Midterm paper Essay Example | Topics and Well Written Essays - 1250 words - 1

Midterm paper - Essay Example The story of the famous Pocahontas, well remembered for spearheading interracial marriages, has been adapted by several films including the ‘The Pocahontas’ and the ‘Avatar’. The films have many similarities with the original story as narrated by Charles Dudley Warner but there are several exaggerations and manipulations done. The film ‘Pocahontas’ is an animation that attempts to present the life of Pocahontas. Just like in the story, the 1995 release animation presents Pocahontas as a woman who opposed to the idea of the segregation of Englishmen by her people in Powhatan. Both depict her as an influential character who embraced Captain Smith while they were in Virginia in1608. They describe her as a distinguished girl with great character and a genuine concern for humanity. However, the animation leaves several gaps in explaining the particular traits that she had while young, as explained by the author, â€Å"She was a child of remarkable i ntelligence, and that she early showed a tender regard for the whites and rendered them willing and unwilling service† (Warner 1). Such an expression is missing in the animation. Therefore, the story loses its true meaning. ‘The Avatar’ has a comparable plot to the story but the characters used are different. Warner presents historical events that relates to the romantic woman, Pocahontas, who fell in love with the whites despite herself being an Indian. The movie depicts a future occurrence but frames the incidences to reflect the story. While the story talks about Powhatan as from 1607, the movie talks about the Pandora by 2154. The movie talks about the mining of Unobtanium by the humans in the biosphere that has detrimental elements for human survival. In contrast, the Englishmen set their foot in Powhatan in an effort to mine gold. Despite the variances in characters and the timing both talks of men on a mission that results to a relationship between one of t he inhabitants, the Navi and the Powhatan’s in the movie and story respectively. The story provides many detailed accounts that does not feature in Disney’s ‘Pocahontas’ animations. The animation is very casual presenting shallow information about the characters. Little attention is given flashbacks and flash-forward as used the author. This breaks the sequence of events, as they appear in the story, hence the ability to understand what the events as they follow each other (Bazin 23). The author presents a variety of descriptions to demonstrate the nature of relationship between Pocahontas and Smith, an aspect that the film also portrays but with the magnitude. Again, the animation goes overboard in presenting the romance with Smith and the shooting of Kocoum. However, the storyline appears similar and the characters used are given similar names and similar character traits The author is not definite of the actual occurrences. On several instances, he uses the word ‘or’ meaning any of the things he is talking about might have taken place. Contrary to these views, the two films present very definite situations. This biasness is based on the fact, that a movie cannot present two opposing ideas since they can contradict the viewers. The author mentions, â€Å"Either Strachey was uniformed, or Pocahontas was married to an Indian†, this is presumption made by the author but the two films avoid the argument and do not feature this scene, probably due to its

British General Elections Essay Example | Topics and Well Written Essays - 750 words

British General Elections - Essay Example Yet Brynin and Newton suggest an interesting fact that people whose political ideals and attitudes are compatible with the newspaper they read are more likely to vote than people whose attitudes are considerably cross pressured or go against their own. The study points out that the effects of the newspaper in determining voter choices is significant though not too large and newspapers effects seem to be greater for closely fought elections as that in 1992 than in 1997. Newspaper effects are even high for Labour reinforced political support than for conservative reinforced. The study highlights the fact that newspapers do have a statistically significant effect in determining political behaviour of the voters although the influence of newspapers is more conspicuous during close election results rather than in landslide victories. The study also focuses on the fact that the Conservative press dominated daily circulation in Britain from 1945-1992 and this may have helped the party to wi n elections continually and remain in power. The role of the press in voter decision making process and in consequent determination of election results could be considered as significant especially for close elections and voter turnout is determined by the newspapers and the impact that the news reports has on the electorate. The fact that there has been a decline in electorate turnout in the present British elections has raised concerns and Rallings and Thrasher (2003) point out that poor voter turnout is a long feature in British politics. They discuss the recent reforms and electoral arrangements that have attempted to encourage higher voter participation by reducing costs of voting although the effects of these reforms may not be complete if the voters do not comprehend the value of their own voting contributions to the development of the community or the nation. Thus it is important for the electorate to perceive the importance of their vote in shaping the nation and its future and this may be the single most important factor in increasing voter turnout. Rallings and Thrasher point out that the electors who vote in general elections but not in local contests may be more affected by changes and commitment to local community needs and concerns would help to counter voter apathy. The election results an d outcomes regarding winning of elections would be important as a mobilising tool as when local elections seem to bring about changes within the local community, then possibly there will be less apathy for the elections and voter turnouts will increase. The turnout to the British general elections of 1997 was at 71% which caused concerns about the long term scenario of political participation in the country. Pattie and Johnston (2001) provide a political analysis of voter turnout and suggest that there was rapid decline in turnout during the 1950 through 1970 although there has been no long term decline in general election turnout between 1974 and 1997. According to the analysis, close

General Management Essay Example | Topics and Well Written Essays - 1000 words

General Management - Essay Example 7 6. How Is Culture Transmitted To Employees Of An Organization? Explain The Four Primary Transmission Modalities And Provide Two Relevant Examples Of Each. 9 References 10 1. When Hedin Asks For Your Professional Advice, Will You Recommend All Outsiders Or A Mix Of Employees And Outsiders To Fill The Director Positions? Justify Your Answer With Sensible Arguments Supported By Examples. Directors play an imperative role in business management in the modern day context. They are not only responsible for determining the organizational policies, but are also accountable for the overall performance of the company. To be precise, evaluation of the organizational performance, planning of the organizational operations, executing the planning and re-evaluating the overall performance, i.e. the overall management functions are programmed and controlled by the directors (Wisconsin Rivers, n.d.). Therefore, it is quite important for the potential directors to be experienced and qualified to dea l with the challenges to organize and execute the management operations of the business. The directors for an organization can be recruited both from the external environment of the organization, i.e. an outsider and also from the internal environment of an organization, i.e. the employee of the organization (Mittal, 2007). ... On the similar context, recruiting employees of the organization as its director can raise the limitations of adequate and dependable qualifications and skills to perform the duty of the board of directors (Hermalin, 2004). Even in this case, it would be preferable to choose directors from internal as well as external environment which will mitigate the constraints of hiring only outside directors or internal directors with due consideration to their skills and qualifications in terms of academics and also in terms of personal traits. This in turn will reward enhanced performance of the organization. 2. Explain How Present Day Managers Convert Potential â€Å"Threats† Into â€Å"Opportunities†. You May Use Examples To Elaborate The Answer. In the modern day phenomenon, it is of no doubt that small businesses are facing remarkable stress in terms of increasing competition in almost every sector of the corporate world. In such a situation, it is quite certain that almost every manager will tend to grab the opportunities served by the business environment and mitigate the potential threats which are likely to obstruct the achievement of the organization. In order to face the challenges raised from steep competition, managers in the present day are becoming more focused on the conversion of potential â€Å"Threats† into expected â€Å"Opportunities† for their businesses (Hitt & Et. Al., 2010). Evidences have revealed that managers in the 21st century often apply strategies in order to convert potential â€Å"Threats† into advantageous â€Å"Opportunities†. Most of the strategies concentrate on the innovation and creation of fresh products and/or services with the assistance of modern technologies and greater emphasis on research and

TOURISM - LEISURE AND SOCIETY Essay Example | Topics and Well Written Essays - 2000 words

TOURISM - LEISURE AND SOCIETY - Essay Example ns pertaining to social standing and status may sometimes happen to be fluid, which may evolve over time, influenced by dominant or popular traditions and values. Still, there is no denying the fact that the individuals affiliated to the same social standing do share a common lot of beliefs and values that enable them to recognize themselves as having a unique status, which may be real or imagined (Anderson 1991). Hence, social identity and status mostly correspond, irrespective of the cultural, racial and ethnic disparities within a society. This correspondence of social identity and status sans economic and demographic disparities portends multifarious ramifications for the tourism industry the world over. Social identity and status are the concepts, which are many times not directly observable or discernable, but inferred from various ways and patterns of group expression, tourism and leisure qualifying to be one important manifestation. Going by this fact, many nations and touris t destinations are vying with each other to come out with tourism management policies and strategies, which have notions of social identity and status incorporated and adjusted within them (Henderson 2001). Such tourism strategies have observable and coveted economic, political and social agendas embedded within. Thus, the concept of tourism, and the old and new perceptions pertaining to it often portray narratives associated with unique symbols of social identity and status. The concept of tourism and leisure had the notions of social identity and status amalgamated with it at the very time of its conception in the early 19th century. Thorstein Veblem in his acclaimed work ‘The Theory of the Leisure Class: An Economic Study of institutions (1902)’, meticulously elaborated on the concept of leisure and tourism being intricately associated with social entities like wealth and status. According to Veblem (1902), the middle and working class in most of the developed countries have the

How Young People Represented in Eastenders and Hollyoaks Essay Example for Free

How Young People Represented in Eastenders and Hollyoaks Essay Eastenders is a British Soap Opera, first broadcast in the UK on BBC1. It’s about people who works and live in the frictional London Borough of Walford in the East End of London. The scenes usually around the Albert Square. This soap originally played in the TV as two half-hour episodes per week since 2001, for episodes are broadcast each week. It is one of the UK’s highest rated programmes. It’s created by two person called Julia Smith and Tony Holland. Hollyoaks is a long running British Soap Opera firs broadcasted on Channel 4 in 1995. It’s created by Phil Redmond and Directed by Ross Knowles and Robert Duffey. This programme is set in a fictional suburb of Chester called Hollyoaks. Scenes usually around the education college called Hollyoaks Community College. The characters are people who are in their late teens or early twenties. The series are filmed at Lime Pictures. There are many conventions in the soaps. Cliff hangers are is a practice of ending of an episode which leaves the character in a seemingly impossible situation or something really exciting happens. The purpose of this that it makes the story so interesting which makes people want to watch the next episode of the soap. Moralistic storylines are usually main theme of the story; the lesson the main character learns. Usually people who watching the soap learns from that storyline. For example for a moral storyline is could be that: a girl steals another girl’s roller-skate, the moral in this that stealing is wrong. Multiple storylines are means in a soap that lots of different lines going on. For example that a lady has a baby, someone had a car crash, while the school burnt down. Realism is also important for a soap opera because who watching it has to believe in that it’s ‘real’. For example people can’t sell a pen which cost 50p for  £20.000 because it’s not realistic. Soaps are passing on social messages such as: drunk driving, young pregnancy, taking drugs and so on. The writers passing these messages to do not do any of these by showing their consequences. If people see that 5 people dies because the driver was drunk they might not going the drive when they drinking. Characters from Eastenders I’ve chosen are Stacey Slater and Bradley Branning. Stacey had arrived in Watford at the age of 15 and she stayed with her uncle Charlie. She had been causes troubles with her behavior. She had been thrown out because of her behavior. She falls in love with Bradley BranningStacey represented like a bad teenage girl with lots of boyfriends. She also had taken drugs in the past. She not very educated. She worked at a stall. She was pregnant but had an abortion. Bradley represented as a quite clever teenage boy. He has a good job at the bank. Was in a relationship with Stacey. He sexually harassed by his boss. He flirted with lots of girls/women. He flirted with her colleague as well. I’ve chosen these characters because I thought they are exciting to me. Characters from Hollyoaks are Ste Hay, He has some wicked ways. It hasnt all been plain sailing for him. A job at chez brought him into the flight path of one Brendan Brady and so began the twisted love/hate/love/hate/love romance that is Stendan. All sorts of obstacles have come between them pregnant girlfriends, fitness instructors, angry wives and long lost sons; however it was Brendans issues with his sexuality and his propensity for violence that stopped them truly being together. Leanne Holiday is a blonde, petite, button-nosed; Leanne looks all sweetness and light. She first came to the village as fiancà ©e to Lee Hunter, who was returning to the village after a five year absence. Hardcore fans will have followed their engagement in the online drama Fresher’s. Wandering eyes from both parties soon caused trouble in their relationship, Leanne snagging Doug and Lee falling for Amy. She always chases boys. Young people in Eastenders represented more badly, in there are young pregnancies and other bad stuff going around the young characters. In Hollyoaks the young people are mostly represented as a studying respectful teenager. So the young people in Eastenders represented most likely as bad, while in Hollyoaks they are represented as goods. I think in Eastenders and Hollyoaks young people are represented in the way how the young people act or behave in the real life. Some young people having in trouble some of them are behaving well and doing their work and just being normal.

Evolution Of Human Resource Management In The World Business Essay

Evolution Of Human Resource Management In The World Business Essay Human resource management is defined as the strategic approach to manpower management in an organization and also this is a function of the company which focuses on recruiting the management to provide further information to the employees, how to take the business to the top level. This process is really important to todays businesses, it studied that employees working in teams or individually are the two main contributors which helps to succeed in the business objectives. The managers of the businesses in this generation are responsible in selecting employees, planning the goals of the company, planning how the business can use the resources in effective ways, assigning tasks for the employees, giving information to the employees how a task should be completed by using few resources, giving feedbacks how they can change their behaviors, introducing new technology to improve performance of the employees, taking responsibilities of the entire business and most importantly being a role model to the employees and working hard to give the best services to the customers. Human resource management is the business function that deals with issues related to people such as compensation, hiring performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration and training. An effective human resource management focuses on managing the employees effectively and productively to the entire business in order to accomplish the companys goals and objectives. Today the target of human resource management is to recruit the employees by providing development programmes and scholarships rather than depending on traditional personnel and transactional roles which are increasingly outsourced. The features of human resource management include; organizational management, personnel administration, manpower management and industrial management. Human resource management works hard to have a good relationship between traditional management functions and the skilled employees with in the business. Employees are highly treated by having a closer look of their skills and experience. The employees have to get the full knowledge of the particular field and have to be skilled. Moreover, the human resource manager perfectly empowers inter-department employee relationships and nurtures scope to have a great communication in all levels of the business. In this modern world it is a must to have a Human Resource Management Department which relate with legislature of all factors of production. This department is responsible for the development and application of ongoing research on strategic advances while hiring, terminating and training staff and also this department is responsible in various areas of the business like identifying the areas where there are lack of knowledge and inadequate training and to overcome these problems worksh ops and seminars are conducted. Furthermore, recruiting the workforce, developing the relationship between the employees inside the business and development of a uniform organizational culture, identifying what the employees need (necessary resources) and career goals, understanding and relating to employees as individuals, fulfill the strategic approach in order to maintain competitive advantage, motivating and supporting the employees so that they will get courage to do their tasks well (this is achieved by workforce planning and recruitment , employee training, induction and orientation of hired task-force and administration and appraisals). Strategic Human Resource Approach really helps for the progress of the business. It is defined as the linking of human resource with strategic goals and objectives in order to improve business performance and develop organizational culture that maintain innovation, flexibility and competitive advantage. In an organization strategic approach is implemented through recruiting, selecting, training, rewarding the employees and increasing the employees productivity by focusing on business obstacles which happen in the external environment. The target of this approach is to focus on long-term objectives like addressing and solving problems of the business in the long-run of the business and internationally. In this competitive world everything (internal and external) of a business is changing. Modern trends are increasing and this is becoming an important factor for an efficient business. The huge changes of the businesses have also changed human resource management to personnel management and personnel management to manpower planning and the businesses are focusing on strategic approach which helps in the long-run of the business and helps to gain competitive advantage for the business. Moreover, recruitment of staff focused to geocentric from ethnocentric and polycentric which is more efficient because the employees are selected based on their attitudes and skills. These days recruiting is also done by the effective policies like using of headcounters, cross national advertising and E-recruitments. In the early days the employees have to work for long hours and are not well paid. Furthermore, they are not provided with quality requirements and the work place is unhygienic but now ever ything has changed. Under the strict rules and regulations of the government the owners of the businesses are forced to set up a formal mechanism to look into employees wages and welfare and reporting the issues through labor. Moreover, the employees are provided with the latest technologies with all the requirements they need while doing the tasks. In the workplace the employees are provided with modern furniture and the place is designed in an attractive way for the customers and for the employees where the employees can work much comfortably. There have been huge changes between the personnel management and human resource management in many ways like ; the recruitment and the skills of the employees have began to increase workers commitment and loyalty and also motivation helped to have a active social community within the employees, fringe benefits rather than monetary incentives. In addition, with the introduction of performance on pay, employees stock option the Wage and Salary Administration became outsource. The behavioral training to change attitudes and develop basic skills are focused then remaining incomplete to in calculating work proactive, with new techniques such as management by objectives rather than the report-card based performance. Human resource is going through huge transformation in the business approaching and are automating and outsourcing many management functions which will increase new skills in order to fight with the competitors. Moreover, the human resource professionals say that some of the standard nich-such as human resource generalist and benefits specialist will become less common and less important, giving way over to new ones such as human resource financial analyst and when we have a clear look the human resource people who have done amazing tasks like in the process redefining themselves and their profession can be in a top level with rewarding careers than human resource people who have worked in this long time ago. In the past the role of the administrative department was hiring employees, paying employees and dealing with benefits as at that time these were the functions the businesses needed. Moreover, at that time human resource managers role was aligning employees and management functions that were viewed by the business as paperwork. In this generation there are many different roles and responsibilities of the human resource management. The small businesses may take full responsibility for all human resource activities and huge businesses, this act as an internal consultant and all the human resource description are done with the support of strategic business direction. Some of the roles and responsibilities are training and development, recruiting, productivity improvement, managing the salary, employee services and strategic planning. Technology plays an important role in the human resource management. In the past there were only telephones, typewriters and the time clock in order to manage the works of the business and now all the businesses are computerized, managers have to deal with; multimedia, internet, local area networks i.e and human resource works are dependent on the technological lending edge. To identify the skilled workers who have applied to the job, through applicant-tracking system it is easy to find and to save time the employees learning needs are assessed through a computer dialog. Moreover, automatically the employees attendance is recorded in the computers. Technology makes the human resource management works much easy. When we have a broader picture about the future of the human resource management there might be labor supply. Some experts say that there will be a change in the employment relationship, not a demographically driven shortage of workers; but I agree with the author, Losey. He says there will be a real labor shortage requiring improved recruitment and retention strategies as well as better understanding of why employees really leave organization. Moreover, the skills have to be improved; new roles have to be developed like without giving up human resources human core and offering product lines to serve the larger business. For the future of human resource management applying scientific approach is a good way where professionals can make recommendations based on data and evidence rather than on personal preference.

The Modigliani And Miller Theory Finance Essay

The Modigliani And Miller Theory Finance Essay The Modigliani Miller Theorem is a linchpin of modern corporate finance. At its core, the theorem is an irrelevance proposition: The Modigliani Miller Theorem provides circumstances under which an enterprises financial decisions are independent on its value. Modigliani (1980, pxiii) explains the Theorem as follows: à ¢Ã¢â€š ¬Ã‚ ¦ with well-functioning markets (and neutral taxes) and rational investors, who can undo the corporate financial structure by holding positive or negative amounts of debt, the market value of the firm debt plus equity depends only on the income stream generated by its assets. It follows, in particular, that the value of the firm should not be affected by the share of debt in its financial structure or by what will be done with the returns paid out as dividends or reinvested (profitably). There are four distinct results that are understood from the Modigliani Miller Theorem and they are as follow: The debt-equity ratio does not affect its market value under certain conditions. The second proposition inculcates that a firms debt-equity ratio is unaffected by its weighted average cost of capital that is the cost of equity capital is a linear function of leverage. Firms market value is sovereign of its dividend policy. Stock-holders are non-chalant about the firms financial policy. The modern theory of capital structure started with Modigliani Miller(1958) on the plight of capital structure irrelevance. The distinct results shown above were based on the following assumptions: Market prices cannot be influenced by scale of an individuals transactions that is all investors are price-takers. Firms and investors being market participants can lend or borrow at the same riskless rate. Income taxes are neither paid on the corporate level nor at a personal level. There are no transaction charges or allowances. Investors are all rational wealth-suitors. Enterprises are grouped into homogeneous risk classes such that all members of the group obtain the same return. Similar expectations about future company earnings are formulated by investors ( normal probability distribution). The assets of a company that can no longer carry out its business( insolvent) can be sold at full market values. Criticism of the Modigliani and Miller theory There is a common argument that Modigliani Miller provides a means of finding reasons why financing may matter but does not provide a reasonable description of how firms finance their operations. This is supported by a number of researchers such as Hamada (1969) and Stigiltz (1974). The theorem has given rise to a lot of questions. How do firms choose their capital structure? Do firms have target leverage? What are the determinants of firm capital structure decisions? Many researchers have tried to answer these questions in their studies but the results are still enigmatic. The most frequent hypotheses used to address capital structure are static trade-off, pecking order and market timing theory and many others. The criticism against this theorem can be grouped into two types: Papers that deal with the limitations of the arbitrage conditions. Arbitrage process is the operational justification for Modigliani and Miller hypothesis. Arbitraging can be defined as the process of buying a security in a market where the price is low and selling the security in another market where the price is higher. In so doing, an equilibrium is achieved and it implies that the security cannot be sold at different prices. According to the MM hypothesis, the total value of homogeneous firm that differ only in the debt-equity ratio will be similar due to the artibraging condition. The later is no longer smooth due to institutional restrictions and it is also affected by transaction cost due to the limitations of the MM hypothesis. The MM leverage irrelevance proposition bumped much controversy and criticism on the methodology section. Their proofs are based on a more appropriate and fundamental notion than a competitive equilibrium. This is where the arbitrage argument comes into play. When the arbitrage is absent, the economy becomes standard to price repetitive securities and Black Scholes (1973) depended on the MM- type arbitrage argument which was rather clumsy as it was engaged with the comparision of firms whose cash flows had similar risk characteristics. According to Stiglitz ( 1969)  [1]  , firms do not issue much debt as there is the consequence of bankruptcy. The focus switched from the idea of risk class to the importance of bankruptcy. Studies that analyse the effect of market imperfections on the firms choice of capital structure. Taxes, bankrypcy costs, transaction costs, adverse selection and agency conflicts are all part of the major explanation for the use of debt in corporate. Trade-off Theory The various costs and benefits of an alternative leverage plans are assessed by a decision maker who runs a firm. The trade-off theory is originated from a debate over the Modigliani and Miller theory. This is due to the addition of corporate taxes to the primitive irrelevance proposition. A debt benefit is seen to be created which serve as a shield before the takes. Bankruptcy is the offsetting cost of debt that is needed. The optimal debt-equity ratio mirrors a trade-off between the tax benefits of debt and deadweight costs of bankruptcy Myers (1984). A firm that anchors a target leverage ratio and gradually moves towards the target is a firm that follows the trade-off theory. The determination of the target is made by stabilizing the tax shields against the cost of bankruptcy Jensen and Meckling (1977); Harris and Raviv (1990); Taggart (1977). It also weighs up the advantages and disadvantages of using debt. As discussed earlier, there is a shield benefit that acts as a barrier to taxes DeAngelo and Masulis (1980). In addition, there is a reduction of the free cash flow problem Stulz (1990). However, the pitfalls of debt include the feasible cost of financial distress Kraus and Litzenberger (1973); Kim (1978) and the agency cost arising between the shareholders and the creditors. Frank and Goyal (2005  [2]  ) take the Myers earlier notion of trade-off to a new position namely the static trade-off theory determined within a single period and a target adjustment behavior. Agency Cost Theory Jensen and Meckling (1976) launched the agency cost of free cash flow theory. The theory is hinged on the conflict between managers, outside shareholders and bondholders. The conflicts can be either between the bondholders and shareholders which is a result of moral hazards or between managers and shareholders.. According to this theory, the managers do not always use the funds of the firm for the benefit of the company but rather for their own benefits. The managers exploit the powers they have and the abuse can be categorized in three different varieties. Foremost, managers possess ground on which they can enjoy the full value of anything they get from the firm such as private jets since they hold only a fraction of these allowances on the job consumption. Second, they might assay for the entire building as large firms have a tendency to give managers prestige, power and compensation for the work they do just to encourage them. Lastly, they have the power to tyrannise the firm acco rding to their own preferences and make themselves prerequisites by investing in projects which others cannot manage. This negates the wealth of the shareholders.. Harris and Raviv (1990); Bodie and Merton (2000) agency cost is seen to be more relevant to firms in mature industries. As these firms tend to generate cash which exceeds their investment needs. The availability of free cash in mature industries is higher and easily used for the management of the firms. Nyborg (2010). Therefore, it is true to say that agency cost is more relevant to larger firms. Market Timing Theory The market timing theory is based on the fact that enterprises prefer to issue stocks when the prices of the stocks are high and repurchase the stocks when the prices are falling. The assumption they make is that the market can be timed and managers really try to time market. The issue of debt and new equity can be made based on past price movements Marsh (1982). In a survey of British firms, CFOs harbor that they try to time the equity market. Those who considered the issue of shares reported that the amount by which the stocks are undervalued and overvalued is an important factor Graham and Harvey (2001). The shocks of equity price have an inexhaustible effect on the corporate capital structure. Following increments in stock prices, firms tend to issue equity and repurchase shares when the stock prices decline which is actually the opposite of what one might expect if corporate tended to equalize their structures towards a target Welch (2004). Fischer, Heinkel and Zechner, (1989) observed that with new debt and equity issues over time, firms tend to return to their preferred leverage range. More specifically, firms are forced to march out from the preferred level of debt to equity ratio by embrassing more debt as a source of financing to new projects or as a way to self- defend themselves against take-overs show a transcendence to paying down debt to rebound to a more acceptable mix of leverage. Muscarella and vetsuypens, 1990. The Pecking Order Theory Donaldson (1961) had been the first one to describe the prominent story based on a financing pecking order. He monitored: Management strongly favoured internal generation as a source of new funds even to the exclusion of external funds except for occasional unavoidable bulges in the need for funds.  [3]  According to the picture that Donaldson framed, companies quietly complied retained earnings, becoming less tilted when they are lucrative and gather debt, becoming more uplifted when they are unprofitable. If companies are otherwise heedless about their capital structures as suggested by Miller (1977) then they will not make future capital structure selections which compensate the effect of their earnings history. But the common pecking order theory branches out from Myers (1984). A firm pursues the pecking order if it prefers  [4]  internal financing and debt equity if the external financing is used. The pecking order theory is proposed by Myers and Maljuf (1984) and is an application of asymmetric information theory. Following this theory, the managers of a firm who are considered as insiders are likely to posses private information about the firms quality and investment projects. Ergo, the choice of a firms capital structure strikes the outsiders who are actually the investors the information to managers. Because outsiders have less information than the managers regarding the value of the firm, the issued equity will be underpriced by the market. Financing the project through a security will prevent such a situation to crop up that is the security will not be undervalued by the market. The securities used can be in the form of retained earnings as internal funds and risk-less debts. Hinged by the argument set by Myers and Maljuf (1984) , Myers (1984) suggested that the pecking order theory propose that firms finance their projects by firstly using internal funds in the form of retained earnings, secondly through the utility of debts ( risk-less debts are used first and when there is a shortage or there is no more of the risk-less debt, risky debts are used) and finally equity is issued. Pecking Oder Theory speculates that managers do not take into consideration an optimal capital structure when making financial decisions.  [5]  They unpretentiously choose what seem to be the low cost financing devices. Why do firms prefer debt to equity? In corporate finance, asymmetric information refers to the fact that firm insiders, routinely the managers have better information than market actors on the value of their firms asset and investment opportunities. The possibility that the market will wrongly price the firms claim is created by this asymmetry thus providing a positive role for financing decisions of companies. Let us think of a firm who wants to make new investments by making use of its growth possibilities. Given that this firm solicits to supply the resources, it needs to issue stocks. The stocks cannot be fully valued by the investors Myers (2001). Pecking order theory is born due to mispricing which comes to light as a consequence of not knowing the actual values of equity. The existence of asymmetric information lies in the middle of mispricing Halov N and Heider F (2005). As a result of the asymmetric information, the firms quality as good issue stock to find resources, the issued equity are undervalued by investors koupoulos (2006). Since a price cut is liked to be observed from the investors and to avoid this situation internal resources are preferred rather than issuing equity to finance investment without incurring any cost that arises from asymmetric information. Fama and French (2002) found that later supply resources used in investment financing are debts as they bear a low risk. Due to the problems that are initiated by asymmetric information, firms hash external resources use as a cheaper policy as compared to the issuance of equity. There are several reasons why firms consider external financing as a better option to finance investment. One of them is the position of organizational sales. Enterprises with sturdy sales line gives the supremacy to finance through debt for their needs by availing form market trust towards them. These firms, therefore, have no trouble in repaying their debts due to the stable sales and their earnings. They are also liable to having recourse to debt more easily. Additionally, size and structure of firms is another factor to be considered. Firms having more accessorized assets put borrowing first in line of their resources list since they will easily get debt. Tax advantage is as well a factor that can be added to the above list as it prioritize debt financing. A correction on the original model has been suggested by Modigliani and Miller (1963). In the new model, they clearly incorporate the corporate income tax, while the other assumptions were kept untouched. Assuming ceteris paribus, the value of the firm (VL) will be maximized as it is a function of the market value of debt. In theory when the levered firm reaches its maximum market value as it is financed entirely by debt. To finance their needs of financing, the firm should use as much debt as possible. To further relax the Modigliani-Millers assumption, Miller (1977) introduced personal taxes together with corporate taxes into the model assuming that all enterprises have similar tax r ates. According to him, the relatively higher personal income tax paid on bonds by firms should be grossed up by any differential that bondholders will pay on their interest income otherwise, bonds will have no value and no one would want to hold bonds. Therefore, in equilibrium the debt advantage is negligible. De Angelo and Masulis (1980) brought in the recognition of the existence of a non- identical marginal tax rates among different firms and the outcome of tax-shield items in the financial statement other than interest expenses. As far as capital structure is concerned, they brought in two implications. First, in equilibrium a firm who is considered as a borrower benefits from a positive gain from leverage if the tax rate is higher than the marginal firm because of a low pre-paid interest rate they pay. Moreover, items such as depreciation, oil depletion allowances and investment tax credits are defacto non cash charges. They predicted that there is a positive relationship bet ween the level of debt and the effective tax rate and a negative relationship to the amount of non debt tax shields available to them. The interest rate of debt users is deductible from tax base which in turn relinquishes the importance to debt instead of equity. Equity financing confers rise to transaction costs and to avoid this problem financing through debt is viewed as another reason Fama and French (2004). In addition to that, uncertainty of control that might be experienced in enterprises is seen as a plausible factor. The presence of new shareholders confirms the fact that they will prefer stock financing as a lack of resources and will eventually give rise to risk of management control in firm whilst in financing via debt, there is no such risk of control loss. Lamont (1997) evaluates that more than three-quarter of corporate investments in US are made through internal financing. Further, Fazzari, Hubbard and Perterse  [6]  n (1988) has shown the delicacy of investment to internal cash flow, accenting the cost advantage of internal resources and thus explaining the fact why firms have recourse to external funds. Leary and Roberts (2005) also found that firms will not have recourse to external capital markets if they have sufficient internal funds but they are more likely to make use of the external funds when they have big investment needs. Event studies also provide a significant amount of evidence indicating that information is conveyed. Repurchases made through debt had larger announcement returns than those financed with cash thus representing larger increases in financial leverages Masulis (1980) and Vermaelen (1981) ). Heinkel and Zechner (1990) analysed an expanded catalogue of risky securities that include preferred stocks. Assuming a given capital structure and asymmetric information about investment quality, they showed that in an amalgamated equilibrium, all stock firms tend to overinvest and accepted some negative NPV projects. The overinvestment can be eliminated by issuing an initial debt which resulted in an optimal leverage ratio. Besides, an underinvestment problem is created if managers make use of more debts considering the tax advantage of debt. Nevertheless, a kindred issue of preferred stocks will enable the firm to issue a higher level of debt desired without creating the problem of underinvestment. Therefore, managers develop an optimal capital structure with debt, preferred stocks and common r which is consistent with the pecking order theory. There are also researchers that went through adjustments of capital structure around long run optima.  [7]  Marsh (1982) was one of them as he predicted that firms that have a leverage ratio below the average for the last 10 years are more likely to issue debt. Jalilvand and Harris (1984) is consistent with the results of Marsh (1982) as he shows that 108 of US manufacturing firms tend to issue long term debt when the long term debts are below average. The Pecking order theory is tested on both large firms and small firms. Most of the studies have been carried out on large firms. Few studies focused on small and medium sized firms. Since SMEs confront more information asymmetry problem, it is said that the financing decisions of SMEs are better explained by the pecking order theory. Consequently recent studies have attempted to explain the financing decisions of small firms in the context of the pecking order theory. They also argue that there is a lot of differences between large and small firms. It is not only a matter of size, this is why accurate models are used to study the decisions of the latter. The problem of information asymmetry is more persistent within small firms than in large firms. This is due to the scarcity and informality of information that is available. The financing structure of small firms is explained by using a financial growth cycle by Berger and Udell (1998). (à ¢Ã¢â€š ¬Ã‚ ¦) in which financial needs and option change as the business grows, gains further experience, and becomes less informationally opaque. For the first two years namely the initial stage or the infant stage, companies face more information asymmetries as their main source of funds are from friends and relatives, trade credit and investors. As the age and size of companies become large enough, credit from financial institutions become more available. This is a typical view of pecking order where the degree of information asymmetry decreases as the firms grow in size and experience. Small firms find external equity costly due to the fixed costs of initial public offerings. Chittenden et al (1996). A SME pecking order was described by Zoppa and Mc Mahon (2002).  [8]  As pecking order theory prescribes, the internal funding is the first choice. In second position, the company uses short -term debt which includes trade credit and personal loans. Long-term debts are then used which include loans from owners, family and relatives. The last alternative is equity. The study of Gebru (2009) is found to be consistent with other studies as pecking order theory holds to be true for SMEs. The sample used is from Tigray and it is seen that the educational level of owners decreases and there is less intrusion in the form of ownership. Ownership type, acquisition type and owners level of education are found to be the major determinants of MSE financing preferences. However, Murray and Goyal (2003) demonstrated that pecking order theory fails where actually it should be liable and this applies for small firms where the main problem is information asymmetry. Various studies have been carried out to test the validity of pecking order theory. Evidences have shown that many researchers are for the theory and the others are against and they are as follow: Shyam- Sunder and Myers (1999) proposed to investigate the pecking order theory in the US market. According to them, the pecking order was described as an excellent first order caption for financial behaviors of companies. The slope of a firms deficit is alleged to be equal to one and the coefficient of the intercept is zero if the pecking order holds. The regression is made to the change of debt in year t. Besides, results unveil that pecking order shows a greater confidence when tested with the target adjustment model. However Chirinko and Singha (2000) examined the interpretation of Shyam- Sunder and Myers (1999) regression test as it showed that the hypothesis test used by the later suffered from statistical power problems. These problems mustered the questions about the validity of inferences hinged on their new testing strategy. The former found out that the assumption of the slope of the deficit being one was not a necessary assumption for pecking order theory to be valid. The slope coefficient would equal to one if pecking order holds and will fall short to unity if the pecking order is not valid. Coupled with the above, the importance of information asymmetry as a determinant of capital structure as proposed by pecking order theory is tested by Bharath, Pasquariello and Wu (2009). It is seen that for the period, the test was carried out, information asymmetry did actually affect the capital structure decisions of US firms. They estimated that for every dollar of financing deficit to cover, firms in highest adverse selection decile issue more debt than those in the lowest decile. They also found out that its only when information asymmetry is to its minimum that firms will prefer to issue equity. These evidences explain the partial relevance of pecking order theory. Besides, Lemmon and Zender (2006) tested the modified version of pecking order theory. The debt capacity of a firm is taken into consideration. They wrangled that the financing choice of firms may depend on its debt capacity. This is because they believe that to fulfill financing needs, some firms may save on the debt capacity. Internal funds remain first on the financing list for all firms. Firms that are flexible to debt capacity will chiefly use debt to fill their financing deficit. Hinged on these findings, they came to the conclusion that the firms debt capacity is a good descriptor of financial behavior and goes along with the modified version of pecking order theory. Tong et al (2011) tested the static trade off theory against the pecking order theory for US firms. According to them, pecking order theory produces issuance of debt until the debt capacity is attained. Their evidence indicated that pecking order is a better headline for US firms issue decisions than the static trade off theory. The Australian case was evaluated by Suchard and Singh ( 2006). The Australian market can be distinguished from typical US and European markets as it has many distinct characteristics. They found out that listed debt market was limited. This is mostly where firms obtained bank debt, debts that are convertible but not callable and stand alone warrants which are used to raise capital. They examined the determinants of security choice for hybrid issuers based on these differences and claimed that the results supported the pecking order theory. Coupled with the above, the linkage between managerial optimisim and corporate financial decisions was verified by Lin et al (2008)  [9]  . The evaluation was carried out by testing the Heatons (2002) model. Apart from information asymmetry, managerial optimism also contributes in the pecking order theory. Lin et al (2008) wanted to know if the pecking order preference was better when the managers were more optimistic. Listed Taiwanese companies were used in their sample and a stronger relationship was found between the issuance of debt and the financial deficit which is consistent with the model used by Lin et al (2008). In contrast, Faulkender and Wang (2006) provide restrained evidence for the pecking order theory. According to them, approximately a value of $1.43 is placed on companies cash holdings by investors of equity firms. This is done as it prevents a company from paying costs when raising capital in the market. Since, external financing becomes more difficult and costly to obtain, the cash value is higher for firms facing hindrance on additional financing. However, the cash value decreases as cash holdings become larger, high leverage, better cash to capital markets and larger cash distributions through dividends rather than the repurchase of shares. Next, many individual financing decisions of firms were screened by Fama and French (2005).  [10]  They found that these decisions were in contradiction with the important prognosis of pecking order theory. To give an example of the contradictions, pecking order theory states that equity issues should be the last option to be used but yet, it is observed that most firms issue some sort of stocks annually. Leary and Robert (2010) contended that pecking order theory was no way able to meticulously classify more than half of the observed financing decisions of US firms. They also suggested that the little pecking order behavior that was seen was due to incentive conflicts rather than information asymmetry. Further, Gonenc (2008) studied to verify the extent to which pecking order theory was incorporated in corporations in the US, the UK, Germany and Japan. They speculated that investors from the UK and US had an asymmetric information problem which was caused by the large spread of equity being owned. He proponed that in these countries, two managers and insiders have more information than outsider investors. German and Japanese investors faced the same asymmetric information problem mainly due to the less information flows. But evidences have shown that US, UK and Germany firms were not very supportive when it came to the pecking order theory while Japan supported the pecking order theory during the 1980s and 1990s. The impact of industry membership on the capital structure dynamics were scrutinized by Tucker and Stoja (2011) over the period from 1968 to 2006. They recommended that pecking order theory could explain only a few aspects of UK corporations capital structure policies, but it does not give an adequate explanation of their behaviours in the real world. More explicitly, they perceived that in the short run, old economy firms followed the standard pecking order theory but the new economy corporations prefer equity to debt when external funds are required. The incremental financing decision for 150 Dutch firms was estimated for the period of 1984 to 1997 by Haan and Hinloopen (2003). A distinction is made between internal financing and three types of external funds: bank borrowing, debt issues and equity issues. They concluded that Dutch companies had ingrained financing preferences namely, internal financing was preferred in the first position, bank loans are used secondly, thirdly equity are issued and finally bonds are issued. In addition, an investigation was carried out by Delcore (2007)  [11]  as to whether capital structure determinants in emerging Central and Eastern European (CEE) countries followed the traditional capital structure theory. The explanation of capital structures in CEE cannot be made by the pecking order theory. They came to the conclusion that there are factors that influenced the leverage decisions for CEE countries and they were: the difference of banking systems, disparity in legal systems governing corporate operations, shareholders and bondholders rights protection and corporate governance.