International Finance & Financial Management Essay

International Finance & Financial Management - Essay Example Part 1 Shareholders’ and stakeholders’ value: Freeman, Harrison, Wicks, Parmar, & Colle (2010) observe that the primary objective for any business is to maximize its shareholders’ value as well as stakeholders’ value. The increase in shareholders’ value primarily results from the growth in the business with growth in top-line (sales revenue) and also increase in the bottom-line (profit). The shareholders of the organization contribute equity capital to the organization, which is required by the organization to grow and develop its business. So it is highly important that the organization provides maximum possible return to its equity shareholders. A company takes part in growth strategy by taking the path of acquisition, by venturing into completely new areas and also in new business basically to help the business grow thereby contributing to the growth in its profit. This helps in generating effective returns for its shareholders who are considered the owner of the organization. The company should basically look at value maximization of its shareholders and provide for the risk being taken by the shareholders’ in proving capital to the organization. The stakeholders of a company comprise all the participants who take effective part in the operation of the company. The stakeholders primarily include the customers who are the most important part of any organization, the suppliers of raw materials, the creditors, the employees, the community, the Government, the environment and even the shareholders’ who are directly affected by the business activities. (Freeman, Harrison, Wicks, Parmar, Colle, 2010, pp.128-131) Potential value of Synergies due to Acquisition: In recent times there has been a rapid increase in Mergers and acquisition activities. Companies are taking part in these activities effectively to enhance the business growing opportunities contributing to increase in shareholders’ wealth. Bosecke (20 09) and Hunt (2009) observe that there is a set of complex reasons, which drive a firm to promote M&A activities. The Efficiency Theory clearly elucidates the main goal of M&A activities is to exploit synergies where synergy is basically the increased operational performance as a result of combined entity than that of single isolated firms. There may be positive synergies when the net combined effect of synergy produces more value than individual firms and if the synergy is not effective it causes negative synergy. There may be other synergies like Financial, operational and managerial synergies. The financial synergy basically results from lower cost, which calls for investment in unrelated business, which effectively reduces the systematic risk for the organization. Moreover capital costs can be reduced when the company grows in size and have access to cheaper capital. Sometimes larger companies basically venture outside to raise cheaper capital, as the cost of raising capital in countries like USA, Japan etc is very low. The companies, which are involved in mergers and acquisition internationally, can access the stock markets of those countries and in that case they have to comply with the specifications and regulations binding the process of accessing the international markets. This promotes international acquisition. The managerial synergy basically results when one less technically and functionally developed company derive benefit after getting merged with one technically and f

United States Health Care Reform and Accountable Care Organizations Research Paper

United States Health Care Reform and Accountable Care Organizations - Research Paper Example The U.S. health sector is very inefficient in terms of cost levels and in order to bring this down this paper discusses the implementation of Affordable Care Organizations and whether or whether not they will be able to remedy this situation. If indeed, ACOs benefit the health sector over the years as predicted by studies the U.S health sector will be able to lower costs and increase the quality of their health care. The United States Health Sector has gone through many reforms over the years and has recently been subjected to the Affordable Care Act which calls for Accountable Care Organizations within the sector to increase its efficiency of functioning. With the ACA up and running, the health sector seems to have a much better chance of improvement, however this wasn’t always so. Body President Harry Truman initiated the idea of a socialized healthcare program in the United States in the period 1945-48 but was put down by the American Medical Association (AMA). However, Medicare was finally made operational in 1965 under President Johnson’s socialist regime. (Oliver, Lee and Lipton, 2004). From the end of the 1960s to the end of the 1990s prescription drug coverage was never an independent factor that fell under the responsibility if Medicare. It was only until the end of the Clinton regime that this issue came to light. Towards the end of 2003, President Bush added the coverage of prescription drugs under Medicare which was one of many other changes to the organization. The implementation of these changes will increase tax burden on the population by roughly in the bracket of $400-550 billion in the future. The population had a 60/40 negative/positive stance about the new reforms respectively. (Oliver, Lee and Lipton, 2004). There was a gigantic increase in the price of medical drugs around this time and Medicare’s expenditure which used to amount to $700 million in 1992 was costing Medicare around $6.5 billion in 2001. Obviously, their costing system was hugely defected. (Oliver, Lee and Lipton, 2004). The explosive increase in the price of prescription drugs also allowed greater power to pharmaceutical companies who realized that on this scale the stakes were larger and politics came into play; since the drugs were too costly the federal government would have to sponsor their coverage. (Oliver, Lee and Lipton, 2004). Another issue that has remaine d persistent where American healthcare is discussed is that of the racial partiality with respect to adequate healthcare provision. In 1993, it was estimated that the life expectancy of African Americans was roughly 7 years less than that of white Americans. This difference was attributed to mortality rates and the differences in income distribution. But the truth according to research was that black Americans were not allowed as much health care as their white counterparts. (Bhopal, 1998). There are also language barriers to effective health care provision in the United States. A research paper describing this situation tells of a situation of this boy called Raul who spoke little English, his mother who spoke no English and was describing his condition to a doctor and the doctor who spoke very little Spanish. His mother was telling the doctor that her son had been dizzy the day before; the doctor took it to mean that Raul had been looking a little yellow. When confirmed from Raul, the doctor was told that his mother was saying that Raul had been