such promotion-based reward systems require (Baker, 1986);. The tendency for managers to overinvest resources is limited by competition in the product and factor markets that tends to drive prices toward minimum average cost in an activity. Managers must therefore motivate their organizations to be more efficient in order to improve the probability of survival. Product and factor market disciplinary forces are often weaker in new activities, however, and in activities that involve substantial economic rents or quasi-rents. 1 Activities yielding substantial economic rents or quasi-rents are the types of activities that generate large amounts of free cash flow. In these situations, monitoring by the firm’s internal control system and the market for corporate control are more important. Conflicts of interest between shareholders and managers over payout policies are especially severe when the organization generates substantial free cash flow. The problem is how to motivate managers to disgorge the cash rather than invest it below the cost of capital or waste it through organizational inefficiencies. Myers and Majluf (1984) argue that financial flexibility (unused debt capacity and internally generated funds) is desirable when a firm’s managers have better information about the firm than outside investors. Their arguments assume that managers act in the best interest of shareholders. The arguments offered here imply the stocks and flows of cash and cash equivalents (primarily credit) that management can use at its discretion to implement decisions involving the control of goods and services† (p. 3, emphasis in original). In practical terms it is cash, credit, and other corporate purchasing power by which management commands goods and services† (p. 22). 10 Where growth is measured by increases in sales. See Murphy (1985). This positive relationship between compensation and sales growth does not imply, although it is consistent with, causality. 11 Rents are returns in excess of the opportunity cost of the permanent resources in the activity. Quasirents are return s in excess of the opportunity cost of the short-lived resources in the activity. M. C. Jensen 16 1987 that such flexibility has costs; financial flexibility in the form of free cash flow (including both current free cash in the form of large cash balances, and future free cash flow reflected in unused borrowing power) provides managers with greater discretion over resources that is often not used in the shareholders’ interests. Therefore, contrary to Myers and Majluf, the argument here implies that eventually the agency costs of free cash flow cause the value of the firm to decline with increases in financial flexibility. The theory developed here explains (1) how debt-for-stock exchanges reduce the organizational inefficiencies fostered by substantial free cash flow; (2) how debt can substitute for dividends; (3) why â€Å"diversification† programs are more likely to be associated with losses than are expansion programs in the same line of business; (4) why mergers within an industry and liquidation-motivated takeovers will generally create larger gains than cross-industry mergers; (5) why the factors stimulating takeovers in such diverse businesses as broadcasting, tobacco, cable systems and oil are essentially identical; and (6) why bidders and some targets tend to show abnormally good performance prior to takeover. The Role of Debt in Motivating Organizational Efficiency The agency costs of debt have been widely discussed (Jensen and Meckling (1976); Smith and Warner (1979)), but, with the exception of the work of Grossman and Hart (1980), the benefits of debt in motivating managers and their organizations to be efficient have largely been ignored. Debt creation, without retention of the proceeds of the issue, enables managers effectively to bond their promise to pay out future cash flows. Thus, debt can be an effective substitute for dividends, something not generally recognized in the corporate finance literature. 12 By issuing debt in exchange for stock, Literally, principal and interest payments are substitutes for dividends. Dividends and debt are not perfect substitutes, however, because interest is tax-deductible at the corporate level and dividends are not. 12 M. C. Jensen 17 1987 anagers bond their promise to pay out future cash flows in a way that simple dividend increases do not. In doing so, they give shareholder-recipients of the debt the right to take the firm into bankruptcy court if they do not keep their promise to make the interest and principal payments. 13 Thus, debt reduces the agency costs of free cash flow by reducing the cash flow available for spending at the discretion of managers. These control effects of debt are a potential determinant of capital structure. Managers with substantial free cash flow can increase dividends or repurchase stock and thereby pay out current cash that would otherwise be invested in low-return projects or wasted. This payout leaves managers with control over the use of future free cash flows, but they can also promise to pay out future cash flows by announcing a â€Å"permanent† increase in the dividend. 14 Because there is no contractual obligation to make the promised dividend payments, such promises are weak. Dividends can be reduced by managers in the future with little effective recourse available to shareholders. The fact that capital markets punish dividend cuts with large stock price reductions (Charest (1978); Aharony and Swary (1980)) can be interpreted as an equilibrium market response to the agency costs of free cash flow. Brickley, Coles and Soo Nam (1987) find that firms that regularly pay extra dividends appear to have positive free cash flow. In comparison with a control group they have significantly Rozeff (1982) and Easterbrook (1984b) argue that regular dividend payments can be effective in reducing agency costs with managers by assuring that managers are forced more frequently to subject themselves and their policies to the discipline of the capital markets when they acquire capital. 14 Interestingly, Graham and Dodd (1951, Chapters 32, 34 and 36) in their treatise, Security Analysis, place great importance on the dividend payout in their famous valuation formula: V=M(D+. 33E). (See p. 454. ) V is value, M is the earnings multiplier when the dividend payout rate is a â€Å"normal two-thirds of earnings,† D is the expected dividend, and E is expected earnings. In their formula, dividends are valued at three times the rate of retained earnings, a proposition that has puzzled many students of modern finance (at least of my vintage). The agency cost of free cash flow that leads to over retention and waste of shareholder resources is consistent with the deep suspicion with which Graham and Dodd viewed the lack of payout. Their discussion (chapter 34) reflects a belief in the tenuous nature of the future benefits of such retention. Although they do not couch the issues in terms of the conflict between managers and shareholders, the free cash flow theory explicated here implies that their beliefs, sometimes characterized as a preference for â€Å"a bird in the hand is worth two in the bush,† were perhaps well founded. 13 M. C. Jensen 18 1987 igher cash plus short-term investments, and earnings plus depreciation, relative to their total assets. They also have significantly lower debt-to-equity ratios. The issuance of large amounts of debt to buy back stock sets up organizational incentives to motivate managers to pay out free cash flow. In addition, the exchange of debt for stock helps managers overcome the normal organizational resistance to retrenchment that the payout of free cash flow often requires. The threat of failure to make debt-service payments serves as a strong motivating force to make such organizations more efficient. Stock repurchase for debt or cash also has tax advantages. Interest payments are tax-deductible to the corporation, that part of the repurchase proceeds equal to the seller’s tax basis in the stock is not taxed at all, and prior to 1987 tax rates on capital gains were favorable. Increased leverage also has costs. As leverage increases, the usual agency costs of debt, including bankruptcy costs, rise. One source of these costs is the incentive to take on projects that reduce total firm value but benefit shareholders through a transfer of wealth from bondholders. These costs put a limit on the desirable level of debt. The optimal debt/equity ratio is the point at which firm value is maximized, the point where the marginal costs of debt just offset the marginal benefits. The debt created in a hostile takeover (or takeover defense) of a firm suffering severe agency costs of free cash flow need not be permanent. Indeed, sometimes â€Å"overleveraging† such a firm is desirable. In these situations, leveraging the firm so highly that it cannot continue to exist in its old form yields benefits by providing motivation for cuts in expansion programs and the sale of divisions that are more valuable outside the firm. The proceeds are used to reduce debt to a more normal or permanent level. This process results in a complete rethinking of the organization’s strategy and structure. When it is successful, a much leaner, more efficient, and competitive organization results. M. C. Jensen 19 1987 The control hypothesis does not imply that debt issues will always have positive control effects. For example, these effects will not be as important for rapidly growing organizations with large and highly profitable investment projects but no free cash flow. Such organizations will have to go regularly to the financial markets to obtain capital. At these times the markets have an opportunity to evaluate the company, its management, and its proposed projects. Investment bankers and analysts play an important role in this monitoring, and the market’s assessment is made evident by the price investors pay for the financial claims. The control function of debt is more important in organizations that generate large cash flows but have low growth prospects, and it is even more important in organizations that must shrink. In these organizations the pressure to waste cash flows by investing them in uneconomic projects is most serious. Evidence from Financial Transactions Free cash flow theory helps explain previously puzzling results on the effects of various financial transactions. Smith (Smith, 1986, tables 1 to 3) summarizes more than 20 studies of stock price changes at announcements of transactions that change capital structure as well as various other dividend transactions. These results and those of others are presented in table 2. For firms with positive free cash flow, the theory predicts that stock prices will increase with unexpected increases in payouts to shareholders and decrease with unexpected decreases in payouts. It also predicts that unexpected increases in demand for funds from shareholders via new issues will cause stock prices to fall. The theory also predicts stock prices will increase with increasing tightness of the constraints binding the payout of future cash flow to shareholders and decrease with reductions in the tightness of these constraints. These predictions do not apply to those firms with more profitable projects than cash flow to fund them. M. C. Jensen 20 1987 The predictions of free cash flow theory are consistent with all but three of the 32 estimated abnormal stock price changes summarized in table 2, and one of the inconsistencies is explained by another phenomenon. Panel A of table 2 shows that stock prices rise by a statistically significant amount with announcements of the initiation of cash dividend payments, increases in dividends and specially designated dividends, and fall by a statistically significant amount with decreases in dividend payments. (All coefficients in table 2 are significantly different from zero unless noted with an asterisk. ) Panel B shows that security sales and retirements that raise cash or pay out cash and simultaneously provide offsetting changes in the constraints bonding the payout of future cash flow are all associated with returns that are insignificantly different from zero. The insignificant return on retirement of debt fits the theory because the payout of cash is offset by an equal reduction in the present value of promised future cash payouts. If debt sales are not associated with changes in the expected investment program, the insignificant return on announcement of the sale of debt and preferred also fits the theory. The acquisition of new funds with debt or preferred stock is offset exactly by a commitment bonding the future payout of cash flows of equal present value. If the funds acquired through new debt or preferred issues are invested in projects with negative net present values, the abnormal stock price change will be negative. If they are invested in projects with positive net present values, the abnormal stock price change will be positive. Sales of convertible debt and preferred securities are associated with significantly negative stock price changes (panel C). These security sales raise cash and provide little effective bonding of future cash flow payments; when the stock into which the debt is convertible is worth more than the face value of the debt, management has incentives to call the convertible securities and force conversion to common. M. C. Jensen 21 1987 Panel D shows that, with one exception, security retirements that pay out cash to shareholders increase stock prices. The price decline associated with targeted large block repurchases (often called greenmail) is highly likely to be due to the reduced probability that a takeover premium will be realized. These transactions are often associated with standstill agreements in which the seller of the stock agrees to refrain from acquiring more stock and from making a takeover offer for some period into the future (Mikkelson and Ruback (1985; 1986); Dann and DeAngelo (1983); and Bradley and Wakeman (1983);). Panel E summarizes the effects of security sales and retirements that raise cash and do not bond future cash flow payments. Consistent with the theory negative abnormal returns are associated with all such changes, although the negative returns associated with the sale of common through a conversion-forcing call are statistically insignificant. Panel F shows that all exchange offers or designated use security sales that increase the bonding of payout of future cash flows result in significantly positive increases in common stock prices. These include stock repurchases and exchange of debt or preferred for common, debt for preferred, and income bonds for preferred. The twoday gains range from 21. 9 percent (debt for common) to 1. 6 percent for income bonds and 3. 5 percent for preferred. 15 The theory predicts that transactions with no cash flow and no change in the bonding of payout of future cash flows will be associated with returns that are insignificantly different from zero. Panel G of table 2 shows that the evidence is mixed; 15 The two-day returns of exchange offers and self-tenders can be affected by the offer. However, if there are no real effects or tax effects, and if all shares are tendered to a premium offer, then the stock price will be unaffected by the offer and its price effects are equivalent to those of a cash dividend. Thus, when tax effects are zero and all shares are tendered, the two-day returns are appropriate measures of the real effects of the exchange. In other cases the correct returns to be used in these transactions are those covering the period from the day prior to the offer announcement to the day after the close of the offer (taking account of the cash payout). See, for example, Rosenfeld (1982), whose results for the entire period are also consistent with the theory. M. C. Jensen 22 1987 he returns associated with exchange offers of debt for debt are significantly positive and those for designated-use security sales are insignificantly different from zero. All exchanges and designated-use security sales that have no cash effects but reduce the bonding of payout of future cash flows result, on average, in significant decreases in stock prices. These transactions include the exchange of common for debt or preferred or preferred for debt, or the replacement of debt with convertible debt and are summarized in Panel H. The two-day losses range from 7. 7 percent (preferred for debt) to 1. 1 percent (common for debt). In summary, the results in table 2 are remarkably consistent with free cash flow theory hich predicts that, except for firms with profitable unfunded investment projects, stock prices will rise with unexpected increases in payouts to shareholders (or promises to do so) and will fall with reductions in payments or new requests for funds from shareholders (or reductions in promises to make future payments). Moreover, the size of the value changes seems to be positively related to the change in the tightness of the commitment bonding the payment of future cash flows. For example, the effects of debtfor-preferred exchanges are smaller tha n the effects of debt-for-common exchanges. Tax effects can explain some of the results summarized in table 2, but not all. For example, the exchange of preferred for common, or replacement of debt with convertible debt, has no tax effects and yet is associated with price increases. The last column of table 2 denotes whether the individual coefficients are explainable by pure corporate tax effects. The tax theory hypothesizes that all unexpected changes in capital structure that decrease corporate taxes increase stock prices and vice versa. 16 Therefore, increases in dividends and reductions of debt interest should cause stock prices to fall, and vice versa. 17 Fourteen of the 32 coefficients are inconsistent with the corporate tax See, however, Miller (1977) who argues that allowing for personal tax effects and the equilibrium response of firms implies that no tax effects will be observed. 7 Ignoring potential tax effects due to the 85 percent exclusion of dividends received by corporations on holdings of preferred stock. 16 M. C. Jensen 23 1987 Table 23 Summary of Two-Day Average Abnormal Stock Returns Associated with the Announcement of Various Dividend and Capital Structure Transactionsa Average Sample Size Average Abnormal Return (Percent) Free Cash Flow Theory Agreement with Tax Predicted Agreement Theory Sign with Theory? Type of Transaction A. Dividend changes that change the cash paid to shareholders Dividend initiation1 Dividend increase2 Specially designated dividend Dividend decrease2 3 Security Issued Security Retired 160 281 164 48 3. 7% 1. 0 2. 1 -3. 6 + + + – es yes yes yes no no no no B. Security sales (that raise cash) and retirements (that pay out cash) that simultaneously provide offsetting changes in the constraints bonding future payment of cash flows Security sale (industrial) 4 Security sale (utility) 5 Security sale (industrial) 6 Security sale (utility) Call8 7 debt debt preferred preferred none none none none none debt none none none common common common common 248 140 28 251 133 74 54 9 147 182 15 68 – 0. 2* -0. 1* -0. 1* -0. 1* -0. 1* -2. 1 -1. 4 -1. 6 15. 2 3. 3 1. 1 -4. 8 0 0 0 0 0 – – – + + + + yes yes yes yes yes yes yes yes yes yes yes no b no no yes yes no no no no yes yes yes no b C. Security sales that raise cash and bond future cash flow payments only minimally Security sale (industrial) 4 conv. debt 7 Security sale (industrial) conv. preferred 7 Security sale (utility) conv. preferred D. Security retirements that pay out cash to shareholders Self tender offer 9 Open market purchase10 Targeted small holdings11 Targeted large block repurchase12 none none none none M. C. Jensen 24 1987 E. Security sales or calls that raise cash and do not bond future cash flow payments Security sale (industrial) 13 common none Security sale (utility)14 common none Conversion-forcing call15 common conv. preferred Conversion-forcing call15 common conv. debt F. Exchange offers, or designated use security sales that increase the bonding of payout of future cash debt common Designated use security sale16 Exchange offer 17 debt common 17 Exchange offer preferred common 17 Exchange offer debt preferred Exchange offer 18 income bonds preferred G. Transaction with no change in bonding payout of future cash flows Exchange offer 19 debt 20 Designated use security sale debt debt debt 215 405 57 113 flows 45 52 10 24 18 36 96 -3. 0 -0. 6 -0. 4* -2. 1 21. 9 14. 0 8. 3 3. 5 1. 6 0. 6 0. 2* -2. 4 -2. 6 -7. 7 -4. 2 -1. 1 – – – – + + + + + 0 0 – – – – – yes yes no yes yes yes yes yes yes no yes yes yes yes yes yes yes yes yes yes yes yes no yes yes no yes yes no yes yes yes H. Exchange offers, or designated use security sales that decrease the bonding of payout of future cash flows Security sale 20 conv. debt debt 15 Exchange offer 17 common preferred 23 17 Exchange offer preferred debt 9 20 Security sale common debt 12 Exchange offer 21 common debt 81 a Returns are weighted averages, by sample size, of the returns reported by the respective studies All returns are significantly different from zero unless noted otherwise by *. b Explained by the fact that these transactions are frequently associated with the termination of an actual or expected control bid. The price decline appears to reflect the loss of an expected control premium. Source: 1 Asquith and Mullins (1983). 2 Charest (1978); Aharony and Swary (1980). 3 From Brickley (1983). Dann and Mikkelson (1984); Eckbo (1986); Mikkelson and Partch (1986). 5 Eckbo (1986). 6 Linn and Pinegar (1985); Mikkelson and Partch (1986). 7 Linn and Pinegar (1985). 8 Vu (1986). 9 Dann (1981); Masulis (1980); Vermaelen (1981); Rosenfeld (1982). 10 Dann (1980); Vermaelen (1981). 11 Bradley and Wakeman (1983). 12 Calculated by Smith (1986), table 4, from Dann and DeAngelo (1983); Bradley and Wakeman (1983). 13 Asquith and Mullins (1986); Kolodny and Suhler (1985); Masulis and Korwar (Korwar and Masulis); Mikkelson and Partch (1986). 14 Asquith and Mullins (1986); Masulis and Korwar (1986); Pettway and Radcliffe (1985). 15 Mikkelson (1981). 16 Others with more than 50% debt Masulis (1980). 17 Masulis (1983). These returns include announcement days of both the original offer and, for about 40 percent of the sample, a second announcement of specific terms of the exchange 18 McConnell and Schlarbaum (1981). 19 Dietrich (1984). 20Eckbo (1986); Mikkelson and Partch (1986). 21Rogers and Owers (1985); Peavy and Scott (1985); Finnerty (1985). (Allen, 1987; Auerbach and Reishus, 1987; Biddle and Lindahl, 1982; Bradley, Desai, and Kim, 1983; Bradley and Rosensweig, 1986; Comment and Jarrell, 1986; 1986; Crovitz, 1985; Easterbrook, 1984a; Eckbo, 1985; 1985; Fama and Jensen, 1983a, b, 1985; Franks, Harris, and Mayer, 1987; Golbe and White, 1987; Herzel, Colling, and Carlson, 1986; Holderness and Sheehan, 1985; 1985; Jarrell, Poulsen, and Davidson, 1985; Jensen, 1985, 1986b; Jensen and Smith, 985; Kaplan and Roll, 1972; Koleman, 1985; Lambert and Larcker, 1985; Malatesta and Walkling, 1985; Martin, 1985; Morrison, 1982; Mueller, 1980; Myers, 1977; Office of the Chief Economist, 1984, 1985b, 1986; Pau lis, 1986; Ravenscraft and Scherer, 1985a, b; Ricks, 1982; Ricks and Biddle, 1987; Ruback, 1988; Ryngaert, 1988; Shoven and Simon, 1987; Sunder, 1975; You et al. ) Jensen 25 1987 hypothesis. Simple signaling effects, where the payout of cash signals the lack of present and future investments promising returns in excess of the cost of capital, are also inconsistent with the results-for example, the positive stock price changes associated with dividend increases and stock repurchases. If anything, the results in table 2 seem too good, for two reasons. The returns summarized in the table do not distinguish firms that have free cash flow from those that do not have free cash flow, yet the theory says the returns to firms with no free cash flow will behave differently from those which do. In addition, only unexpected changes in cash payout or the tightness of the commitments bonding the payout of future free cash flow should affect stock prices. The studies summarized in table 2 do not, in general, control for the presence or absence of free cash flow or for the effects of expectations. If free cash flow effects are large and if firms on average are in a positive free cash flow position, the predictions of the theory will hold for the simple sample averages. To see how the agency costs of free cash flow can be large enough to show up in the uncontrolled tests summarized in table 2, consider the graph of equilibrium firm M. C. Jensen 26 1987 value and free cash flow in figure 1. Figure 1 portrays a firm whose manager values both firm value (perhaps because stock options are part of the compensation package) and free cash flow. The manager, however, is willing to trade them off according to the given indifference curves. By definition, firm value reaches a maximum at zero free cash flow. The point (V*, F*) represents the equilibrium level of firm value and free cash flow for the manager. It occurs at a positive level of free cash flow and at a point where firm value is lower than the maximum possible. The difference Vmax – V* is the agency cost of free cash flow. Because of random factors and adjustment costs, firms will deviate temporarily from the optimal F*. The dashed line in figure 1 portrays a hypothetical rectangular distribution of free cash flow in a cross section of firms under the assumption that the typical firm is run by managers with preferences similar to those portrayed by the given indifference curves. Changes in free cash flow (or the tightness of constraints binding its payout) will be positively related to the value of the firm only for the minority of firms in the cross section with negative free cash flow. These are the firms lying to the left of the origin, 0. The relation is negative for all firms in the range with positive free cash flow. Given the hypothetical rectangular distribution of firms in figure 1, the majority of firms will display a negative relation between changes in free cash flow and changes in firm value. As a result the average price change associated with movements toward (V*, F*) will be negatively related to changes in free cash flow. If the effects are so pervasive that they show up strongly in the crude tests of table 2, the waste due to agency problems in the corporate sector is probably greater than most scholars have thought. This waste is one factor contributing to the high level of activity in the corporate control market over the past decade. More detailed tests of the propositions that control for growth prospects and expectations will be interesting. M. C. Jensen 27 1987 Evidence from Going-Private and Leveraged Buyout Transactions Many of the benefits in going-private and leveraged buyout transactions seem to be due to the control function of debt. These transactions are creating a new organizational form that competes successfully with the open corporate form because of advantages in controlling the agency costs of free cash flow. In 1985, going-private and leveraged buyout transactions totaled $37. 4 billion and represented 32 percent of the value of all public acquisitions. 18 Most studies have shown that premiums paid for publicly held firms average over 50 percent,19 but in 1985 the premiums for publicly held firms were 31 percent (Grimm, 1985). Leveraged buyouts are frequently financed with high debt; 10:1 ratios of debt to equity are not uncommon, and they average 5. 5:1 (Schipper and Smith (1986); Kaplan (1987); and DeAngelo and DeAngelo (1986)). Moreover, the use of â€Å"strip financing† and the allocation of equity in the deals rev eal a sensitivity to incentives, conflicts of interest, and bankruptcy costs. Strip financing, the practice in which investors hold risky nonequity securities in approximately equal proportions, limits the conflict of interest among such securityholders and therefore limits bankruptcy costs. Top managers and the sponsoring venture capitalists hold disproportionate amounts of equity. A somewhat oversimplified example illustrates the organizational effects of strip financing. Consider two firms identical in every respect except financing. Firm A is entirely financed with equity, and Firm B is highly leveraged with senior subordinated debt, convertible debt, and preferred as well as equity. Suppose Firm B securities are sold only in strips; that is, a buyer purchasing a certain percentage of any security must purchase the same percentage of all securities, and the securities are â€Å"stapled† together See W. T. Grimm, Mergerstat Review (1985, Figs. 29, 34 and 38). See DeAngelo, DeAngelo and Rice (1984), Lowenstein (1985), and Schipper and Smith (1986). Lowenstein also mentions incentive effects of debt but argues tax effects play a major role in explaining the value increase. 19 18 M. C. Jensen 28 1987 o they cannot be separated later. Security holders of both firms have identical unlevered claims on the cash flow distribution, but organizationally the two firms are very different. If Firm A managers withhold dividends to invest in value-reducing projects or if they are incompetent, the shareholders must use th e clumsy proxy process to change management or policies. In Firm B, strip holders have recourse to remedial powers not available to the equity holders of Firm A. Each Firm B security specifies the rights its holder has in the event of default on its dividend or coupon payment; for example, the right to take the firm into bankruptcy or to have board representation. As each security above equity goes into default, the strip holder receives new rights to intercede in the organization. As a result, it is quicker and less expensive to replace managers in Firm B. Moreover, because every security holder in the highly leveraged Firm B has the same claim on the firm, there are no conflicts between senior and junior claimants over reorganization of the claims in the event of default; to the strip holder it is a matter of moving funds from one pocket to another. Thus, Firm B will not go into bankruptcy; a required reorganization can be accomplished voluntarily, quickly, and with less expense and disruption than through bankruptcy proceedings. The extreme form of strip financing in the example is not normal practice. Securities commonly subject to strip practices are often called â€Å"mezzanine† financing and include securities with priority superior to common stock yet subordinate to senior debt. This arrangement seems to be sensible, because several factors ignored in our simplified example imply that strictly proportional holdings of all securities is not desirable. For example, IRS restrictions deny tax deductibility of debt interest in such situations and bank holdings of equity are restricted by regulation. Riskless senior debt need not be in the strip because there are no conflicts with other claimants in the event of reorganization when there is no probability of default on its payments. M. C. Jensen 29 1987 Furthermore, it is advantageous to have the top-level managers and venture capitalists who promote leveraged buyout and going-private transactions hold a larger share of the equity. Top-level managers on average receive over 30 percent of the equity, and venture capitalists and the funds they represent generally retain the major share of the remainder (Schipper and Smith (1986); Kaplan (1987)). The venture capitalists control the board of directors and monitor the managers. Both managers and venture capitalists have a strong interest in making the venture successful because their equity interests are subordinate to other claims. Success requires (among other things) implementation of changes to avoid investment in low-return projects in order to generate the cash for debt service and to increase the value of equity. Finally, when the equity is held by a small number of people, efficiencies in risk-bearing can be achieved by placing more of the risk in How to cite A Financial Perspective on Mergers and Acquisitions, Essay examples

What is reactive patrol free essay sample

What is reactive patrol? How does reactive patrol differ from proactive patrol? What would happen of policing agencies adopted only one of these patrol styles? Reactive patrol is when police officers respond to public calls or to a crime that has already occurred. Reactive patrol provides help to ensure that calls are responded to in an efficient and timely manner. Reactive patrol also involves the follow-up investigations required to get additional information to prosecute. It has the advantages that the public operate openly and in response to real public demands and with the consent of the public. Reactive patrol is more of a traditional style of policing. It consists of police waiting for crime and then going to the scene to try apprehends suspects. On the other hand, proactive patrol tries to prevent the crimes from happening in the first place. For example, Reactive patrol- an officer can respond to a violent crime or an armed robbery, and could be the first to arrive and my involved in a confrontation with the criminal. We will write a custom essay sample on What is reactive patrol? or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page While proactive patrols, officers check businesses at nightly on a regularly basis, and notify businesses owners once doors are found unlocked or other safety problems greatly reduces the chance that the businesses will be burglarized. Armed robberies, violent crimes, bike patrols in crowded pedestrian areas, night-time business checks; are all parts of the reactive and proactive patrol. If police agencies adopted only one of these patrol styles. It would be harder to have police discretion. Police officer would never be able to stop crime before it happen, without reactive and proactive patrol.

Medieval Life and Time Research Project on Weapons an Example of the Topic History Essays by

Medieval Life and Time Research Project on Weapons by Expert A+ Prof | 16 Dec 2016 The medieval times are considered as some of the most violent times in the history of mankind where the greed of power and money created many battlegrounds for the deadly battles. European countries built many castles in order to preserve their resources. Need essay sample on "Medieval Life and Time Research Project on Weapons" topic? We will write a custom essay sample specifically for you Proceed Students Usually Tell Us: Who wants to write assignment for me? Professional writers propose: Help With Essay Writing The army of each king included many different statures of soldiers including knights, archers, foot soldiers etc. and each had different types of weapons based upon technique and priority. Knights were considered to be the best of the warriors and foot soldiers were always there to get their order done. Knight used very different weapons from the ordinary soldier. Kings were supposed to fulfill all the needs of their soldiers. Knights used special knight weapons, medieval swords, broadsword, falchion sword, great sword, long sword, medieval shields and lance. In addition to that knights also used other small weapons as well. The descriptions of other weapons which are commonly used in battles are given below; Daggers: They are the pointed knives which are shorter in length. Maces: Maces are two steel balls attached on the wooden handle. They are quite heavy and can be dangerous. Lance: This is long steel headed spear like weapon which is used on the horseback. Knights are specialized to use this weapon effectively. It was extensively used in 11th century by the knights. Swords: They are of different kinds and the most used weapon of the medieval times because of its effectiveness. Broad Swords: The history of broad sword goes back to the 6th century. It is two edged blade which is think at the base around 2-3 inches. Its length is around 30-45 inches and weighs around 5 to 6 pounds. Falchion Swords: This sword was used extensively in the crusade wars by the knights. They are short and heavy single blade edge. It was used around 11th century. Great Sword: This sword was actively used in the 16th century. It was a heavy weapon and ranged more than 50 cm in handle with an addition of around 20 cm for the handle. It was weighed around 6-10 pounds. Long Sword: Long sword was a highly efficient weapon in the Renaissance period around 1350 to 1550 and in the late medieval times. It was also called as a hand and a half sword. It has length of around 50 cm. The Scimitar: It is made as a curved blade which has a sharp edge. It was also used in the crusade wars. Cutting Sword: This sword is most commonly known as the weapon of Vikings as it history goes back very far. It has very heavy and had two sharp blades on both sides. The handle was not that long. Longbow: Longbow has been used the history for thousand of years and is used for various purposes not only in wars but also for hunting. They are single piece of wood having a point steel or iron on the top. It is very effective in killing large animals as well. Battleaxe: Battleaxes have also been used by foot soldiers to great affect on the enemy. The wooden handle of battleaxe is around 150 cm with a curved blade of around 10 inch. It was used in the battle of Hasting in 11th century. Crossbow: It was another deadly weapon like the longbow but is more deadly than the longbow. Halberd: It was a very dominating weapon in the 14th and 15th century. The skills which are developed in the knights and foot soldiers of using these weapons require training in high facility areas so that they can achieve highest possible efficiency in using them. The training period was very long and required around fourteen years to complete at least. Moreover, first the soldier becomes a page and then depending upon their abilities and results shown. The training period continues and the page becomes a squire and then a knight. Knight is considered to be the best post of a soldier in the army. Works Cited Falchion Sword http://www.middle-ages.org.uk/falchion-sword.htm Nossov, Konstantin. Ancient and Medieval Siege Weapons: A Fully Illustrated Guide to Siege Weapons and Tactics. New york: The Lyons Press, 2005. Oakeshott, Ewart. A Knight and His Weapons. New York: Dufour Editions, 1998. DK Publishing. Weapon: A Visual History of Arms and Armor. Dallas: DK ADULT, 2006. Oakeshott, Ewart. The Archaeology of Weapons: Arms and Armour from Prehistory to the Age of Chivalry. New York: Dover Publications, 1996. Murrell, Deborah. Weapons (Medieval Warfare). World Almanac Library, 2008.

Plant Biology †Tobacco Research Paper

Plant Biology – Tobacco Research Paper Free Online Research Papers Taxonomy: The Nicotiana tobaccum plant (smoking tobacco) comes from the kingdom Plantae, and subkingdom Tracheobionta (vascular plants).It is also a Spermatophyte which mean â€Å"seed plant† and is also considered a Magnoliophyte (flowering plant) Its subclass is Asterides, and comes from the Solanaceae family (potato family). The plants genus is Nicotiana (tobacco) and similarly its species is the Nicotiana Tabacum (cultivated tobacco). Tobacco is related to many other plants which include; vegetables, flowers, weeds, and poisonous herbs like potatoes, tomatoes, eggplant, and petunias. The plant family is Solanceae and the genus, Nicotiana contains about 100 different species, however only two of them have been heavily cultivated. Natural History: This type of tobacco (Nicotiana tabaccum) which was originally only native to the eastern United States was the first form of tobacco that was introduced to the Spanish by Jerez and Torres, and has been the preferred tobacco since settlers in Virginia started to grow it. Planters thought that the tobacco had to be grown on virgin soil, so it made its was to the eastern part of the U.S (which is now the North Carolina area). The eighteenth century became the â€Å"Age of Snuff†. The tobacco from North Carolina was used for snuff and pipe smoking, and at this time cigarettes were mainly used in Spain. However by the 1840’s cigarettes became popular by French women, and many anti-tobacco societies were born, as the cigarette market made its way to the United States, and the rest is history. Characteristics:The Nicotiana tobaccum plant is an annual herb that ranges from .9- 2 m tall. The leaves are elliptic in shape; the flowers grow in clusters at the end of each branch and range from white to light red in colour and form globular seeds. The plant itself is a stalk with large leaves drooping off the main stem. It also has a short root that branches into a very dense root system. The crop can take between 2-5 months before it is ready to be harvested. Tobaccum is quite sensitive to temperature, air and ground humidity, as well as the type of land. A temperature of 20-30 degrees Celsius is best and for best growth, a humidity of 80-85% and soil without a high level of nitrogen are also needed. The plant is native to tropical and subtropical American conditions, but is now grown commercially worldwide. The plant is mostly grown in the eastern United States, Brazil, and Argentina. And is often found on dry grasslands, clearings, and along the edges of forests and roads in natural form as well as in cultivated areas. Plant Products Products: The nicotine in the tobacco can be used as an effective insecticide, as it is completely biodegradable. Tobacco is also used in enemas for the treatment is intestinal worms or constipation. And lastly, the most common use is the dried tobacco leaves used for chewing, snuffing, or smoking (cigarettes). There are also many other products that use nicotine to help people stop smoking. (Patches, gum, etc.) Also researchers at the Kentucky Tobacco Research and Development Center are working on different ways to use the plant for â€Å"molecular farming† by adding different genes to the plant to make new products like medicines, and enzymes for industrial uses. Properties: The most valuable part of the plant used is the nicotine, which is found in all parts except the seed. The concentration of nicotine increases with the age of the plant. A mature plant has about 64% nicotine in the leaves, 18% in the stem, 13% in the root, and 5% in the flowers. The chemical structure of nicotine consists of pyridine and pyrrolidine ring. Another chemical property is Anabaseine, an alkaloid similar to nicotine. The physical properties are also very distinct. Nicotine is colourless to pale yellow, very oily and has an unpleasant odour and sharp burning taste. It also slowly becomes brown after it is exposed to light or air. It is soluble in water, alcohol, chloroform, ether, kerosene, and some fixed oils. It should be stored in an airtight container and protected from light. Historical Connections Time Line of Nicotiana Tobaccum: c. 6000BCE Tobacco begins to grow in Americas. 1 BC Inhabitants find ways to use tobacco, including smoking and chewing. 1492 Christopher Columbus is offered dried tobacco leaves by the natives. 1559 Tobacco is called Nicotiana in honour of Jean Nicot, who finds medical uses for tobacco. 1628 Virginia has a monopoly on tobacco exports to England. 1730 First American tobacco factories are started in Virginia in the form of â€Å"snuff mills.† 1843 First commercial production of rolled cigarettes (France). 1880 Four leading cigarette companies sold 532,718 cigarettes in 1880 and 2.4 billion cigars. Also first cigarette machine is made. 1912 13 billion cigarettes sold in U.S. 1950 Scientific links are made between smoking and lung cancer. 1994 Tobacco companies release the â€Å"list† of the 599 additives to tobacco. 2003 Canada implements a full smoking ban in restaurants and bars have to have separate ventilated smoking rooms. Product Influences: Nicotiana Tobaccum is most commonly associated with cigarettes. The product that has most influenced our society in every way imaginable, including globally. It has been said by Statistics Canada that 21.5% of Canadians are smokers. That is over 6 million smokers. Statistics Canada, also states that in 2002, about 38.4 billion cigarettes were sold in Canada, which surprisingly is a 9% decline from the year before. Also, there were 45,215 deaths in Canada alone last year due to smoking related diseases. As you can see, smoking has a huge impact on all our lives, because even if you do not smoke, secondhand smoke is even worse. There are over 3,000 deaths by non-smokers because of second hand smoke, and thousands of others who get respiratory problems. Tobacco has drastically changed people’s quality of life, for the worse. There are over 48,000 easily prevented deaths, each year. It also harms our environment, due to the pollution is causes which again lowers our quality of life. And lastly, tobacco’s influence on the economy is unfortunately, helping. Since all tobacco products are heavily taxed, the government gets a lot of money from smokers. Globally it is the same, as in Canada, just on a wider scale, with more people dying, more cigarettes being sold, and more money for the governments. Technology Research Costs: There are many costs associated with tobacco products. Socially, and economically medical bills caused by smoking deaths and diseases are very high, it is estimated at $75 billion in the U.S alone are the medical costs associated with smoking. Also, there are very high costs caused from the legal aspect, people suing tobacco companies. Plus the cost of smoking in general, because of the health risk, the government has raised the taxes on tobacco products and now supporting your habit is very expensive. New Research: Again, the new research comes from Kentucky, where they are trying to find new uses for the tobacco plant. By using â€Å"molecular farming,† they are adding new genes to produce new helpful products like vaccines, medicines, and enzymes for industrial uses. Scientists are trying to promote the advantages of tobacco by developing new markets and new customers for the â€Å"new gene enhanced tobacco.† Some questions I have about the issue: If the tobacco plant is poisonous, is the result of over 48,000 deaths in Canada alone (every year), is a habit that harms others around you through secondhand smoke. Why are governments allowing the product to be sold? Technology:Jobs in the tobacco industry have being declining because of new technology. Machines are continuing to take over the jobs that once employed many workers. Also because of all the new control policies, the industry is getting smaller. However, in developing countries, the tobacco industry is on the rise, because they do not have any control policies that affect the people’s employment. The World Health Organization is working on making the policies world wide, but it may take a while. The policies state: 1. â€Å"Assisting, as appropriate, tobacco workers in the development of appropriate economically and legally viable alternative livelihoods in an economically viable manner; and 2. Assisting, as appropriate, tobacco growers in shifting agricultural production to alternative crops in an economically viable manner; † Career Connections Occupations: Farmer- responsible for the land (planting, growing tobacco) Seasonal Worker (harvesting the crop) Factory worker (Curing, drying the tobacco, packaging) Advertising (designing the package, layout of magazine ads, creating slogans.) Sales (selling the products) Educational Background for Farming: If you are going to be responsible for the land being used to grow and harvest tobacco plants, a general agriculture degree is important. There are many courses that Universities offer that have to do with agriculture and farming. But first, you need to have a strong science background because the farming occupation requires the knowledge of plants and animals and it is a prerequisite for most of the courses in University. A Bachelor of Science in agriculture, a program that is offered at many universities including Lethbridge, British Columbia, McGill, Saskatchewan, Western, and Nova Scotia is the course necessary to become a successful farm owner. After completing the University course, you would go on to becoming a farm labourer, where you would gain technical and farm related experience. The next level is to become a farm manager, where you would acquire the business experience, agricultural knowledge and administrative experience. The third and final step is to become a farm own er and with this job you would be responsible for all resources (labour, capital, and machinery), and be in charge of ensuring proper crop and irrigation techniques. The farm owner is the one associated with the first step in the flow chart, as they are the ones who are responsible for the growing and cultivating the tobacco that is later sold and marketed. Conclusions Based on my research and analysis I have discovered that the tobacco plant, nicotiana tobaccum is one of the most significant plants in our history and has made a huge impact on society and in our daily lives. It is one of the most controversial plants today, as almost all of the plant is poisonous yet smoking is one of the most common habits and most deadly. It is said that at least one in every 5 people smoke and the impact that smoking deaths have had on many lives is evident. The properties of the plant are understood with the knowledge of plant science since the plant contains a very harmful, addictive toxin, Nicotine and the fact that tobacco causes damage to the respiratory system. The information and technology gained from science could hopefully be used to improve the products that are currently being made by the nicotiana tobaccum plant. It is a proven fact that the nicotiana tobaccum plant by itself is a lot less harmful then after commercial tobacco companies put 599 additives into the plant that are much more harmful. There is also ongoing research about tobacco and many scientists are trying to use technology to improve tobacco products and make new ones that could have a positive impact on our society and our daily lives. Bibliography Dr. Julia Higa Landoni. (1990, March). IPCS Inchem: Nicotiana Tobaccum L site. Retrieved January 2, 2004, from inchem.org/documents/pims/plant/nicotab.htm#Secti onTitle:2.6%20Main%20toxins Natural Resource Conservation Service. (2003, December 29). Plants Database. Retrieved December 30, 2003, from http://plants.usda.gov/index.html University of Florida. (2002, February). Institute of Food and Agricultural Sciences site. Retrieved January 2, 2004, from http://edis.ifas.ufl.edu/BODY_AA260 Anaca Technologies Limited. (2004). Career Cruising site. Retrieved January 2, 2004, from careercruising.com/caschool_pro_prov.asp?LoginID=92 824953793rdLevelProgramCode=01.11013rdLevelProgramName= Plant+Science Weil, A, Rosen, W. (1993). From Chocolate to Morphine. New York: Houghton Mifflin Company. Research Papers on Plant Biology - Tobacco Research PaperGenetic EngineeringRiordan Manufacturing Production PlanUnreasonable Searches and Seizures19 Century Society: A Deeply Divided EraMarketing of Lifeboy Soap A Unilever ProductDefinition of Export QuotasCanaanite Influence on the Early Israelite ReligionBionic Assembly System: A New Concept of SelfAnalysis of Ebay Expanding into AsiaAssess the importance of Nationalism 1815-1850 Europe

Cancelación de visa por quedarse en EE.UU. más tiempo

Cancelacià ³n de visa por quedarse en EE.UU. ms tiempo Una de las formas ms frecuentes de  revocacià ³n o  cancelacià ³n una visa americana ocurre cuando un extranjero ingresa a Estados Unidos con una visa no inmigrante y prolonga su estancia ms all del tiempo de lo permitido. Asimismo, los turistas de paà ­ses incluidos en el Programa de Exencià ³n de Visados,–entre ellos Chile y Espaà ±a– y bajo el cual sus ciudadanos pueden ingresar a EE.UU. sin visa por un tiempo mximo de 90 dà ­as, pierden este privilegio si exceden su estadà ­a ms all de esos tres meses. Revocacià ³n visa por estancia ilegal en EE.UU. La presencia en EE.UU. ms all del tiempo permitido provoca cancelacià ³n/revocacià ³n visa. Adems, los turistas que ingresaron sin visa pierden ese derecho.Otras consecuencias:posible expulsià ³n o deportacià ³nimposibilidad de solicitar cambio visa o extensià ³nse limitan los caminos para regular la situacià ³ncastigo de 3 o 10 aà ±os, una vez que se est fuera de EE.UU.dificultad para volver a obtener una visa americanaSegà ºn datos del Departamento de Seguridad Interna, segà ºn datos de 2017, à ºltimo aà ±o fiscal disponible, se quedaron en EE.UU. ms all del tiempo autorizado:el 0,51% de turistas que ingresaron sin visa por el Programa de Exencià ³n de Visadosel 1,91% de extranjeros que ingresaron sin visael 4,15% de extranjeros que ingresaron con visa de estudiante F-1 Consecuencias por  permanecer ilegalmente en Estados Unidos   El tiempo que un extranjero no inmigrante puede permanecer legalmente en Estados Unidos y su periodo de gracia, cuando lo hay, est determinado por el tipo de visa que utiliza para ingresar. En el caso de los turistas con una B1/B2 el tiempo mximo de estancia est determinado en el I-94, registro de ingreso y de salida. En estos casos no hay periodo de gracia pero podrà ­a calificarse para solicitar una extensià ³n o, incluso, un cambio de visa. Pero si no se sale a tiempo la visa es cancelada. Por otra parte, en el caso de un turista internacional que ingresa a EE.UU. sin visa por ser de un paà ­s en el Programa de Exencià ³n de Visas el plazo mximo de estancia es de 90 dà ­as. No es posible ni pedir extensià ³n, ni cambio a otra visa. Tampoco aplica ningà ºn periodo de gracia. Una vez transcurrido el plazo que corresponde a cada persona segà ºn su tipo de visa, el extranjero se convierte en indocumentado si permanece en Estados Unidos. Es lo que se conoce en inglà ©s como visa overstay. Consecuentemente, podrà ­a ser expulsado o deportado, dependiendo de las circunstancias de cada caso. Sin embargo, existen excepciones como, por ejemplo, iniciar un trmite para ajuste de estatus o haber solicitado a tiempo una extensià ³n o un cambio de visa.   Adems de la consecuencia de la posible deportacià ³n, hay otras que deben ser tenidos en cuenta. En primer lugar, una vez que la visa se convierte en no vlida por haber abusado del tiempo permitido para permanecer en Estados Unidos ya no es posible pedir con à ©xito una extensià ³n de la misma o el cambio a otra   Adems, es muy importante que si se est en situacià ³n de indocumentado se cierran en la prctica muchas puertas a la posibilidad de obtener la tarjeta de residencia. La razà ³n es que no siempre es posible realizar lo que se conoce como un ajuste de estatus.   Por ejemplo, Antonio Alonso ingresà ³ a Estados Unidos con una visa de turista y se quedà ³ 15 meses ms all de la fecha autorizada. Despuà ©s se casa con Pili Pà ©rez, una residente permanente que lo pide como esposo. Al principio las cosas van bien porque el Servicio de Inmigracià ³n y Ciudadanà ­a aprueba la peticià ³n de familiar realizada con el formulario I-130. Pero despuà ©s la dura realidad se impone. Antonio no puede ajustar su estatus y tiene que salir de los Estados Unidos para completar el proceso en un consulado. Y allà ­ se encuentra con la negacià ³n de la peticià ³n de la green card y que tiene un castigo de 10 aà ±os por haber estado ilegalmente en los Estados Unidos. La situacià ³n serà ­a diferente si Pili Pà ©rez fuera una ciudadana estadounidense en vez de una residente permanente. Cabe destacar que la situacià ³n de indocumentado limita las posibilidades para regularizarse al impedir en muchos casos el ajuste de estatus. Por eso, si se tiene ese estatus es muy importante informarse muy bien sobre si para el caso particular que le afecta a uno es posible arreglar los papeles sin salir de Estados Unidos o no.  ¿Quà © sucede cuando se sale de EE.UU. pero se ha estado ilegalmente en el paà ­s? En este caso hay que distinguir dos situaciones: En primer lugar, cuando se ha estado en situacià ³n irregular en Estados Unidos por un total de menos de 180 dà ­as. En este caso es posible pedir inmediatamente una nueva visa. Pero hay que tener en cuenta que el consulado puede negarla muy fcilmente por considerar al solicitante como inelegible. Y eso es porque una de las razones por las que se puede decir no cuando se pide una visa es que el oficial consular crea que el solicitante tiene intencià ³n de quedarse en Estados Unidos.  Si ya lo hizo una vez,  ¿por quà © no va a volver a hacerlo? Por eso que no es tan fcil volver a sacar la visa. Pero desde luego que no es imposible ya que la estancia alargada fuera de plazo pudo deberse a una situacià ³n razonable que se puede probar, como por ejemplo, haber estado hospitalizado.   Tambià ©n puede ser que hayan transcurrido ya muchos aà ±os y la situacià ³n actual del solicitante, muy asentado en su lugar de residencia, permita suponer que de esta vez no se va a quedar en los Estados Unidos ni un sà ³lo dà ­a ms del autorizado. Subrayar que de acuerdo a la ley, cualquier oficial consular puede denegar una visa basndose en sospecha. No necesita probar nada. Es el solicitante el que debe probar ms all de toda duda que va a cumplir las leyes migratorias. En segundo lugar, si se ha estado sin autorizacià ³n en Estados Unidos por ms de 180 dà ­as aplica el castigo de los 3 o de los 10 aà ±os, si bien hay algunas excepciones. Este castigo implica que mientas se est cumpliendo una persona se convierte en inadmisible para ingresar a Estados Unidos. En otras palabras, mientras no cumpla su tiempo de castigo no puede pedir una visa y, si lo hace, ser negada. Sin embargo, en algunos casos extraordinarios es posible solicitar un permiso, que tambià ©n se conoce como waiver or perdà ³n y asà ­ se podrà ­a solicitar la visa antes de que transcurra todo el tiempo de castigo. Las condiciones para solicitarlo son diferentes segà ºn se quiera obtener una visa no inmigrante, por ejemplo la de turista, o una de inmigrante para obtener la green card, por ejemplo, en el caso de peticià ³n por parte de un familiar. En todos estos casos lo recomendable es consultar con un abogado migratorio reputado. No es fcil obtener un waiver y, ni siquiera es posible sacarlo segà ºn como sea el caso.   Finalmente, si se ha cumplido el castigo de los 3 o de los 10 aà ±os, es posible ya solicitar una visa no inmigrante o de inmigrante porque ha desaparecido la causa que convertà ­a al extranjero en inadmisible.   Sin embargo, tener en cuenta que para el caso de visa no inmigrante todavà ­a es posible que el cà ³nsul la niegue, precisamente alegando que se es inelegible. Es muy importe en estos casos poder demostrar que no se tiene ninguna intencià ³n de quedarse en los Estados Unidos ms tiempo del permitido y de que se tienen lazos econà ³micos y familiares fuertes en el lugar de residencia.  ¿Cà ³mo se notifica la cancelacià ³n de la visa? La cancelacià ³n de la visa se produce automticamente. Las autoridades estadounidenses no tienen obligacià ³n de comunicarlo. Lo mismo sucede con los nacionales de los paà ­ses del Programa de Exencià ³n de Visas. Pierden automticamente el derecho a ingresar a EE.UU. sin un visado, no siendo necesaria la comunicacià ³n a la persona interesada. Consejos para evitar tener problemas con las visas americanas La visa que mayores problemas causa es la de turista. Para evitarlos es conveniente tomar este test sobre cà ³mo obtenerla y conservarla. Adems, no conviene abusar de las frecuencias de los ingresos. Este es un artà ­culo informativo. No es asesorà ­a legal para ningà ºn caso concreto.

Is Technology Messing With Your Brain Essay Example | Topics and Well Written Essays - 500 words

Is Technology Messing With Your Brain - Essay Example It never occurred to me that all this activity caused me to be distracted, and how it affected my brain. The more I thought about what the article had implied, regarding how all the distraction could cause our brains to have short attention spans and how it resulted in leaving no time for our brains to rest, the more I realized how lightly I have taken technology to be, and how I have never realized its side effects. I agree with the article, in that we do have a lot of technology in our lives, whether our cell phones, our laptops, our iPods, our televisions, our video gaming consoles, or any of the myriads of multimedia devices, we have a lot of them in our daily lives and now we are used to using them excessively. This is more so in our lives, the lives of the teenagers. We are so stuck on technological devices that rarely do we find time to engage ourselves in some relaxing activity. It is as if we have put our brain in an over-drive. This may later on result in having a link to t he Attention Deficit Disorder, though that is just my assertion for now.

Classical Societies Essay Example | Topics and Well Written Essays - 500 words

Classical Societies - Essay Example They are mostly influenced by the nature of work they produce as they are of unique and elaborate quality. According to (Hunt For,2007)â€Å"  Classical period of ancient Greek history is fixed between 480 B.C., when the Greeks began to come into conflict with the kingdom of Persia to the east and 338 B.C., when Philip II of Macedonia with son Alexander defeated the Greek†. The art work of classical Greece style depicts the independent identity of human beings. It also shows the freedom of movement and freedom of expression of mankind of that era. In classical Greece artwork, the artist experimented the true nature of man and artist expand themselves beyond the aesthetic boundaries. Here the artist utilized the human expressions and nature to carve out masterpieces in marble. Here ,the human figure is utilized in many ways to bring out the best artistic value in them. The artwork here is projecting a girl who is holding doves in her hand which is a symbol of peace and harmon y.Normally, this kind of art work which is carved in marble,with a girl in the portfolio is seen to be placed in Greek Cemeteries.The greek girl standing here bows her head down to the dove which symbolizes her seriousness, which is not usually seen in a a girl of her age.This artwork was sculpted around 450 and 440 B.C.

How Benna in Anagrams Creates Her Own Reality Essay Example for Free

How Benna in Anagrams Creates Her Own Reality Essay In the novel Anagrams by Lorrie Moore the main character Benna bounces back between reality and the reality she creates. At times is hard to tell what’s what. Benna is a widow that lives alone and has an on and off relation with Gerard. She has also created an imaginary friend Eleanor and a daughter Gorgianne. When she is talking to the people she created it is hard to tell that their not really there. Bouncing back between created reality and what’s actually going on is at times hard to follow. This false reality she created plays a big role in â€Å"The Nun of That†. Benna creates her own reality in a few different ways. She imagines a daughter and a friend that she has full conversations with. The daughter she creates name is Gorgianne. She was named after Benna’s husband George that committed suicide. â€Å"Georgie has dinner and a bath, and Mrs. Kimball comes over and I say good night and drive over to Gerard’s apartment. † (Moore 118). This quote shows that Benna treats Gorgianne as a real daughter. Benna gave her dinner, and a bath; she even hired a baby sitter. Now if these things actually happened there is no evidence. With Benna talking like it’s actually happens it makes it hard to tell that her daughter is imaginary. â€Å"She holds up a little soap chunk she has broken off the bar. She is crying. â€Å"I put it up my nose,† she sobs. â€Å"I wanted to be all clean for tomorrow for school but now it won’t come out. † (Moore 74). This is another example of how Benna creates her own reality. She goes in complete detail of how and why the soap is stuck in Georgianne’s nose. Now clearly this did not happen because she in not real but the next day in class Benna tells them that was the reason she did not momorize there names. Eleanor is Benna’s imaginary friend. She is another example of how Benna creates a false reality. â€Å"Eleanor puts her pen down, all histrionics, and gazes out the lounge window, at the parking lotand the one tree. â€Å" You know, I just hate it when I lose my composer,† she says. † (Moore 65). Here Benna and Eleanor are grading tests I the lounge at FVCC. His is clearly one of Benna’s fabricated realities. Benna talks with Eleanor quite often. Their conversations are just like any other friends would have. This makes it hard to tell that Eleanor is not really there and just imaginary. There are a few reasons that Benna has this false reality. One reason is that she could be lonely. She makes up her daughter and friend so she doesn’t have to be alone. After her husband she had no one to live with so she probably thought she could imagine someone. Another reason could be that Benna always wanted to have a kid. Benna at times mentions that she would like to have a family, so she imagined that she had a daughter to have one. Also Benna could have imagined Eleanor just as someone to talk to and as a part of a life that she would have wanted to live with a friend like that and a daughter as well. Benna, the main character in the novel Anagrams, by Lorrie Moore goes back and fourth between reality and a reality she creates. She imagined a friend and a daughter. They have full on conversations with each other like they are actually there. At times her reality seems so real that it is hard to tell apart from what is actually going on. This makes it hard to tell what is actually being said and at times if the Imagined people are actually imagined. The main reason Benna creates this false reality is because he is lonely and wants people to spend time with and talk to. Moore, Lorrie. Anagrams: A Novel. New York: Knopf, 1986. Print.

Windows 2000 :: essays research papers

Have you ever wondered where Microsoft will go next with Windows, well now it is time for you to find out. Microsoft has almost completed Windows 2000, which will be the new era for software around the world. In the last year computers have grow dramatically, with the new Pentium II chip and processors with the speeds up to 450MHZ. Almost every family home in America today has at least one personal computer. Whether it is for business or pleasure, more and more people are realizing the significance of computers. I am going to unleash the information that will show you how Windows 2000 will work. Windows 2000 is an operating system that configures your hardware for you. With its structure based upon Windows 98 and NT, they have also introduced revolutionary interface enhancements. New Advancement Topics ? Plug and Play Power management for the latest desktop and notebook models. ? Web integration That has one interface for browsing local files, Intranets, and the Internet. ? One-step management A customizable console that lets you control computers, peripherals, users, security settings, from any desktop. ? Directory services Which can handle all the tasks of managing users, groups, shared peripherals, and security, it also allows you to do all this over worldwide networks. ? Serious security A new security system that will use smart cards and other physical keys to let you access the computer. Plug and Play The new Plug and Play will allow you to handle all your hardware chores from one central location without restarting your computer. And at the location you will also be able to inspect driver device settings, update drivers, or troubleshoot resource conflicts. I am sure that this will be extremely helpful to many people out in the computer world including myself. With this feature it will make looking for a program or installing one a breeze. Web integration   Ã‚  Ã‚  Ã‚  Ã‚  The Internet has become one of the biggest things used in homes and companies. It allows people at home to go shopping, check the weather, buy stocks, and work without ever leaving the desk. Companies are using it to publicize and inform people about them and their products. They also use it internally to connect different floors together via e-mail. With new Internet settings you will be able to choose your Web-style views thus letting you control what comes up on the screen without you saying, 'what the hell is that.'; One-step management   Ã‚  Ã‚  Ã‚  Ã‚  With current Window versions, there's no way to find a file-using Explorer.