Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Stocks Perference - Essay Example

Comments (0) Cite this document
As a company plans to go public, it has to keep in mind the interests of various parties. “The regulators to the issue will consider the following:
In my opinion, it is prudent to…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.1% of users find it useful
Stocks Perference
Read TextPreview

Extract of sample "Stocks Perference"

Stock Preference Q1. Should ALLGR consider issuing common stocks and bonds or simply stay with the issuance of common stocks only? There are a numberof issues to be considered while coming out with an Initial Public Offering. As a company plans to go public, it has to keep in mind the interests of various parties. “The regulators to the issue will consider the following:
1.Experienced management and Directors
2.Conflict of interest between business and shareholders
3. Conflict of interest between Directors’ private affairs
4.Plans for the future and strategy
5.Recently audited financial statements”.[Ross Geddes]
In my opinion, it is prudent to consider issue of only common stocks instead of bonds and stocks for this particular issue. With the current market conditions and bleak economic scenario, it might not be advisable to consider issuing bonds. Interest rates have been nose-diving since the past couple of years and the response might not be all that great. Also, the company might find it difficult to pay out high interest, as the current global economic scenario is quite uncertain and might turn for worse any day. Once the management trainees are hired, we could decide on a sound strategy and growth pattern for the company and subsequently go in for the public issue after a period of three months at least. This time is required for the trainees to familiarize themselves with the working of the company and think about ways to improve the sales and profits. I would however not recommend having any of the new management grads on the board as the board members must be experienced people with excellent track records.
Q2. The possibility of implementing an employee stock purchase plan and wants you to briefly explain to him the mechanics and benefits of this type of a plan.
Employee Stock Option is a wonderful tool to retain talented employees and keep them happy. No doubt, this perquisite could be offered to the employees, especially the management trainees who join the company in the next few weeks. “Technically, under ESOP, a company offers its employees the chance (or option) to purchase a certain number of shares at a future point in time. Generally, these shares are offered at a pre-determined price, which as per the company’s expectations would be lower than the market price at the time when the employee can exercise the option (choose to buy). Of course, the reverse could be true, in which case the options have no value at all.”[Sify Business]
In case the employee chooses to leave the company before the vesting period, the stock option ceases to exist and the employee cannot benefit from it. We could keep the vesting period as five years to encourage the trainees to keep working with us.
Another advantage with ESOP would be the tax benefit for the company. Since the stocks would be a part of the employee’s compensation package, the employee would have to pay the tax on the amount and we would be saving that amount.
If a substantial part of the salary is offered as ESOP, we could be sure of the dedication of the employee to the job. Also, the chances of stock prices falling below a certain range would be very less, as a lot of floating stock would then be with the employees.
Thus, in my opinion, ESOP would be a wise option, saving us on tax, uncertainty while helping in employee retention.
1. Geddes, Ross. IPO and Equity Offering. Accessed on 4-8-09.Available at
2. Sify Business, Accessed on 4-8-09.Available at Read More
Cite this document
  • APA
  • MLA
(“Stocks Perference Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Stocks Perference Essay Example | Topics and Well Written Essays - 500 words. Retrieved from
(Stocks Perference Essay Example | Topics and Well Written Essays - 500 Words)
Stocks Perference Essay Example | Topics and Well Written Essays - 500 Words.
“Stocks Perference Essay Example | Topics and Well Written Essays - 500 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document


Compare Three Stocks

...? a. Give business summary and key statistics for each. The three stocks that I have chosen for my portfolio are from S&P 500 index. The index currently floats at 1234.83 which dropped from marginally from its previous day close at 1255.19. The three companies include Abbot Laboratories (ABT), Inc. (AMZN) and 3M Co. (MMM). Abbot Laboratories (ABT) belongs from the health care sector and specializes in Drug Manufacturing. The company was founded in 1888. The company is located in United States and possess a workforce of 90,000 fulltime employees. The company practices discovery, development, manufacture, and sale health products globally. Its drug portfolio contains medicine of almost every discovered disease present...
6 Pages(1500 words)Research Paper

Banks and Stocks

...? Banks and Stocks Table of Contents Introduction 3 Reasons for the loss of JP Morgan 3 Effect of the loss on industry and economy 4 Conclusion 5 References 6 Introduction JP Morgan Chase & Co. is known to be amongst the leaders in the financial services providing globally. JP Morgan & Co. is into assisting clients in their business as well as wealth management program. JP Morgan Chase & Co. mainly deals in asset management, private banking, investment banking services related to treasury and securities and even commercial banking. It generally concentrates on building up the innovative strategies to meet the requirements of its client’s daily and future needs. But recently JP Morgan Chase & Co. had suffered a “significant” loss amounting...
3 Pages(750 words)Essay


...What are Stocks The Webster's New World Dictionary defines Stocks as The capital invested in a company or corporation through the buying of shares each of which entitles the buyer to a share in the ownership and voting rights etc. Stocks are a kind of "Security" which will be representative of the equitable share of ownership of a corporation or a business concern. The owners of the stock in a business thus are the equitable owners of the business to the extent of the percentage that they have contributed(Maunder 3rd Ed).This ownership yields them the power or mandate to control the voting rights and have a share in the company's profits which accumulate through dividends /capital appreciation. (Maunder 3rd Ed)Also in the event...
4 Pages(1000 words)Essay

Nucleons Stocks in the Stock Market

...Nucleon’s Stocks in the Stock Market INTRODUCTION Capital budgeting is described as the process of identifying, evaluating, planning and financing capital investment projects of an organization(Hilton, 482). Capital budgeting involves financing decision and investment decision(Maher, 317). Financing decision involves how the company will generate cash flows. Investment decision borders on which assets will be bought first and which will be bought later. There are two main types of capital investments. First, the cash needed to buy the equipments and other large -sum costs to produce the CRP -1 gene clone can be generated by offering the Nucleon’s stocks in the stock market. In this way, the investors in the stock market...
5 Pages(1250 words)Essay

Interest rates & stocks

...Running Heading: Interest rates & stocks Interest rates & stocks To calculate the return of XYZ stock, Capital Assets Pricing Model (CAPM) is used. The CAPM equation is as follows: Ks = Krf + (Kp* β) According to Bloomberg, the risk free rate or U.S. 10-year Treasury bond rate is 2.125% which is denoted by ‘Krf’ in the above equation. Kp is the market risk premium which is equal to 7.5% and β is the Beta of XYZ stock which is equal to 1.64. By using these values in the CAPM equation, the return of XYZ stock has been calculated and it is equal to 14.425%. To calculate the price of the stock, Constant Growth Model (CGM) equation has been used. CGM equation is as follows: P = D/ (Ks-g) The current dividend of XYZ Company is $0.80 and ‘Ks...
2 Pages(500 words)Essay

Chinas Stocks Head for Weekly Gain on Policy Outlook, Europe

...China’s Stocks Head for Weekly Gain on Policy Outlook, Europe The article focuses on the gains made by the Chinese stock based on changes in policies and speculation about the steps that are likely to be taken by authorities at in China and EU. The stock price increases had stagnated or experience slow growth since the world economic recession that was closely followed by EU debt crisis. This is because of reduced demand for Chinese goods abroad and a tightening of domestic fiscal policies meant to safeguard investments. According to the article, the stocks experience the biggest gain during the week in question influenced by signs that the Greek debt problem will be resolved and speculation and rumors about expected policy changes...
3 Pages(750 words)Article

Stocks Returns Investment Analysis

...Investment Analysis Introduction This article is intended to analyze the excess returns of 6 stocks from the S&P/ASX300. Those stocks are as follows: Myer Holdings Limited (MYR) Tabcorp Holdings Limited (TAH) BHP Billiton Ltd. (BHP) QBE Insurance Group Ltd. (QBE) David Jones Ltd. (DJS) Qantas Airways Limited (QAN) The above mentioned stocks are picked on random basis so that the analysis overall should not emphasize one or two industries. The excess returns of these stocks are identified by applying the Three Factor Model given by Fama and French in 1993. This model postulates that a given stock’s excess return is mainly dependent upon three factors which are as follows: Excess Market Return (EMR) Small Company Returns minus Big Company...
4 Pages(1000 words)Essay

Valuing Stocks

Assignment As owners, what rights and advantages do shareholders obtain?" (Cornett, Adair, and Nofsinger, p. 172). Solution: Rights of Shareholders
a. To receive shares after allotment or transfer in due time.
b. To receive company documents like abridged Annual Report, the Balance sheet, the Profit and Loss account and the Auditors’ Report.
c. To receive Dividends in due time after approval in General Meetings.
d. To receive corporate benefits like right, bonus etc. after approval.
e. To participate and vote in General Meetings either personally or through proxies.
f. To receive the residual proceeds.
Advantage to Shareholders
a. Ownership in the company.
b. Periodic payments of dividends based o...
1 Pages(250 words)Essay

High return stocks, low return stocks, and

...A False Regime of Financial Philosophy of Attaching Higher Risk with Higher Return A False Regime of Financial Philosophy of Attaching Higher Risk with Higher Return The economic climate and political one are intertwined in nature, and therefore, it is very important to keep a close eye on level of political power that companies have at any given time. The world of business is already filled with the countless instances of accounting irregularities. The investors cannot simply trust what market dynamics tell them because they have to treat everything as a lie before the information checks out (Vernon, 1966). However, most of the companies use advertisement as the means of cultivating positive intentions and hopes in the customers...
1 Pages(250 words)Essay

Treasury Securities and Stocks

This paper highlights that the U.S. Treasury Securities are accredited the U.S. government, and thus they are considered risk-free. The U.S. Treasury market is liquid and large with an agreement of an active repurchase in place. In addition, the faith placed on a security market depends on the credit rating of a nation, which is based on the borrowing and repayment history of the government. The repayment ability is based on the economic strength of the country. On the same vein, the U.S. has been rated under the highest credit ratings, AAA, by Standard and Poor’s, a credit rating institution. This positive rating is attributed to the fact that the U.S. is the most powerful economy across the globe. Given this, the Treasury...
4 Pages(1000 words)Essay

Selling own common stocks

...Reason why company Sell its Own Common Stocks College Introduction Share repurchase is considered to be the requisition of the firm’s own stock. In the countries such as UK and US, a corporation is allowed to repurchase the own stock of the company by distributing cash among the existing shareholders in exchange for the outstanding equity of the firm i.e. the cash is exchanged between the corporation and shareholder for the purpose of reducing the number of shares outstanding. It is on the company to either keep the shares as treasury stock or retire these repurchased shares, which are available for re-issuance. There are five primary methods identified by the US corporate law for stock repurchase. These methods are open market, fixed...
4 Pages(1000 words)Research Paper

Performance Report for Three Stocks: Apple, Boeing and Tesla

...Performance Report for Three Stocks: Apple, Boeing and Tesla Introduction These stocks during the period had mixed results with Apple’s stock’s performance experiencing a 30.96 percent rise, and the other two experiencing a decline. Boeing Company had a marginal loss of 4 percent in the price of its stock, while Tesla’s stock’s price fell by 25.71. I had failed in the attempt to correctly predict the price of these stocks by 11th December only achieving a positive result in Apple’s stocks. Apple Stock’s Performance On September 3rd when I sought to invest in the stocks of this company, the price opened at $100.41 and on 11th December 2014, the price closed at $111.62, and my prediction was $131.50. A number of factors had informed...
2 Pages(500 words)Essay

Three stocks

... Dear Mr. ….. Investing in the stock market can be a challenging endeavor because of the risks involved. But with research and substantial information regarding the stocks, it can offer promising returns. It is a source of investment that dearly pays and ascertains financial security for the future. Taking the initiative to invest in the stock is a great step towards gaining an extra income as you literally ‘watch your money grow’. There are a lot of public companies that one can invest in, but I recommend these three companies namely Microsoft, General Motors and Apple Inc. These companies outstanding performance throughout the past five years in the stock market make them the most preferable investment option. Microsoft Corporation...
2 Pages(500 words)Assignment

The Sources of Fundamental Risk Involved in Investing in Microsoft Stocks

...The Sources of Fundamental Risk Involved in Investing in Microsoft Stocks Analyzing the risks involved in a company’s stock requires a test of its fundamentals. Fundamental analysis is the technique used to conduct such a test. This particular analysis involves an examination of the underlying forces that affect the health of the economy, industry groups, and companies. The objective of this analysis is to derive a forecast and profit from any future price movements. At the company level, it involves examination of its financials, management, business strategy and the competitive forces surrounding the company. There are two main approaches to conducting...
8 Pages(2000 words)Essay

Investment Portfolio Based Exclusively on Stocks

...Part I The stock market is a great investment option for individual investors. Some individual have made fortunes on stocks that have risen in pricestremendously. Some examples are the early investors in companies such as Microsoft and Google that have grown tremendously over time. In the Microsoft case this is a company with over 20 years in the market, Google in the other had in a dot com company that took off in the this decade and became a growth stock that made its investor s that invested early on incredible profits that surpassed the 10x profits. A person that wants to enter the stock market must play the game in a way to minimize risk. The best way to achieve a solid investment strategy is by building a diversified portfolio...
10 Pages(2500 words)Assignment

Citigroup and J. P. Morgan Chase and Stocks of Enron and WorldCom

...Running Head: [short [institute of affiliation] Case 1. To what degree, if any, should investment banks, such as Citigroup and J. P. Morgan Chase, be held liable for debt and equity securities that plunge in value, such as the bonds and stocks of Enron and WorldCom? The degree of liability of investment banks in these kinds of situation rests on the knowledge of the bank about the financial turmoil within the issuing company. The plunging of value of debt and equity securities of a corporation is beyond the control of the investment bank. Therefore, in many cases where situations like Enron and WorldCom result in plunging values, the bank would only be held liable if they happen to know about the turmoil, yet they continued and pursued...
8 Pages(2000 words)Assignment

Macroeconomics: Stocks and Bonds Concepts and Applications Revealed

... Macroeconomics: Stocks and Bonds Concepts and Applications Revealed Abstract The objectives of this paper are as follows: (1) it aims to present basis concepts and theories about stocks and bonds by starting with their definitions; (2) the classifications of both instruments would be discussed; and (3) the ways of investing would be explored to inform readers of each option’s considerations in investing funds. Finally, guidelines would be presented on choosing the right option for one’s financial investment. INTRODUCTION The world is beset with a crisis which is financial in nature affecting economies on a global scale. In cases of wide range financial crunch, individuals and corporations are extremely cautious...
8 Pages(2000 words)Research Paper

Investing in Stocks Bonds and Commodities

... Executive Summary: The current recession has highlighted the importance of commodities as an inclusive item in an investment portfolio, because they tend to fare well when inflationary trends following a recession exist, and they also do well in the long term. The report below summarizes the results from a stock market watch, using a portfolio comprised primarily of commodities and devoid of bond investments, although it does contain some equity shares. A description of the three different kinds of investment instruments, i.e., equity shares, bonds and commodities is provided below, followed by an analysis of a specific portfolio that has registered good gains. Shares, bonds and commodities: Companies issue stock primarily in order...
11 Pages(2750 words)Research Paper

The Role of Regional Fisheries Management Organisations in the Conservation of Fish Stocks

...The role of regional fisheries management organisations in the conservation and management of fish stocks that straddle the exclusive economic zone and high seas and highly migratory fish stocks The regional fisheries management organisations related to ocean bodies have been actively pursuing the conservation and management of fish stock straddling the exclusive economic zone and high seas as well as highly migratory fish stocks. The same has been the objective of United States Fish Stock Agreement. Under the United Nations Convention on the Law of the Sea (UNCLOS), the Agreement came into effect on 4 August 1995 for the conservation and management of straddling fish stock, and highly migratory fish stocks. Part VII of the Agreement...
22 Pages(5500 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Stocks Perference for FREE!

Contact Us