Child Devlopment Essay Example for Free

Child Devlopment Essay Cognitive Development consists of imagination, sequencing, problem solving and memory, all these are featured in the boy I observed, Aaron King who was the little boy I chose to observe. He is a four year-old preschooler at the above named learning center. I started observing Aaron at the beginning of their circle time. During the circle time, Aaron amongst other fourteen kids in his classroom, sang the popular American Song: â€Å"IF YOU ARE HAPPY AND YOU KNOW IT, CLAP YOUR HANDS†¦. † While singing this song, the children’s voices were up and loud which indicated that they enjoyed singing songs. Aaron’s participation was great, he was so excited about the choruses, clapping stomping of his feet. All the children in turn repeated and imitated all the actions of the teacher; as she needed the audience and focus of the kids for easy understanding of the wordings including choruses of the song. Aaron standing close to two other kids, a boy and a girl sang the song with seriousness while clapping their hands stomping their feet at the same time. The teacher taught the Safety signs briefly. The children’s literacy is very high while learning safety signs as they were very interested in the emphasis laid in the safety signs. In order to ensure that the children understood what they were taught, the teacher asked Aaron what a particular sign stood for which he answered correctly. For example, stop sign is signified by a red color while â€Å"no bicycle† sign is signified by a cross on a bicycle, so on and so forth. The teacher taught the kids about â€Å"Me† book which described the parts of the body, however, she asked Aaron to touch his hands, elbows cheek which he did correctly. After singing the clapping song and some other songs, the teacher changed the activity to coloring books. Meanwhile, Aaron moved from one place to another. He jumped and hopped around the classroom showing excitement. At a time, the teacher had to sit him down â€Å"Aaron sit down and do your coloring † He sat down to color while another boy watched him doing the coloring. Bryan Joy who sat together sharing the same table with Aaron were also coloring; they also talked to one another in friendly manner while looking at each other’s work. Aaron was as excited as he was coloring his book. He finished his coloring using nice colors to color different animals indicating that he had a good taste. He also made a ship with legos, I asked him why he made a ship, and he told me that he would like to be an architect. Aaron amongst others was able to write their names and figure out pictures on the paper. For example, the letter Bb for ball and drew a line to join the letter to the picture of ball. He was able to do that for all the alphabetic letters to compliment individual pictures on the paper. Soon, Aaron stood up to go to the library; as he got to the place where the inscription of â€Å"Quiet Zone† was, another boy ran towards him and pushed him together with the book that he just picked â€Å"Alphabet adventure†. He staggered, but he immediately got control of himself while he looked so surprised that he was pushed without doing anything. He reported the matter to the teacher â€Å"Ms. Patty, Josiah push(ed) me † then the teacher told Josiah to say sorry to Aaron which he did, then they both hugged one another. Thereafter, he went to sit down quietly in the library corner to read his book. He opened up the book so fast as if he knew where to read, then he stirred at a page that really caught his attention and started reading quietly. In summary, Cognitive Development is a very important outcome of learning for preschoolers as they always have their brain developed through creative arts. This consists of imagination, sequencing, problem solving and memory; all these are featured in the boy I observed. Acting drama is acting another character by putting on the costumes – for example, acting as a professional doctor or a lawyer or a nurse can be an eye opener to the preschoolers on what profession they may aspire to be in the near future; Aaron wants to be an architect, he says he likes to put up beautiful buildings. A good imaginative skill is very important for preschoolers to become smart; similarly, sequencing – doing things in an orderly manner is also a good learning skill. Ultimately, Aaron Kingsland has all these qualities. Child Development 201 A Preschool Language Literacy Development Observation Child’s Name: Aaron Kingsland (An imaginary name) Date: October 7th, 2011 Time: 9:00am – 11:30am. Observer’s Name: - Location:Early Creativity Learning Center Classroom LANGUAGE LITERACY DEVELOPMENT OBSERVATION OF A PRESCHOOLER 4 YEARS OLD. My observation of language and literacy in a preschool classroom for children of four and five years old was interesting. Aaron Kingsland (four years old) was the preschooler at the above named learning center whom I chose to observe. I started observing Aaron at the beginning of their circle time. The kids in the classroom were seventeen in number – eight girls and nine boys. I observed Aaron in particular in the class for two and half hours from the beginning of the circle time till the end. The primary language used by the teacher was English; Aaron also speaks same language as well as the whole class. Language is said to be a means of communicating ideas, feelings. There are four basic developmentally appropriate practices and clear language outcomes in the preschool classroom I observed. They are Literacy Development, Intellectual, Physical, Social and Emotional Developments. Literacy is a very important developmental appropriate practice. The four basic skills which young children need are Speaking, Listening, Writing and Reading. These were ultimately displayed by Aaron in the circle time activities performed that morning. During the circle time, Aaron amongst other seventeen kids in his classroom, started to sing the popular American Song: â€Å"IF YOU ARE HAPPY AND YOU KNOW IT, CLAP YOUR HANDS†¦. † If you are happy and you know it, clap your hands } Thrice. If you are happy and you know it, then your face will surely show it †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. } If you are happy and you know it, clap your hands } If you are happy and you know it, stamp your feet †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦} Thrice. If you are happy and you know it, nod your head †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ } Thrice. If you are happy and you know it, do all three †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. } Thrice. While singing this song, the children’s voices were up and loud which indicated that they enjoyed singing songs. Aaron’s participation was great, he was so excited about the choruses, clapping stomping of his feet. All the children in turn repeated and imitated all the actions of the teacher; as she needed the audience and focus of the kids for easy understanding of the wordings including choruses of the song. Aaron standing close to two other kids, a boy and a girl sang the song with seriousness while clapping their hands stomping their feet at the same time. The teacher taught the Safety signs briefly. The children’s literacy is very high while learning safety signs as they were very interested in the emphasis laid in the safety signs. In order to ensure that the children understood what they were taught, the teacher asked Aaron what a particular sign stood for which he answered correctly. For example, stop sign is signified by a red color while â€Å"no bicycle† sign is signified by a cross on a bicycle, so on. After singing, the teacher changed the activity to coloring books. Meanwhile, Aaron moved from one place to another. He jumped and hopped around the classroom showing excitement. At a time, the teacher had to sit him down â€Å"Aaron sit down and do your coloring † He sat down to color while another boy watched him doing the coloring. All the Children talked and cooperated with one another in friendly manner. Bryan Joy who sat together sharing the same table with Aaron were also coloring; they also talked to one another in friendly manner while looking at each other’s work. Aaron was as excited as he was coloring his book. He finished his coloring using nice colors to color different animals indicating that he had a good taste. Soon, Aaron went to the library and sat close to the place where the inscription of â€Å"Quiet Zone† was hanging. He picked a book â€Å"Alphabet adventure†. He went to report a boy who pushed him on his way to the library to his teacher, he said â€Å"Ms. Patty, Josiah push(ed) me † The teacher took an appropriate action by telling Josiah to say sorry to Aaron and he did, then they both hugged one another. Thereafter, he went to sit down quietly in the library corner to read his book. He opened up the book so fast as if he knew where to read, then he stirred at a page that really caught his attention and started reading quietly and studiously. In summary, Language and Literacy development is the use of words to communicate ideas, listen and comprehend others’ ideas. Reading, talking and expressing what they do and following directions go a long way for preschoolers Through reading, Aaron amongst other peers has book knowledge, comprehension and appreciation of what he read. More importantly, literacy goes a long way in our society and even in the world.

Introduction to Special Education Essay Example for Free

Introduction to Special Education Essay * students with exceptionalities exhibit differences in learning and behaviour that significantly affect their educational potential they have exceptional needs that cannot be met by typical approaches to schooling * special education is constructed and delivered to suit the specific strengths and needs of students with exceptionalities The Modern History Of Special Education. * special types of educational services provided as far back as the 18th century * modern era of special education began in the 1960s during the civil rights movement (rejected existing practices of separately educating students who were different) * early forms of special education designed to reduce perceived threats to normal students History Of Special Education (Legislation Affecting Special Education) * some Canadian provinces enacted special education legislation as early as 1969 * 1975 ground breaking legislation in U. S.  Education for All Handicapped Children Act. * least restrictive environment * individualized education program (IEP) * categories of exceptionality * 1978 Javits Gifted Talented Students Act brought number of identifiable categories to eleven * 1990 Individuals with Disabilities Education Act (IDEA) added traumatic brain injury and autism to create the thirteen categories used today * IDEA â€Å"children with disabilities† instead of â€Å"disabled children† The No Child Left Behind Act: signed into law in 2002 * addresses four critical concerns. * accountability of educators for student academic achievement * flexibility of specialized funding implementation to maximize student achievement * option for parents to change child’s school if achievement is not at expected level * use of scientifically proven methods to have all children reading by end of grade three Is NCLB Making a Difference? Criticisms: * students with exceptionalities not exempt from district-wide or state-wide yearly achievement tests (law recently changed – flexibility option) * lack of available funding. * more emphasis placed on math and reading at the expense of other curricular topics To date, NCLB legislation has not significantly affected special education practices in Canada. How Is Special Education In Canada And The United States Similar? * basic practices follow the same conceptual models * major difference is way it is governed * U. S. operates under federally-mandated laws * each Canadian province and territory has own education legislation * most relevant federal law in Canada is Canadian Charter of Rights and Freedoms Prevalence Of Students With Exceptionalities * vast majority of classrooms now include students with exceptionalities * statistics difficult to acquire in Canada * U. S. Department of Education (2002) * 8. 8% of all students have exceptionalities * 85% of these have mild disabilities * twice as many males as females Inclusionary Practices * until the mid 1980s, special education services delivered wholly or partially separated from regular classrooms * all Canadian provinces have currently adopted philosophy of inclusion. * students with exceptionalities are provided with appropriate educational programming in  appropriate environments * regular classroom is first placement option * Inclusionary Practices * inclusion better than integration or mainstreaming because it does not try to â€Å"fix the child† to suit the system * inclusion does not replace the term special education because it does not provide specific definitions for implementation * educators support inclusion but are concerned about its lack of procedures for implementation Non-Categorical Model. * data-based approach to instructional planning * does not rely on specific labels * proponents feel that labels frequently stigmatize, isolate, and stereotype individuals with exceptionalities * more concerned with functional educational services than outcomes of assessments Categorical Model * students’ needs and abilities are defined and then identified, classified, and categorized * most widely used and accepted approach. * allows educators to design effective educational interventions without over-generalizing the characteristics of specific categories to any one child * textbook emphasizes categorical model * teachers need to know the criteria used to identify students with exceptionalities and how the criteria varies across categories * allows teachers to readily notice problems that children may be having * eliminates confusion and frustration when teaching students with exceptionalities.

Importance Of Capital Structure To A Firm Finance Essay

Importance Of Capital Structure To A Firm Finance Essay Capital Structure of a company refers to the composition or make-up of its capitalization and it includes all long-term capital resources, viz. Loans, reserves, shares and bonds,-Gestenberg Introduction Capital Structure is one of the most complex areas of financial decision making because of its interrelationship with other financial decision variables. Poor capital structure decisions can result in high cost of capital thereby lowering the Net Present Values of projects and making more of them unacceptable. Effective capital structure decision can lower the cost of capital , thereby increasing the value of the firm. It is particularly important for small business owners to determine a target capital structure for their firms, since capital is expensive for such small businesses. Capital structure decisions require considering a variety of factors. In general, companies use debt more when they have steady, constant sales levels, assets that have good returns for loans and a high growth rate . On the other hand, companies that have poor credit ratings, conservative management, or high profitability rely on equity capital instead. Capital Structure Capital structure is a business finance term that describes the proportion of a companys capital, or operating money, which is obtained through debt and equity or  hybrid securities [1]. Debt consists of loans and other types of credit that is to be repaid in the future, usually with interest. Equity involves ownership  interest in a corporation in the  form  of common stock or preferred stock. Equity financing does not involve a direct obligation to repay the funds which is in contrast to debt financing,. Instead, equity investors are able to exercise some degree of control over the company as they become part-owners and partners in the business. The goal of a companys capital structure decision is to maximize the gains for the equity shareholders. The optimal capital structure is the one that maximizes the price of the stock and simultaneously minimizes the cost of capital thus striking a balance between risk and return. [2] A firms major decision is its financial decisions which can be analyzed in the theory of Corporate Capital Structure that is based on a model developed by Dodd(1986) and is determined mainly by cost variables- equity, debt and bankruptcy risk and other potential variables such as growth are, profitability and operating leverage. The primary advantage of debt financing is that it allows the founders to retain ownership and control of the company. Equity investors claim does not end until their stock is sold as compared to debt obligations which are limited to the loan repayment period, after which the lender has no further claim on the business. Debt financing tends to be less expensive for small businesses over the long term, though more expensive over the short term, than equity financing. The major disadvantage is that it requires a small business to make regular monthly payments of principal and interest. Due to such regular payments, young companies often experience shortages in cash flow. Debt financings availability is often limited to established businesses which is a disadvantage associated with it. Since lenders primarily seek security for their funds, it can be difficult for unproven businesses to obtain loans. The main advantage of equity financing for small businesses is that there is no obligation to repay the money. The investors in equity financing often prove to be good sources of advice and contacts for small business owners. The main disadvantage of equity financing is that the founders must give up some control of the business. Some sales of equity, such as initial public offerings, can be very complex and expensive to administer. Such equity financing may require complicated legal filings and a great deal of paperwork to comply with various regulations. Features of a Capital Structure Capital structure is that level of debt-equity proportion where the market value per-share is maximum and the cost of capital is minimum. It should have the following features: Profitability/Return: Studies have shown that the relationship between debt-equity ratio and a firms profit margin is such that for a firm which prefers to finance its investments through self-finance are more profitable than firms which finance investment through borrowed capital, firms prefer competing with each other than cooperating and firms use their investment in fixed assets as a strategic variable to affect profitability.[3] Solvency/Risk: Capital Structure of a firm indicates how much the company is leveraged by comparing what it owes to creditors and investors to what it owns. It reveals the degree to which the companys management is willing to fund its operations with debt, rather than equity. Lenders are sensitive about this feature as a high debt-equity ratio will put their loans at risk of being unpaid.[4] Flexibility: Flexibility is the ability to make decisions that the firm thinks are most apt even when others disagree. The level of flexibility the management can have depends on how the firm is financed. Debt offers little flexibility relative to equity. However, the flexibility offered by equity depends on the extent to which shareholders are inclined to agree with managements strategic choices. The flexibility benefit of equity is high only when the share price is high.[5] Conservation/Capacity: If a firm starts with a specific business risk, then the total risk associated with stock and debt is not affected by the capital structure. This is called conservation of risk. Risk is neither created nor destroyed.[6] Debt capacity involves the assessment of the amount of debt that the organization can repay in a timely manner without forfeiting its financial viability.[7] Control: The capital structure of a firm shows when control is allocated to only shareholders and when to others like creditors, or the management team. Generally the shareholders get control when the firms cash flow is sensitive. Also , debt value and firm value are negatively correlated when debtholders have veto power[8]   Determinants of Capital Structure Capital structure of a firm is determined by various internal and external factors. The macro variables of the economy are inflation rate, tax policy of government, capital market condition. The characteristics of an individual firm, termed as micro factors (internal), also affect the capital structure of enterprises. This section presents how the micro-factors affect the capital structure of a firm Size of a Firm: There is a positive relation between the capital structure and size of a firm. The larger the firms the more diversified they are. They have easy access to the capital market, receive higher credit ratings for debt issues, and pay lower interest rate on debt capital. Further, larger firms are less prone to bankruptcy and this implies the less probability of bankruptcy and lower bankruptcy costs. Hence, the lower bankruptcy costs, the higher debt level.[9] Growth Rate: There is a contradictory relation between the growth rate and capital structure. The equity controlled firms tend to invest sub-optimally to get wealth from the enterprises bondholders. They are more flexibility in their choice of future investment. Hence, growth rate is negatively related with long-term debt level.[10] Business Risk: There is a negative relation between the capital structure and business risk. Lesser the stability of the earnings of the enterprises, the greater is the chance of business failure and the greater the weight of bankruptcy costs on enterprise financing decisions. Hence, as business risk increases, the debt level in capital structure of the enterprises should decrease.[11] Dividend Payout: There is an adverse relation between the dividend payout ratio and debt level in capital structure. The low dividend payout ratio means increase in the equity base for debt capital and low probability of going into liquidation. As a result of low probability of bankruptcy, the bankruptcy cost is low. This implies high level of debt in the capital structure.[12] Operating Leverage: The use of fixed cost in production process also affects the capital structure. The high operating leverage-use of higher proportion of fixed cost in the total costs over a period of time-can magnify the variability in future earnings. There is a negative relation between operating leverage and debt level in capital structure. The higher operating leverage, the greater the chance of business failure and the greater will be the weight of bankruptcy costs on enterprise financing decisions. Industry Life Cycle: Firms tend to adopt different financing strategies and a specific hierarchy of decision-making as they progress through the phases of their business life cycle. Debt is fundamental to business activities in the early stages, representing the first choice. However, in the maturity stage, firms re-balance their capital structure, substituting debt for internal capital.[13] Degree of Competition: Debt ratios are reduced as the scope of competition falls. For oligopolies, debt ratios show a significant and positive effect on prices.[14] Company Characteristics: Variables of size and growth opportunity in total assets reveal a positive association with the leverage ratio, however, profitability, growth opportunities in plant, property and equipment, non-debt tax shields and tangibility reveal inverse relation with debt level.[15] Forms of Capital Structure Capital Structure can be of various forms: Horizontal capital Structure: The firm has no component of debt in the financial mix. Expansion of the firm is through equity and retained earnings only. Vertical Capital Structures: The base of the structure is a little amount of equity share capital which serves as the foundation for a super structure of preference share capital and debt. Pyramid Shaped Capital Structure: Large proportion consisting of equity capital and retained earnings. Inverted Pyramid shaped Capital Structure: Small component of equity capital, reasonable retained earnings and increasing component of debt. Replacement Modernization Expansion Diversification Capital Structure Decision Desired Debt-Equity Mix Existing Capital Structure Payout Policy Effect on Return Effect on Risk Effect on Cost of Capital Value of Firm Optimum Capital Structure Capital Budgeting Decision Need for Funds Capital Structure Decision Process Internal Funds Debt External Equity DIFFERENT APPROACHES TO CAPITAL STRUCTURE Weighted Average Cost of Capital It is the expected rate of return on the market value of all the firms securities. Anything that increases the value of the firm also minimizes the WACC if operating income is constant. It is a calculation of a firms cost of capital in which each category of capital is proportionately weighted. All capital sources   common stock, preferred stock, bonds and any other long-term debt   are included in a WACC calculation. The WACC equation  is the cost of each capital component  multiplied by its proportional weight and then summing:   WACC = E/V * Re + D/V * Rd * (1- Tc) Where:   Re = cost of equity   Rd = cost of debt   E = market value of the firms equity   D =  market value of the firms debt   V = E + D   E/V = percentage of financing that is equity   D/V = percentage of financing that is debt   Tc =  corporate tax rate   Assumptions There is no income tax, corporate or personal. The firm believes in paying all of its earnings and dividends. A 100% dividend payout ratio is assumed. Investors have identical probability distributions of operating income for each company. The operating income is not expected to grow or decline over time. A firm can change its capital structure instantaneously without incurring transaction costs. rd represents the cost of debt For 100% dividend payout, re represents cost of equity V = D + E. ra is the overall capitalisation rate of the firm. It can also be expressed as: ra = rd[D/(D+E)] + re[E/(D+E)] NET INCOME APPROACH According to NI approach both the cost of debt and the cost of equity are independent of the capital structure; they remain constant regardless of how much debt the firm uses. This means that, the average cost of capital declines and the firm value increases with debt. This happens because when D/E increases, rd which is lower than re, receives a higher weight in the calculation of ra. This approach has no basis in reality; the optimum capital structure would be 100 per cent debt financing under NI approach. This can be illustrated with the help of a numerical. There are 2 firms A and B similar in all aspects except in the degree of leverage employed. Firm A Firm B Operating income(Rs.) 10,000 10,000 Interest on debt(Rs.) 0 3,000 Equity Earnings(Rs.) 10,000 7,000 Cost of equity capital 10% 10% Cost of debt capital 6% 6% Market Value of equity(Rs.) 1,00,000 70,000 Market value of debt(Rs.) 0 50,000 Total value of the firm(Rs.) 1,00,000 1,20,000 The average cost of capital for firm A is 10%. The average cost of capital for firm B is 8.66% NET OPERATING INCOME It is the opposite of NI Approach. According to NOI approach the value of the firm and the overall capitalization rate are independent of the firms capital structure. That is, ra and rd are constant for all degrees of leverage. Now, re = ra + (ra rd)(D/E) The market capitalizes the firm as a whole at a discount rate which is independent of the firms debt-equity ratio. In the absence of taxes, an individual holding all the debt and equity securities will receive the same cash flows regardless of the capital structure and therefore, value of the company is the same. An increase in the use of debt funds which are cheaper is offset by an increase in the equity capitalization rate. This happens because equity investors seek higher compensation as they are exposed to greater risk from increase in the degree of leverage. They increase the capitalization rate re as the leverage increases. Numerically, this can be explained. Two firms A and B are similar in all aspects except the degree of leverage employed by them. Firm A Firm B Operating income(Rs.) 10,000 10,000 Overall capitalization rate 0.15 0.15 Total market value 66.667 66,667 Interest on debt(Rs.) 1,000 3,000 Debt capitalization rate .10 .10 Market Value of debt(Rs.) 10,000 30,000 Market value of equity(Rs.) 56,667 36,667 Degree of leverage 0.176 0.818 Equity Capitalization for Firm A= (9,000/56,667) = 15.9% Equity Capitalization for Firm B = (7,000/36,667) = 19.1% TRADITIONAL APPROACH The traditional approach argues that moderate degree of debt can lower the firms overall cost of capital and thereby, increase the firm value. The initial increase in the cost of equity is more than offset by the lower cost of debt. But as debt increases, shareholders perceive higher risk and the cost of equity rises until a point is reached at which the advantage of lower cost of debt is more than offset by more expensive equity. The principal implication of the traditional approach is that the cost of capital is dependent on the capital structure and there is an optimal capital structure which minimizes the cost of capital. At this level, the real marginal cost of debt and equity is the same. MODIGLIANI AND MILLER POSITION Similar to NOI Approach Value of the firm is independent to its capital structure i.e. Independence of total valuation and the cost of capital of the firm from its capital structure NOI is purely conceptual, Doesnt provide operational justification Supports NOI and provides behavioral justifications. Assumptions: Capital market is perfect (i)Investors are free to buy and sell (ii) Well informed market (iii) Firm investors can borrow on the same terms (iv) Rational behavior of investors (v) No transaction cost Homogeneous risk class All investors have the same expectations of the firms EBIT No Corporate Tax Preposition I The value of a firm is equal to its expected operating income divided by the discount rate appropriate to its risk class. It is independent of its capital structure.'[16] V= D + E = O/r Where: O is the expected operating income; r is the discount rate applicable to risk class. MM invokes an arbitrage argument to prove the preposition. In equilibrium, identical assets sell for the same price, irrespective of how they are financed. This is also known as the law of conservation of value. Arbitrage Argument Consider two firms U and L, similar in all respects except in their capital structure. Firm U is unlevered, financed by equity alone and firm L is a levered firm. Firm A Firm B Operating income(Rs.) 1,50,000 1,50,000 Interest 0 60,000 Equity Earnings 1,50,000 90,000 Cost of equity 0.15 0.16 Market value of equity 10,00,000 5,62,500 Cost of debt 0.12 Market value of debt 0 5,00,000 Market value of the firm 10,00,000 10,62,500 Average cost of capital 0.15 0.1412 The value of the levered firm is higher than that of the unlevered firm. Such, a situation, argue MM, cannot persist because equity investors would do well to sell their equity in firm L and invest in firm U with personal leverage. For example, if an investor owns 10% equity in firm L, he would: Sell his equity in firm L for Rs. 56,250 Borrow Rs. 50,000, an amount equal to 10% of Ls debt at an interest rate of 12%. Buy 10% of firm Us equity for 1,00,000. His income remains the same. Old income from investment in firm L New income from investment in firm U 10% firms equity income 9,000 15,000 12% interest on loan of Rs. 50,000 (6,000) 9,000 9,000 When investors sell their equity in firm L and buy the equity in firm U, the marker value of firm L tends to decline and the market value of firm U tends to rise. This process continues until the market value of both the firms become equal. As a result, the cost of capital for both the firms becomes the same. Preposition II Firm A 100% equity Firm B 50-50%ratio Expected earnings per share (Rs.) 4 5 Price per share(Rs.) 20 20 Expected return to equity shareholders 20% 25% An increase in financial leverage increases the expected earnings per share but not the share price. This is because the change in the expected earnings is offset by a corresponding change in the return required by shareholders. We know, re = ra + (ra-rd)(D/E) Preposition II states that The expected return on equity is equal to the expected rate of return on assets, plus a premium. The premium is equal to the debt-equity ratio times the difference between the expected return on assets and the expected return on debt. The general implications are that for low levels of debt, the firms debt is considered risk-free. This means that rd is independent of D/E and hence re increases linearly with D/E. As the debt reaches a threshold limit, the risk of default increases and the return on debt rd rises. To compensate this , the rate of increase in re decreases. This happens because, beyond the threshold level, a portion of the firms business risk is borne by the suppliers of the debt capital. WACC Warnings Sometimes the objective in financing is not maximize overall market value but to minimize the WACC. If MMs proposition 1 holds true then they are equivalent objectives. However, if they dont, then the capital structure that maximizes the value of the firm also minimizes its WACC. Warning 1: Shareholders want management to increase the firms value. They are more interested in being than in owning a firm with low WACC. Warning 2: Since shareholders demand higher expected rates of return than bondholders, therefore debt is the cheaper capital source, so WACC can be reduced by borrowing more. However, this extra borrowing leads the stockholders to demand a still higher expected rate of return.[17] Criticisms of MM Theory Firms are liable to pay taxes on their income. Bankruptcy costs are quite high. Agency costs exist because of conflict of interest between managers and shareholders. Managers have a preference for a certain sequence of financing. Personal leverage and corporate are not perfect substitutes. TRADE-OFF THEORY OF CAPITAL STRUCTURE It states that a company chooses how much debt finance and equity finance to use by balancing the costs and benefits. It states that there is an advantage to financing with debt which is the  tax benefits of debt  and there is a cost of financing with debt which is the costs of financial distress including  bankruptcy costs of debt  and non-bankruptcy costs. A firm that is  optimizes its overall value focuses on the trade-off when choosing how much debt and equity to use for financing. COSTS OF FINANCIAL DISTRESS Different firms and different industries will have different magnitudes of costs if they encounter financial distress. With some firms, distress will result in both customers and suppliers fleeing. With other firms, the fact that a firm is close to bankruptcy will not affect customers. When a firm experiences financial distress several things can happen. Arguments between shareholders and creditors delay the liquidation of assets. Bankruptcy cases take years to settle and during this period machineries and equipments rust and become obsolete. Assets sold under distress conditions, fetch a price lesser than their economic value. The legal and administrative costs associated with bankruptcy are quite high. Managers may lower the quality of goods, give unacceptable customer service, ignore welfare in a bid to survive in the short run. BANKRUPTCY COSTS OF DEBT   These the increased costs of financing with  debt  instead of  equity  that result in a higher  probability  of  bankruptcy. The fact that bankruptcy is generally a costly process and not just a transfer of  ownership  implies that these costs negatively affect the total  value  of the firm. These costs can be thought of as a financial cost, because as the probability of bankruptcy increases the financial costs increases. PECKING ORDER THEORY  OR  PECKING ORDER MODEL It  states that companies  prioritize  their sources of financing according to the law of least effort, or of least resistance, preferring to raise equity as a financing means of last resort. Hence, internal funds are used first, and when that is depleted,  debt  is issued, and when it is not sensible to issue any more debt, equity is issued. This theory prefers internal financing when available and maintains that businesses adhere to a  hierarchy  of financing sources and, and debt is preferred over equity if external financing is required. AGENCY COST   It is an  economic  concept that relates to the cost incurred by an organizations associated with problems such as divergent  management-shareholder objectives and  information asymmetry.   The information asymmetry causes the agency problems of  moral hazard and  adverse selection. Agency costs mainly arise due to divergence of control, separation of ownership and control and the different objectives the managers consider. KINDS OF ANALYSIS FOR CHOOSING THE CAPITAL STRUCTURE Leverage Analysis EBIT EPS Analysis ROI ROE Analysis Ratio Analysis Cash Flow Analysis Comparative Analysis Capital Structure Policies in Practice We will see a few in detail. LEVERAGE ANALYSIS : Leverage arises from the existence of Fixed Costs. There are two kinds of Leverage: Operating Leverage: arises from the firms Fixed Operating costs such as salaries, depreciation, insurance, property taxes, and advertising outlays. Financial Leverage: arises from the firms Fixed Financing Costs such as Interest on Debt. Sales Sales 500 units 600 units Revenues 500,000 600,000 Variable operating costs 250,000 300,000 Fixed operating costs 200,000 200,000 Earnings before interest and taxes 50,000 100,000 Operating leverage arises from the existence of fixed operating expenses. When a firm has fixed operating expenses, 1 percent change in unit sales leads to more than 1 percent change in EBIT. Consider the case of a firm, XYZ Limited which is currently selling a product at Rs 1000 per unit. Its variable costs are Rs 500 per unit and its fixed operating costs are Rs 200,000. The earnings before interest and taxes at two levels of sales, viz., 500 units and 600 units, is shown below: In the above example, a 20 percent increase in unit sales leads to a 100 percent increase in profit before interest and taxes, thanks to the existence of fixed operating costs. Hence, fixed operating costs magnify the impact of changes in revenues. This the magnification works in the reverse direction as well. Degree of Operating Leverage It refers to the sensitivity of PBIT (or EBIT) to changes in unit sales or Sales. Picture1.png It measures the effect of change in sales revenue on the level of PBIT. Financial leverage emanates from the existence of fixed interest expenses. The use of fixed-charges sources of funds, such as debt and preference capital, along with owners equity in the capital structure is known as financial leverage (or gearing or trading on equity). When a firm has fixed interest expenses, 1 percent change in profit before interest in taxes (PBIT) leads to more than 1 percent change in profit before tax (or profit after tax or earnings per share). Consider the case of XYZ Limited, which currently has an PBIT of Rs 50,000. Its fixed interest expenses are Rs 30,000 and its tax rate is 50 percent. It has 10,000 shares outstanding. The profit before tax, profit after tax, and earnings per share for XYZ Limited at two levels of PBIT, viz., Rs 50,000 and Rs 60,000 are shown below: Case A Case B Profit before interest and taxes 50,000 60,000 Interest expense 30,000 30,000 Profit before tax 20,000 30,000 Tax 10,000 15,000 Profit after tax 10,000 15,000 Earnings per share 1 1.50 In the above example a 20 percent increase in PBIT leads to a 50 percent increase in profit before taxes (or PAT or EPS), thanks to the existence of fixed interest expenses. Hence, fixed interest expense magnifies the impact of changes in PBIT. The magnification works in the reverse direction as well. Degree of Financial Leverage It refers to the sensitivity of PBT (or PAT or EPS) to changes in PBIT. The financial leverage employed by a company is intended to earn more return on the fixed-charge funds than their costs. The surplus (or deficit) will increase (or decrease) the return on the owners equity. Combined leverage, or total leverage, arises from the existence of fixed operating costs and interest expenses. Due to the existence of these fixed costs, 1 percent change in unit sales, leads to more than 1 percent change in PBT (or PAT or EPS). Consider the case of XYZ Limited, which currently has revenues of Rs 500,000. (Rs 500 units are sold at Rs 1,000 per unit). Its variable costs are Rs 500 per unit and its fixed operating costs are Rs 200,000. Its fixed interest expenses are Rs 30,000 and its tax rate is 50 percent. It has 10,000 shares outstanding. The financial profile of the company at two levels of sales viz. 500 units (the current level) and 600 units (a level 20 percent higher than the current level) is shown below. Sales Sales 600 units 500 units Revenues 500,000 600,000 Variable operating costs 250,000 300,000 Fixed operating costs 200,000 200,000 PBIT 50,000 100,000 Interest 30,000 30,000 Profit before tax 20,000 70,000 Tax 10,000 35,000 Profit after tax 10,000 35,000 Earnings per share 1 3.5 In the above example, a 20 percent increase in unit sales leads to a 250 percent increase in earnings per share, due to the existence of fixed operating costs and interest expenses. Also, fixed costs magnify the impact of changes in unit sales. Degree of Combined Leverage It refers to the sensitivity of PBT (or PAT or EPS) to changes in unit sales or sales. PBIT-EPS Analysis EPS is sensitive to changes in PBIT under different financing alternatives. where EPS = earnings per share, EBIT = earnings before interest and taxes, I = the interest burden, t = the tax rate, and n= the number of equity shares. Break-Even PBIT Level Consider the following data for ABC Limited. Existing Capital Structure: 1 million equity shares of Rs. 10 each Tax Rate : 50 percent ABC Limited plans to raise additional capital of Rs. 10 million for financing an expansion project. In this context, it is evaluating two alternative fina

The Hours :: Cunningham Hours Essays

The Hours The Hours is a novel that deals with the various cultural aspects of life. Michael Cunningham's writing reflects the various nuclear families, the different economic conditions, and the social issues involving the three women in the novel. The Hours begins with Virginia Woolf who is married to Leonard. They do not have any children of their own. Woolf lives in London in 1923 battling mental illness and struggling to write a book, Mrs. Dalloway. She struggled and finished the book according to Tony Peregrin "at the age of 43". Woolf is financially stable due to her husband was a publisher. She had a cook, Nelly, and a housekeeper Lottie. By 1941, The Second World War was going on and Virginia Woolf had committed suicide. The second protagonist in the novel is Laura Brown, a housewife who is living in Los Angeles in 1949. Her traditional family consists of her husband Dan who is a war hero of sorts, works in an office, provides for the family while Laura statys at home and cares for the family. She has one child, Richie, and is expecting another child. The Browns live in a nice home with manicured lawns, nice Cheveorlet in the driveway, in Los Angeles. Laura smokes, reads Mrs. Dalloway, and is infaturated with Virginia Woolf and her suicide. She desires to commit suicide but opts out to leave her family and move to Canada instead. Life and death will bring the mother and son together. Laura may not have the nerve to kill herself, but her son Richard, fell to his death from a fall from the window while suffereing from AIDS. The third protagonist, Clarissa Vaughan, who was given the name Mrs. Dalloway by Richard. He was a one time lover of hers. The period is 2001. Clarissa is financially stable and independent while living in the upscale Greenwich Village area with her live in lover, Sally of 10 years. Clarissa has a daughter, Julia who was conceived by artificial insemination by an unknown donor. Julia has a gay friend, Mary who Clarissa is not very fond of. Although Woolf, Brown, Vaughan are women that are struggling with their own internal issues of restlessness in the place of where she lives, contemplating suicide, unhappiness in a marriage, living with mental illnes, and feelings of failure. Yet, each of these women had secret sexual feelings for other women.( Woolf for sister Vanessa, Brown for neighbor Kitty, and Vaughan for Sally).

Glamorization of War in Cranes Do not weep, maiden, for war is kind, Le Guins The Ones Who Wal :: Comparison Compare Contrast Essays

Glamorization of War in Crane's Do not weep, maiden, for war is kind, Le Guin's The Ones Who Walk Away from Omelas, Lovelace's To Lucasta, Going to the Wars and Owen's Dulce Et Decorum Est I dream sometimes about war. And the fear that follows the war drums. I dreamt once of my junior high teacher, a stocky woman with a passion for the middle ages, whipping me and my friends into an army with swords and shields, and then screaming that if we retreat even one step, we'll lose. If we lose, we die. So I took the burning line of the sword and stood in the mud waiting for war. I feared death, though not so much the end of life as the violence that would precede it. I feared whatever was waiting in the darkness beyond me. And then my dream shifted and my friends and I were swinging broomsticks in our upstairs study, facing nothing more threatening than one another. I don't understand my dreams. And I don't understand war. My only link to the repeated blood-baths of the early twentieth century are books and dreams. I wish I could say they ended neatly; that the characters, when the books closed, folded up their lives and went away and that the phantoms dispersed when I woke up. They don't. War doesn't end neatly either. The Imperial War Museum in London stands as an enormous monument to wars the British people can't forget. War has fed into what Jung would call their collective unconscious until it's as much apart of them as the lungs they draw breath with. I walked down a wide passageway in the basement of the Museum, a dim red light illuminating my way. Huge slabs of tan mat hung on the staggered walls. The spread of mat was broken only by the deafening silence of words: "Only the dead find an end to war." "War demands violence. Anything mediocre is foolhardy." The violence caught me off-guard, bringing a surge of rage-filled bile to my mouth. War demands violence. Demands. Violence. A young man from my quiet neighborhood was killed in a New York subway station trying to protect his mother.

The Role of the Prosecutor Essays -- Law Legal

The Role of the Prosecutor All serious criminal cases require the participation of three individuals: the judge, counsel for the prosecution, and counsel for the accused. If any one of these are absent from the procedure, "the criminal justice system is incomplete" (Congress). The prosecutor stands at a critical stage in the criminal justice system as well as playing a critical role before, during and after the trial. They serve many functions throughout the criminal process. Some of which are investigating, plead bargains, questioning both jurors and witnesses, and being involved through the sentencing as well. The first thing that must be understood is that the duty of the prosecutor is to seek justice, not merely to convict. It is crucial that his obligation is to protect the innocent as well as to convict the guilty, to guard the rights of the accused as well as to enforce the rights of the public. The prosecutor should have the most knowledge of the work of the police in the investigation of crimes and in the enforcement of law. The prosecutor has tremendous amount of desecration as to what charges will be brought against an accused person or whether to even dismiss charges based on lack of evidence. Since his decisions account for a large share of cases that are taken into the courts, "the character, quality and efficiency of the whole system is shaped in great measure by the manner in which he exercises his broad discretionary powers" (Britani...

Entertainment as Politics Essay

As time goes by, many changes have been observable in the world. The various events that are happening show the development of different aspects in the society. One of the most observable modifications is the development of the perspective or frame of mind of people with regard to their opinion about the issues that affect them. Political concerns are still among the primary subject matter that people usually engaged themselves in. This interest is mostly evident in the older generation because the young members of the population tend to show little interest up to the point of apathy with regard to such matter. Most of the youth of today are more concerned with the latest video games, fashion style, and different trends rather than politics. However, the improvement in technology especially in the field of communication has made it possible to reach out to this younger generation in order to encourage them to actively participate in political matters that greatly affect their lives. However, the technological advances in communication are not the only factor that contributes to encouraging the young adults to engage themselves in political matters because creativity and innovativeness also play an important role. The different programs in television especially talk shows and comedy shows are the outcome of the utilization of communication technology and creativity as well as innovativeness. The people behind these programs are responsible for conceptualizing a medium that would attract the attention of the masses. They create programs that would aid their viewers to have fun and at the same time be enlightened about the current events that are taking place with their respective countries, especially in the field of politics. These commendable talents are supported by the power of modernity that enables them to broadcast this kind of programs and reach the TV sets in the living room of every household. The use of entertainment in relation to political engagement is considered as a non-traditional form of political communication with the people. The uniqueness of this kind of medium actually adds up to its appeal. Before, there is a distinction between news and entertainment. News programs are the ones which handle serious matters and reports the recent events in society. This kind of programs usually focuses on topics that concern the economy, status of the society, and the field of politics. On the other hand, entertainment usually involves programs that provide people a break from the hassles of everyday life. Entertainment programs are usually hosted by stand-up comediennes who tend to crack jokes or impersonate other personalities. There also entertainment programs that involve singing and dancing. Nevertheless, even the field of media is also evolving because the distinction between news and entertainment has already been transcended. At present, there are existing shows that provide entertainment by using political issues. There are programs that tackle political concerns by means of impersonating the officials in the government. In this kind of programs, the hosts of the show could make commentaries or criticisms towards politicians in a fun and light-hearted manner. This new type of entertainment program is greatly exemplified by Saturday Night Live. Saturday Night Live, or known simply as SNL, is a late-night comedy show. It is an American sketch comedy and variety show that runs for 90 minutes on a weekly basis. The program started on October 11, 1975 at New York City. There is a regular set of hosts who are usually the rising actors in the field of comedy. They are joined by a guest host as well as a featured musical act. The show is broadcasted live at the Studio 8H in the GE Building at New York’s Rockefeller Center (NBC Universal, n. d. ). Saturday Night Live made a huge impact in the last election in the United States. The program usually featured different politicians that were running for a position in office. These include presidential and vice presidential candidates such as Barack Obama and John McCain, among others. The impersonation of the hosts of the show with these various political figures not only provided entertainment to the general public but more importantly, it was able to enlighten the people about the personalities, platforms, and the respective stand of these candidates regarding numerous political issues. Creation of Politics Using Humor The Saturday Night Live comedy show was able to spoof numerous political candidates for the last election. However, the most noticeable and controversial among all of them was when they imitated the Governor of Alaska, Sarah Palin. The program was able to apply the humorous nature of the show in order to focus on the political skills of Sarah Palin. In doing so, one of their hosts, Tina Fey, who has this unusual resemblance with Governor Palin, imitated her every move from the way she dresses, her manner of speaking, and mannerisms. Aside from the physical features, Tina Fey also used the famous quotes that Palin made in her interviews as well as the debate that she participated in. Being the comedian that she is, Tina Fey was able to make her imitation of Palin very hilarious. In this situation, Saturday Night Live was able to exemplify how the show could actually mix entertainment with politics. Gender, Power, Class In relation to this, the skit about Sarah Palin also focused on other important issues like gender, power, and class. This is most observable in the episode wherein Tina Fey acted as Sarah Palin together with another one of her co-hosts that imitated Hillary Clinton. In this scene, even though they were making funny remarks, the commentaries that they give actually pertain to the real issues that are taking place in the country. Both the actresses were able to point out the topic of gender wherein they said that it was time that women take key roles in the White House. They also stated that politicians should not be discriminated based upon gender, and that sexist remarks should be prevented. In terms of the idea of power, the two actresses stated that it was timely that women should actively participate in shaping the future of the United States by giving them the opportunity to be elected. The concept of intellectual class difference was also explored when they made it very obvious that Hillary Clinton knows more about politics than Sarah Palin. This is proven when the one who was imitating Clinton commented that â€Å"I do not agree with the Bush Doctrine† and Tina Fey replied in a very Palin kind of fashion that â€Å"I do not know anything about it. † Thus, through this comedy act, it is very evident that there is an intellectual disparity between these two individuals. Comedy as a Space for Critical Engagement Saturday Night Live was able to use comedy in order to criticize the weaknesses of Sarah Palin as a candidate for the vice-presidency. Pointing out the flaws of an individual is not an easy thing to do especially if it is done under the watchful eye of numerous people. Certain factors have to be taken into consideration especially the sensitivity of the person that is being scrutinized. However, by means of humor, one can easily make commentaries that would not be seen in a bad light if it is done seriously. Humorous comments allow other people to notice the criticisms made in a good natured manner. Laughter has its way of making people take things lightly regardless of whether the remark is positive or negative. This is proven in the skit involving the imitation of Palin and Clinton. The impersonator of Hillary Clinton stated that she believe that diplomacy should play an important role in U. S. policy. On the other hand, Tina Fey who portrayed the role of Sarah Palin said, â€Å"I can see Russia in my front porch. † This only shows the criticisms that people have with Palin’s lack of knowledge with foreign policy and diplomatic affairs. Saturday Night Live has the capability to attack sensitive issues and scrutinize famous and powerful individuals unlike ordinary news programs. Humor plays an important part in the ability of shows like Saturday Night Live to tackle important subject matters like the lack of capability and competency of a particular candidate to hold a seat in the White House. They could explicitly show that Sarah Palin proved that this notion is true when she participated in the Saturday Night Live. She even joined in the hilarious jokes and some of the skits, even if it involves the mockery of her own personality and capacity. The program successful achieved the objective of making its viewers take notice of the weaknesses of Sarah Palin as vice-presidential candidate by playing with her personality. The skits, jokes, and impersonation of her were essential in order for the hosts to make the public aware of the flaws of this particular candidate. Using humor was very effective in capturing the attention of the audience and making them aware of sensitive issues that cannot be easily discussed in a regular program. The people behind this entertainment show were able to incorporate the idea of having fun together with political criticisms. The efficiency of Saturday Night Live and other similar programs, as compared to the usual traditional program, is its employment of humor in their commentaries and criticisms. In relation to this, the important technique that was used by the program is the employment of satire, a literary tone that is implemented in order to make fun or ridicule a person with the intention of correcting him or her (Mali, n. d. ). As such, it could tackle important and sensitive issues especially in the political realm without being too serious about it. This genre of entertainment is an effective setting for critical engagement because it allows people to openly express how they think and feel with regard to a particular person or concern. They do not have to be too formal or to lay things nicely as they can easily say what is on their minds. Moreover, a study conducted by Nojin Kwak (2004), an assistant professor from the Department of Communication Studies in the University of Michigan, and his associates shows that entertainment programs greatly influence the political engagement of young adults. The â€Å"use of television entertainment shows, particularly late-night talk show programs,† was found to reinforce political efficacy, political trust, and political understanding among the public especially among young adults (Kwak, Wang, & Guggenheirn, 2004, p. ii). This only proves that entertainment talk shows with the same format as Saturday Night Live are an effective avenue for political engagement. Political Economic Structure of Saturday Night Live The nature of the program of Saturday Night Live that uses satire in relation to important social concerns enables it to acquire numerous viewers for the show. Television companies, like any other business organization, is also after the accumulation of profit. NBC is the television network that handles Saturday Night Live. This network aims to increase the profit of its company through the programs that they have. Television shows normally gain profit through the various commercials and advertisements of different companies that avail of the network services. These services get even more expensive when the company wants to show their ads during the primetime shows especially the high-rating ones. In this process, televisions companies gain profit from these television shows. Nevertheless, like in any other industry, NBC also has its competitors. There are quite a number of other television companies that also air similar programs like those that NBC has, but Saturday Night Live has a different approach in comedy that makes it one of the most high-rating shows in America. Entertainment Programs as a Space for Social Change Primetime programs also have a strategic advantage as compared to other shows that are aired at a different time. This is due to the fact that most people, especially the American public, are already at home during that time. After a busy day at work or in school, this is the specific part of their day wherein they could relax and do whatever they want, and this usually includes watching television. Being the case, this is the most appropriate time for them to take notice of other things aside from their everyday responsibilities. Saturday Night Live is taking advantage of the free time of these people in order to entertain them and at the same time inform them of the present situation of the country and the people that are directly involved in it. They give their viewers relaxation through laughing and making fun of other people in a good-natured manner. At the same time, they do not simply make satire comments about anything under the sun; rather, they focus on important ones that actually affect the lives of the viewers who patronize their programs. This late-night comedy show enlightens the people with regard to different issues like political matters, whether they are consciously or unconsciously aware of it. It epitomizes the very idea of learning while having fun. The new genre of entertainment programs such as Saturday Night Live is responsible for creating an innovative space for social change. This kind of shows gives one of the most important factors in social engagement, and that is the concept of awareness. It informs the general public of the pressing issues that will eventually affect their way of life. Saturday Night Live’s imitation of Governor Sarah Palin clearly proves how this program can discuss political concerns as well as the flaws of influential personalities. Thus, having this necessary knowledge can eventually aid the citizens of the country to take action. It is observable that the people indeed seriously consider the lack of political capacity that Sarah Palin has, which the show highlighted because she did not win in the election. The popularity of the Saturday Night Live increased due to the recent campaign period and election that took place. The show was able to focus on the current situation of America. Due to this, the interest of the people to get involved in political issues and participate in the exchange of thoughts as well as debates regarding this issue was heightened. Entertainment programs are a good avenue for social change because people could easily express their opinions, thoughts, feelings, and even their sentiments in this kind of setting without being afraid that they might offend other people. The freedom that they have in this kind of medium entails greater participation from the people especially for young adults, particularly during this time when communication technology is very influential. The discussions above clearly prove that entertainment is indeed an effective avenue for critical thinking, empowerment, and social change. Entertainment talk shows and comedy programs like Saturday Night Live is capable of enhancing the critical thinking of the public through the skits, jokes, and hilarious commentaries that they make. Whenever an individual watches the show, he or she becomes aware of a particular flaw of a personality, including political figures like Governor Sarah Palin. Hence, through such programs, the public is encouraged to analyze rationally why such criticism and mockery are taking place. This allows them to think beyond what these personalities are projecting and carefully study what their real intentions are, as well as their capacity in the position that they are running for. In this manner, critical engagement is already taking place because the people are exerting the effort to give attention to the particular concern the show is featuring. People are also empowered by entertainment shows because this gives them the freedom to express what they want. The hosts of the program represent the common people and their opinions and stand regarding a certain issue or a particular personality. They stand as the voice of the masses because they can explicitly express the public’s perspective on various matters. Moreover, people can always send an e-mail to these television networks in order to give their opinion and suggestions about their shows. In doing so, they are already taking part in the whole process of media awareness. Lastly, this genre of entertainment program is an effective avenue for social change. It influences people, especially young adult, to get involved with important issues like political concerns. This is due to the fact that entertainment programs enable political understanding, political efficacy, and political trust among those people who watch them. Moreover, programs under this genre provide a setting conducive for social modifications because they use the value of humor and laughing about problems that would normally drag people down. Thus, their new approach in dealing with issues makes entertainment programs an effective way to effect changes in the society. References Kwak, N. , Wang, X. , & Guggenheirn, L. (n. d. ). Laughing All The Way: The Relationship Between Television Entertainment Talk Show Viewing and Political Engagement among Young Adults. Retrieved November 25, 2008, from http://www. umich. edu/news/Releases/2004/Aug04/Kwak. pdf. Mali, T. (n. d. ). Satire. Retrieved November 25, 2008, from http://www. tnellen. com/cybereng/lit_terms/satire. html. NBC Universal. (n. d. ). Saturday Night Live. Retrieved November 25, 2008, from http://www. nbc. com/Saturday_Night_Live/about/.