The Oort Cloud

The Oort Cloud The Oort cloud is a vast swarm of some 2 trillion comets orbiting our star in the most distant reaches of our solar system, extending from beyond the orbits of Neptune and Pluto out to 100,000 times the Earth-Sun distance. Almost one-third the distance to the nearest star. While the planets are confined to a flattened disk in the solar system, the Oort cloud forms a spherical shell centered on the Sun, which gradually flattens down to an extended disk in the inner region, called the Kuiper belt.Bright comets observed through telescopes or with the naked eye get thrown out of the Oort cloud or Kuiper belt, and become visible when they get close to enough so that the Sun's energy can transform the surface ices into gases. These gases drag off the embedded dust, and we see the light reflected from the dust as a tail. Comets are the leftover icy building blocks from the time of planet formation, which formed in the region of the outer planets. Essentially thesecomets are d irty snowballs, composed primarily of water ice, with some carbon monoxide and other ices, in addition to interstellar dust.When their orbits passed close enough to the giant planets to be affected, some were thrown toward the Sun and some were tossed outward toward the distant reaches of the solar system, the spherical swarm we now call the Oort cloud. Some of the comets sent inward hit the inner rocky planets, and probably contributed a significant amount of ocean water and organic material, the building blocks of life, to Earth. Comets that live in the Oort cloud are especially important scientifically because they have been kept in a perpetual deep freeze since the formation of our solar system 4. 6 billion years ago.This means that they preserve, nearly intact, a record of the chemical conditions during the first few million years of the solar system's history, and can be used to unravel our solar system's origins much like an archaeologist uses artifacts to decipher an ancient civilization. The Oort cloud is thought to occupy a vast space from somewhere between 2,000 and 5,000 AU (0. 03 and 0. 08 ly)[12] to as far as 50,000Â  AU (0. 79Â  ly)[3] from the Sun. Some estimates place the outer edge at between 100,000 and 200,000 AU (1. 58 and 3. 16 ly). [12] The region can be subdivided into a spherical outer Oort cloud of 20,000–50,000 AU (0. 2–0. 79 ly), and a doughnut-shaped inner Oort cloud of 2,000–20,000 AU (0. 03–0. 32 ly). The outer cloud is only weakly bound to the Sun and supplies the long-period (and possibly Halley-type) comets to inside the orbit of Neptune. [3] The inner Oort cloud is also known as the Hills cloud, named after J. G. Hills, who proposed its existence in 1981. [13] Models predict that the inner cloud should have tens or hundreds of times as many cometary nuclei as the outer halo;[13][14][15] it is seen as a possible source of new comets to resupply the relatively tenuous outer cloud as the latter's nu mbers are gradually depleted.The Hills cloud explains the continued existence of the Oort cloud after billions of year The outer Oort cloud is believed to contain several trillion individual objects larger than approximately 1Â  km (0. 62Â  mi)[3] (with many billions with absolute magnitudes brighter than 11—corresponding to approximately 20Â  km (12Â  mi) diameter), with neighboring objects typically tens of millions of kilometres apart. Its total mass is not known with certainty, but, assuming that Halley's comet is a suitable prototype for all comets within the outer Oort cloud, the estimated combined mass is 3? 025Â  kg (7? 1025Â  lb or roughly five times the mass of the Earth). Earlier it was thought to be more massive (up to 380 Earth masses), but improved knowledge of the size distribution of long-period comets has led to much lower estimates. The mass of the inner Oort Cloud is not currently known. If analyses of comets are representative of the whole, the vast majority of Oort-cloud objects consist of various ices such as water, methane, ethane, carbon monoxide and hydrogen cyanide.However, the discovery of the object 1996Â  PW, an asteroid in an orbit more typical of a long-period comet, suggests that the cloud may also contain rocky objects. Analysis of the carbon and nitrogen isotope ratios in both the Oort cloud and Jupiter-family comets shows little difference between the two, despite their vastly separate regions of origin. This suggests that both originated from the original protosolar cloud,a conclusion also supported by studies of granular size in Oort-cloud comets by the recent impact study of Jupiter-family comet.

Directory Viruses

There are many ways to sabotage a computer. Some malicious programs create software that automatically replicates itself and spreads throughout a computer's file system to destroy it later. One of these virus types is called the Directory Virus. From its name itself, one can know that it attacks the directory and file system of a computer. The computer uses a large file that contains information about its subdirectories and files. It includes information such as the starting cluster, the name, the time and date it was created or modified, attributes such as being read-only, and other information.Every time a file needs to be accessed, it searches for the directory entry and the starting cluster, an index to the File Allocation Table or FAT. All the other cluster addresses are in the FAT. So a Directory Virus infects clusters and allocates it in the FAT. It then targets other clusters and infects other files. The destructive code is usually with executable files such as the ones endin g with . EXE or . COM. The location or paths to the computer's files will then be changed by the Directory Virus so that it can infect other files.This will be done transparently, without the user's knowledge, until the original files will be impossible to find. Eventually, the user's files become useless (Spam Laws, 2009). In May 1991, the DIR II virus was discovered first in Bulgaria. It is also known as Creeping Death and was written by the same programmers who coded the DIR, MG and Shake viruses. At that time, it was considered to be unique since directory viruses were still unknown. It changed directory entries only and did not change the files (Hypponen, 2010).It was eventually followed by variants such as the DIR III and DIR BYWAY viruses. The BYWAY virus appeared first in mid 1995 in Venezuala, but was possibly authored by a Chinese programmer named Wai Chan since the code is signed â€Å"By Wai Chan† (PR Newswire, 1995). It is similar to the DIR II family of viruses but alters the technique slightly by modifying directories and cross linking executable files to point to a file named CHKLISTx. MSx, containing the viral code (Paris, 2010).The BYWAY virus has an interesting story since it reveals that people from different countries often disguise themselves using other countries. The Chinese search engine, Baidu, for example was attacked by malware that showed an Iranian flag, but Baidu doubts that it was Iranian. They believe that it was American hackers who did it. In the same way, the BYWAY virus claims that it was authored by Wai Chan on August 1994. And then when the virus is triggered, it pops out a message saying, â€Å"Trabajemos Todos Por Venezuela† which means, â€Å"We are all working for Venezuela.†It also plays music simultaneously, mimicking the Venezuelan national anthem. But it is likely that the real author is neither Venezuelan nor Chinese since crooks are not likely to leave their calling cards at the scene of the crime. It is also possible to remove the virus without using disinfecting software. Simply rename all . COM and . EXE files with non-executable extensions. The virus will automatically correct the FAT. Then reboot using a clean boot disk to remove the virus in memory, and rename everything back to its executable extensions.Do this for all hard disk partitions and the virus will be removed. Unfortunately, because viruses are popularly known to wreak havoc on computers, there is an urban myth propagating in the world that every time a PC doesn't work properly, it is always caused by a virus (Rutter, 1999). However, the fact is that not all PC problems are caused by viruses. There may be manufacturer bugs in the software or incompatibility issues with the hardware or software. Or the computer may simply be malfunctioning like any other electronic device that eventually fails.

Mandatory Questions and Answers Essay

Outline the guidelines, procedures and codes of practice relevant to personal work? (1.1.1) Follow a set routine so you don’t make any mistakes. Confidentiality. Explain the purpose of planning work, and being accountable to others for own work? (1.1.2) Throughout the day I will always find out what job is the most important for me to do first and do my other work afterwards. Any delay in the important jobs could impact on someone else’s work e.g. (Every hour we have to go online and collect VBS’s for the drivers otherwise they cannot get on the docks to empty or load their container which delays them from their next job meaning it impacts on their work.) Explain the purpose and benefits of agreeing realistic targets for work? (1.1.3, 1.1.4) It gives a good working practice and gives you something to aim for. Describe types of problems that may occur during work and how would you seek assistance in resolving problem? (1.1.8, 1.1.9) Part of my job is dealing with POD’s and it is important that I chase for outstanding ones otherwise we cannot prove the delivery of container was made which could delay payment or some other issues like insurance claims. Explain the purpose and benefits of recognising and learning from mistakes? (1.1.10) One of the mistakes I have done could have lost the company money but luckily it didn’t. The way I have learnt from this is because I wasn’t very careful but now I take more precautions e.g. checking twice when sending out invoices so I don’t send it to the wrong person. Explain the purpose and benefits of agreeing and setting high standards for own work? (1.2.1, 2.1.1) The benefits for setting high standards for your own work means that it is always done to the best of your ability. Describe ways of setting high standards for work? (1.2.2) * Making goals and sticking to them. * Writing a list of what needs to be done. * Aiming to do certain things by a certain time/day. Explain the purpose and benefits of taking on new challenges if they arise? (1.2.3) It means I get to learn more about the company and interact with everyday tasks; I will be more involved and have a lot more options. Accounts, POD’s and traffic sheets are some examples of what I would do which also gives me more option in the future. Explain the purpose and benefits of adapting to change? (1.2.4) Sometimes change can make things more efficient and easier to complete tasks. Explain the purpose and benefits of treating others with honesty, respect and consideration and what types of behaviour show this and what ones don’t? (1.2.5, 1.2.7) Good behaviour * Friendly * Considerate * Confident Bad behaviour * Being unmotivated * Refusing to do work * Being cold towards other employees Explain why behaviour in the workplace is important? (1.2.6) Being friendly to others makes it a comfortable and relaxing atmosphere to work in meaning there are no uncomfortable and awkward moments so you can enjoy being at work. Explain the purpose and benefits of encouraging and accepting feedback from others? (2.1.2) Shows you where your good and bad flaws are and what you can improve on. Explain how learning and development can improve own work, benefit organisations and identify career options? (2.1.3) It can improve your own knowledge and make you understand your job role better. Describe possible career progression routes and development opportunities? (2.1.4, 2.1.5) I could possibly work in a bank or something with accounting as an option which would be a potentially good career or I could stay in this area of work. Describe what is meant by diversity and why it should be valued? (3.1.1) Diversity refers to the fact that we are all different. Diversity should be appreciated and valued because nobody is the same as anyone else. Describe how to treat other people in a way that is sensitive to their needs? (3.1.2) You should be kind and be caring towards people. Look out for their needs as you would like them to look out for yours. Treat others how you would like to be treated. Describe how to treat people in a way that respects their abilities, background, values, customs and beliefs? (3.1.3) Don’t judge anyone by their race, religion systems, mental capabilities, physical appearance. Get to know them before you take judgement on them. Describe ways in which it’s possible to learn from others at work? (3.1.4) You can watch how they act with certain people e.g. you learn different mannerisms and personalities. Describe the purpose and benefits of maintaining security and confidentiality at work, what are the company and legal requirements and how do you deal with any concerns? (3.2.1, 3.2.2, 3.2.3, 3.2.4) Confidential information is only allowed to be looked at by your employer and other staff but not to be discussed outside of work as this could breach your contract. Explain the purpose of keeping waste to a minimum? (3.3.1, 3.5.2) It is better for the environment. Describe the main causes of waste that may occur in a business environment? (3.3.2) I would say paper is the most common cause of waste the business as there is so much information to take down, re-write and make notes. It is all recycled though. Describe ways to keep waste to a minimum? (3.3.3, 3.5.1, 3.5.2) Recycle and reuse. Identify ways of using technology to reduce waste? (3.3.4) * Shredder * Moving paper files on to the computer * Using a compost pot for wasted food Outline the purpose and benefits of recycling and what are your organisational procedures? (3.3.5, 3.3.6) Reduces carbon footprint and pollution Describe the benefits and procedures and organisational procedures for the recycling and disposal of hazardous materials? (3.4.1, 3.4.2) The benefits of recycling can be extremely beneficial to all different things. The only hazardous object we have that we recycle is the toner from our printer and it goes when a man picks it up to recycle and give to a charity. Explain reasons for knowing the purpose of communication? (4.1.1) The purpose of communication is to understand each other and connect. Communication is the means in which information is circulated. Explain the reasons for knowing the audience to whom the communication is being presented? (4.1.2) You modify your presentation style to suit the audience so you get optimum results. Describe the best methods of communication and when to use them? (4.1.3, 4.1.4) 1. In person – for an immediate response to your question/query 2. Telephone – when you are not near the person you wish to receive information but would like a quick response. 3. Email – when you are replying to a request and need to send them something or when you need something sent to you. Identify different sources of information that may be used when preparing written communication? (4.2.1) Websites on the internet, a dictionary and previous correspondents could be used to prepare written communication. Describe the communication principles for using electronic forms of written communication in a business environment? (4.2.2) It is environmentally friendly and easier to use. Describe the reasons for using language that suits the purpose of written communication? (4.2.3) You use different languages to address the matter in the right context for example; informal or formal letters/emails. Describe ways of organising, structuring and presenting written information so it meets the needs of the audience? (4.2.4) PowerPoint presentations can be very good for presenting and gives you a lot of room for information. You can use a wide range of different effects that make the information look more interesting. Describe ways of checking for the accuracy of written information and the purpose of accurate use of grammar, punctuation and spelling? (4.2.5, 4.2.6) If you are using the computer you can use spell check on almost any document to make your grammar correct. Explain what is meant by plain English, and why it is used? (4.2.7) Plain English is a general term for communication styles that emphasise clarity, brevity and the avoidance of technical language. The intention is to write in a manner that is easily understood by its target audience: appropriate to their reading skills and knowledge, clear and direct, free of clichà © and unnecessary jargon. Explain the need to proofread and check written work? (4.2.8) In case you have made any mistakes or your work doesn’t make sense. Explain how to identify work that is important and work that is urgent? (4.2.9) Urgent means as soon as possible and important means take a little more time and care over it but do it quickly. Describe organisational procedures for saving and filing written communications? (4.2.10) We scan all the documents so there is always a back up file on the computer and then we file the paperwork into a folder and archive. Describe ways to verbally present information and ideas clearly? (4.3.1) Use number points, examples and be clear when presenting information. Explain ways of making contributions to discussions that help move them forward? (4.3.2) Always ask questions, recap information and listen carefully.

CURRENT ISSUES IN FINANCIAL REPORTINGED IFRS7 Essay

CURRENT ISSUES IN FINANCIAL REPORTINGED IFRS7 - Essay Example (IFRS News 2006). In addition, the IFRS also deals will amending the existing risk disclosure requirements for other insurance contracts of the IFRS 4. Recently, most companies and huge industries in the United States and Europe has come to comply and revised their system in order to adapt their system into the new field of financial strategy. This means that these financial instruments are also applicable to financial and non-financial institutions. This is because the extend of the disclosure strictly requires the dependency of the institution's extent of their entity's used of their financial instruments and its exposure to its risk. One example that can define this explanation is the loan commitment (as an un recognized financial instrument). Prior to any information being disseminated in the institutions, it was announced that the latest disclosure requirements are applicable for periods starting before on after 1 January 2007 (IFRS News, 2006). Through this, all of the institutions are encouraged to submit their application. We all know that there are a lot of financial instruments, which have been designed for various institutions and will all of these; one of the most distinct assets that the IFRS 7 holds amongst of them is that has a way of providing boundaries to financial institutions which can help them protect and at the same time sustain their financial operation. Also, since it was implemented to disclose their financial records, the IFRS 7 allows them to have a further understanding on how each institution can further generate a more profitable income for the next five years. At some point, this method works in favor for the institutions. One of the unique and interesting features that I found regarding this was that it is distinctly divided into two sections. The first covers disclosures are about the figures in the balance sheets or income statements, while the other deals with the risk disclosure. (IFRS News, 2006). From this division, we can see that there is a unique way of approaching the financial aspect of the each institution, such that the second section is the one who solves or takes charge with the risk disclosures that normally and consistently arise from a financial instrument, giving the approach and the system, an eye to oversee the whole situation, through the perspective of the management. Furthermore, the information, which was provided for disclosure and also for the main personnel in the management division, is the one that disclosed the information. This new scope or system of developing the financial instrument is quite interesting such that for the past years, if we would look into the picture and scenario of businesses and corporations that have probably was on the top chart once in the business reviews and then suddenly disappeared, or have lost their momentum into the big picture, have a common analogy and reason behind the collapse of their institution, can be rooted mostly from the dysfunction in the management system with regards to their perspective on financial stability. Thus, since the IFRS 7 holds the new method

Projects and their management Essay Example | Topics and Well Written Essays - 2000 words

Projects and their management - Essay Example In the enclosed review of what, how, and when certain needed skills or knowledge is warranted to defining how critical a project manager is to a project will show its overall importance in reaching success (Savory and Butterfield 1998). The focused areas are knowledge and application that outline the needed awareness in critical points that presents challenges from a less skilled profession to remedy a particular situation. In such an analysis, the outcome will provide the understanding to the true reasoning’s by the assumption that a project manager is the proactive measure to facilitating the project scope (Thill and Bovee, 2007). The evaluation on all the needed processes, interventions, identifying, traceability and monitoring - that has the definitions of what required skills are necessary to be deemed a capable project manager. Identified Required Knowledge and Usage of Application from a Project Manager The usage of core project management tools is essential to effectiv ely monitoring the progress of the project. The project manager awareness of controversies is the important standpoints for the ability to showing how connections and distinctions relate to differences in a functional environment (O’Conor, 2000). ... The true understanding of the defined processes for making the project successfully happen provides the matrix to forming the right strategy of execution (Thompson and Bunker, 2006). The project manager’s skill set is in the decision making ability that will determine a successful outcome will occur or an unsuccessful outline. The senior project manager is about making the discipline of initiating, planning, executing, and the actual managing resources with the focus on completing specific deliverables within budget (Mantel, Meredith, Shafer, and Sutton, 2008). The needed quality and time restraints are the driving force that detects the project manager skill of decision making to either a successful outcome or a failure (Jennings, 2010). The building of the project manager’s skills are an integral part in determining if the planning of the project proves to being a profitable one – that is outline in the defined project scope. Therefore, the knowledge base is th e streamline of implementing an entire project from start to finish for adhering to the time and budget constraint. The prowess of the project manager must realize the scope vision and elements required in facilitating the needed pace of meeting deliverables dates and expectations of quality. The successful project manager is visionary to foreseeing challenges that can prevent the finish of certain or all deliverables, especially within the critical point, that reference a keen eye of perception to keeping pace. The identification of the key metrics are the important element to considering how the approach the can or should be applied in meeting project scope goals. The project life cycle correlates to the determining factor of

Production strategies. SSF Essay Example | Topics and Well Written Essays - 2000 words

Production strategies. SSF - Essay Example Any mishap will fully jeopardize their objectives and render them out of business. Sizzling Stir Fries (SSF) is a company that deals within the product range of food products. The company was established in the 1960s. Over the years, it has diversified its products. This has been done by change of types of products, natural attrition of the existing products after end of their life cycle as well as need to venture into other productive products. This paper will therefore focus on two issues. The first will be to evaluate hoe SSF can ensure that its employees are motivated enough to achieve a stringent food safety requirements as stipulated by the UK government. The second will be an analysis of production strategies that will be required to satisfy the range of products produced. How to achieve stringent food safety requirements Food safety requirements in the UK are usually co-ordinated by the Food Standards Agency (FSA). This brief knowledge on how food safety is achieved in the UK is important in that is going to provide a leeway for understanding the type of motivation that employees should be given so that effective standards are maintained. The company has had a great variety of changes in the goods and services that it produces. The latest three areas of specialization; stir fry, prepared vegetables and ready to eat products put the company in a direct connection with FSA. This is because of the sensitivity of food products that it produces (FSA, 2013, p. 1). The requirements by FSA on food production are based on several policies that ensure that customers are safe in their consumption. All companies are therefore supposed to carry out a training program that would ensure that all the rules and regulations are adhered to. To achieve food safety requirements, all companies are required to abide by the laws and regulations as set by FSA and implemented by the local authorities. One of the regulations is based on the premises in which the food is prepared. The food premises are supposed to meet all the cleanliness regulations from the time the raw materials for production are received at the company. This therefore goes back to the area of where raw materials are purchased from (Dankers, 2007, p. 142). The reason is that most of the purchased items are very perishable and must be handled clearly. According to the European Commission Regulations, all animals and food products must be approved for market use. This strict and stringent measure must be taken into account to make sure that all the needs are taken care of in an effective manner (FSA, 2013, p. 2). The last important regulation is that of providing the required training to the staff members so that they adapt effectively. FSA rules indicate that all the rules and regulations for every organization need to be customized in that they must adhere to local needs. Much as the training done in institutions of learning is a focused issue. All companies must have their own planning so that hired employees are internally trained so that they understand the needs as stipulated by the company and the government at large. Employee motivation For employees increase their productivity, there has to be a balance on the objectives that must be gained so that the gains in terms of the company profits must be related to their satisfaction. Total work content must be related to total effective time. Motivation in the production area is related to two issues; total work

Cultural diversity and the challenge of innovation Essay

Cultural diversity and the challenge of innovation - Essay Example The effect of this change, aided as it is by the blinding speed of globalization’s driver ICT represented by the Internet, was more than enough to put every organization ready to become global or international. The change has set everybody on equal footing with the rest in terms of opportunities. With the change, business has to move faster if it does not want to be left behind. â€Å"Innovate or die,† warns Tom Peters, as if the options were a breeze. Of course, dying was not a desired option, and innovation, the one and only last, has the greatest impact on organizations as it touches on people and culture. One natural consequence of globalization and ICT is the sudden increase in the number and diversity of people in organizations. From educational institutions to tourism to every other business, there would be heightened people movement, and this was not only happening across nations. Some two decades ago, Cox (1994) talked about the relevance of cultural diversity in organizations. He wrote along the lines of an increasingly diverse workforce by reason of race, gender and nationality – a trend that was addressed at that time by such strategic concepts as cross-functional teams for competitive edge. He also noted the growing emphasis of companies to internationalize – a business activity that naturally required crossing of cultures – and the recognition given to cultural diversity as an influence to organizational productivity. The aim of this paper is to examine cultural diversity and determine how relevant it is in the effort of organizations to respond to the current changes that affect them. The paper shall attempt to answer the question â€Å"Is cultural diversity relevant to organizations?† by describing its dynamics and implications upon organizations, and if found to be still relevant, to identify how it can be made more useful in responding to the challenge of innovation. 2. Cultural Diversity Diversity is said to be right at the core of human development (Lamb and Bornstein, 2011). Every person is unique. By reason of his genetic configuration and psychology, a person will be different from another in the face of their similarities. That differentiation is what shows in his gender, age, color, birth, race, culture, health, sexual orientation and other dimensions. When this uniqueness is ranged against a social, economic or any collective setting, it produces a condition known as diversity (Diller, 2011). Culture People are different in many ways. When they meet with regularity, as in a workplace or as members of an aggrupation, people exhibit certain norms of conduct and follow certain procedures that taken together is known as culture. Culture is defined in different ways by different authors. Bodley (1994) sees culture as what people think and do, what they produce, their beliefs and values. Cant et al (2007) refer to culture as myths, values, customs, rituals, language and laws th at combine to form the basis for their behavior. Culture is seen as a peculiar way of behaving or believing which members share with one another (Briscoe and Schuler, 2004). Hofstede (1991) defines culture as the â€Å"collective programming of the human mind that sets the distinction of the members in relation to other groups.† In sum, culture can be described as a set of values, beliefs, and concepts that enable a group to make sense and meaning of its existence. It is also a collective expression that

Human Resource Information Systems Essay Example | Topics and Well Written Essays - 500 words

Human Resource Information Systems - Essay Example In this industry, there is need for the employees to work in a friendly and comfortable environment. Their working environment can only be comfortable if they have things to do with their health looked into; if they get their salaries effectively and other things related to work made easier for them. This will definitely boost the morale of the employees and they do their work effectively (Gupta & Chhabra, 2004). When Mr. Morgan approached me regarding all this for advice as a HR Consultant, I decided to introduce him to the Human Resources Information System (HRIS). Since he would like to travel less due to the cost of fuel, the HRIS should be able to help him execute most of his work effectively and at cheaper costs. This will save him time, energy, and money. IDENTIFIED PROBLEMS: The HR problems Mr. Morgan is facing will be no more as soon as the use of HRIS is put in place. The main problem was travelling every week, which wasted so much time and was expensive in terms of fuel. The manner in which he made the payroll checks and the use of Excel spread sheet to prepare them would greatly be improved through HRIS. Some of the HR functions, which will be efficient, in this case are: Salary determination is one of the most important functions in this business. The work of HRIS in this field acts as the software for clarifying for data entry, data information, and data tracking. It helps the Human Resources to manage accounting functions and payrolls within the company or business. It is the most efficient and effective way of transacting accounting calculations. It will provide data, which is very accurate. It can also keep and retrieve big amounts of data making work much easier (Gupta & Chhabra, 2004). HRIS NEEDS ASSESSMENT: The computerization used in the HRIS might create more effective process in the functions above, due to the fact that it has the ability to perform very heavy tasks within a short time. For instance, if the HR

I don't have a topic it just needs to not be ethical, moral or Research Paper

I don't have a topic it just needs to not be ethical, moral or religious in answering a policy question - Research Paper Example Many states in the United States, for example, are enacting laws that require corporate organizations to accommodate needs of domestic violence victims through granting leave (Martin, 2013). Understanding the root cause of domestic violence, and other forms of violence, may however inform the legal approach to the problem. Protecting children from witnessing instances of domestic violence, according to O’Brien, Cohen, Pooley, and Taylor, reduces possibility of the children’s engagement in domestic violence during their later stages of life (2012). This is consistent with Cycle of Violence theory that explains transfer of domestic violence traits from parents or other people in an environment to children and suggests that laws on domestic violence more stringent may be a long-term solution to the domestic violence problem (Gonzalez and Corbin, 2011). Domestic violence is a significant social problem whose implications extend to financial scopes. Its psychological and physical effects on victims reduce their potentials that even force them out of employment to grant them legal leave from duty. While a legal approach has failed to reduce incidences of domestic violence in the society, despite its perceived able framework, protecting new generations from experiencing or witnessing domestic violence may be a long-term solution to the problem because of its hypothesized ability to reduce aggression in the new generation (Martin, 2013; Gonzalez and Corbin, 2011). The study is significant in understanding significance of violence experience during childhood and the long-term cause of domestic violence in the society. Its results will determine the significance and establish a basis for legal policies that can address the problem. Establishing significance of children’s exposure to domestic violence will mean that strict laws, im plemented over a generation, are necessary for a long-term solution to

The Importance of Reading Essay Example for Free

The Importance of Reading Essay People are living in a world where new technological advances have replaced the desire to read. Reading, in my opinion, has become less important to many adults and children. Some children and teenagers prefer to watch a movie or playing video games instead of reading a book. Some adults prefer to watch television than to read a good novel. Reading, in some people’s agenda, is not as important as it used to be like in the early 1900’s. To some people watching a movie or basketball game on television is more important than reading a book. It is a well-known fact that when there were no televisions or computers, reading was a primary leisure activity. People would spend hours reading books and travel to lands far away-in their minds. The only tragedy is that, with time, people have lost their skill and passion to read. There are many other exciting and thrilling options available, aside from books. And that is a shame because reading offers a productive approach to improving vocabulary and word power. It is advisable to indulge in at least half an hour of reading a day to keep abreast of the various styles of writing and new vocabulary. It is observed that children and teenagers who love reading have comparatively higher IQs. They are more creative and do better in school and college. It is recommended that parents to inculcate the importance of reading to their children in the early years. Reading is said to significantly help in developing vocabulary, and reading aloud helps to build a strong emotional bond between parents and children. The children who start reading from an early age are observed to have good language skills, and they grasp the variances in phonics much better. Reading helps in mental development and is known to stimulate the muscles of the eyes. Reading is an activity that involves greater levels of concentration and adds to the conversational skills of the reader. It is an indulgence that enhances the knowledge acquired, consistently. The habit of reading also helps readers to decipher new words and phrases that they come across in everyday conversations. The habit can become a healthy addiction and adds to the information available on various topics. I personally love to read, I could say it’s my hobby but its more than that I could stay up all night just to finish a book I’m reading, and once I open a book I cant close it. I really don’t care what the book is about or of what genre it is if it’s interesting I wont stop reading until I finish it. I think of reading as a way to escape from everything, travelling to another time or place even to another world. Once you get into the story you’ll never want to get out. Some people even imagine they are one of the characters from the story, I’m not one of them but I do imagine as if I’m there just watching everything, I imagine every single detail, the characters features, the setting, even the most minimum detail as a necklace one of the characters is using, you actually feel every emotion the characters feel and you can actually fall in love with them. Everyone deep inside is a reader; they just haven’t found the right book.

Medical Translation: Functionalist Approaches

Medical Translation: Functionalist Approaches Medical Translation: functionalist approaches Translation is used in every day life and is used in multiple fields of work. Translation is defined in the Collins Dictionary as a piece of writing or speech that has been translated into another action and as the act of translating something. The two definitions point to the two different ways translation is explained, the first as being the product produced by the translator and the second as the actual process of translation. The dictionary of Translation Studies additionally introduces sub types of translation such as literary translation, technical translation, subtitling and machine translation. . .interpreting (Hatim, Munday: 2004). The sub type I shall be discussing is medical translation. At every milestone, translation was the key to scientific progress as it unlocked for each successive inventor and discoverer the minds of predecessors who expressed their innovative thoughts in another language (Fischbach: Wright1993). Translation has been used since Hippocrates and Galen in Greek and was translated primarily into Latin and Arabic, Arabic especially in the Middle Ages. This spread knowledge to the Western world producing translations into Castilian and English. [1] Whilst medical translation shares many features with other sub types in that it involves adapting to cultural differences, using technological tools and communicating through linguistic barriers, this sub type has many specialties of its own. When translating a medical text, one must be careful to communicate the specific knowledge correctly. Factual complexity and accuracy becomes a main priority for the translator. Medical terminology, communicative situations (among specialists, in the mass media, in education, to patients, in campaigns and internationally), medical genres and medical ethics also influence the way in which translation is produced. I shall be focusing on functional approaches to translation, introducing Vermeers Skopostheorie, Reiss theory of text types and functional equivalence and lexical equivalence, applying them to the aspects of specific audiences, Latin based terms, medical English standardisations and medical texts. Functionalism is the broad term used for the many theories that approach translation using functionalist methods. It focuses on the importance of the function or functions of the target text rather than the linguistic equivalence to the source text. Texts are produced with a specific purpose or function in mind. The starting point for any translation is therefore not the linguistic surface structure of the ST, but the purpose of the TT (Nord: 1997). It also includes the notion of translation as communication. Translation is defined as a purposeful, transcultural activity whose linguistic form depends on the function or the purpose of the target text. Action, communication and cultural theories are included under the title of functionalism. Skopostheorie, translational action theory and Reiss and Vermeers general theory of translation will be discussed in further detail. The main theory within functionalist approaches is Skopostheorie, (Skopos meaning purpose in Greek) by Hans J. Vermeer. Vermeer believes that linguistics alone is not enough for translation as he believes not all problems can be solved solely through language abilities but that the prime principal determining any translation process is the purpose (Skopos) of the overall translational action (Vermeer: Nord1997). He understands translation as a human action and that all actions are intentional and purposeful behaviours. Any form of translational action, including therefore translation itself, may be conceived as an action, as the name implies. Any action has an aim, a purpose. [. . . ] The word Skopos, then, is a technical term for the aim or purpose of a translation (Vermeer1989). He also adds that these behaviours take place in situations which happen in cultures which consequently leads to the Skopostheorie being culture specific as Holz-Manttari explains in further detail. From this thought, Vermeer derives a general Skopos rule, which states: translate/interpret/speak/write in a way that enables your text/translation to function in a situation in which it is used and with the people who want to use it and precisely in the way they want it to function. This rule is designed to solve dilemmas such as free vs. faithful translation or dynamic vs. formal equivalence. Another general rule mentioned which will be discussed again later is the coherence rule which concerns the target text must be coherent to allow the intended users to understand it in their situational circumstances. Another important factor of Skopostheorie is that of the addressee which is the receiver or the audience. The translation must be directed towards them, which is why purpose and the coherence rule are so important. *** Holz-Mantarris translational action theory goes further than the Vermeer in that she completely disregards the word translation, referring to it instead as message transmitters. She describes translation as a complex action designed to achieve a particular purpose. The purpose of this theory is to create the ability to send messages across culture and language barriers by experts (translators). She also highlights the actional aspects of the translation process such as the translator, initiator, message receiver and the situational conditions in which the action (of translation) takes place. She calls this intercultural cooperation. The audience, as mentioned before, is one of the most important factors in Skopostheorie. Medic al translation requires the translator to be faithful to the client as well as the source text*** In the medical field, there are two main types of audiences: the lay audience and the expert audience. Often, when translating medical technical terms, which is very common and can cause problems, terms can be changed or borrowed in order to make sense in the target culture. Because Latin was once the lingua franca of medicine and Greek was the original language of medical text, there still exists today a great amount of Latin and Greek based words and the use of Latin and Greek suffixes and prefixes. This topic has proved difficult for translators as it challenges the Skopostheorie in that linguistic equivalence is not necessary. We see here that this is not always the case. The use of Latin words is extremely common in English; words such as pneumonia and appendicitis are very common amongst both types of audiences. When translating into romance languages and even into Germanic languages, the word tends to be equivalent to that of the English with minor spelling changes: English Spanish  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   German Pneumonia Neumonia Pneumonie Appendicitis Apendicitis Appendizitis However, in some countries such as Germany and Denmark, Latin continues to act as the lingua franca in medicine and therefore is not understood by the lay audience. They are replaced by more popularized terms in order to reach out to a larger audience: German Danish Expert:   appendizitis expert: Appendicitis Non- expert: Blinddarmentzundung non-expert: blindtarmsbetoendelse Expert: Pneumonie expert: pneumoni Non- expert: Lungenentzundung non- expert: lungebetoendelse [1] Hippocrates, known as the Father of Medicine, was known for his medical knowledge which Galen and Perganum expanded 400 years after. The numerous articles of Hippocrates and Galen gave way to the need of medical translation. Aulus Cornelius Celsus, otherwise known as Cicero, was the first to translate the Greek works and terms into Latin in the first century AD. With the rise of Islam in the seventh century, and the establishment of medical schools in the major cities such as Baghdad and Damascus created the need for translation of Greek medical works into Arabic. By the Middle Ages, translation from Arabic to Latin saw the spreading of information to the Western world and Christian Europe and with the colonisation of the New World and the discovering of new drugs, translations into Castilian and English were produced in the sixteenth century (Fischbach: Wright1993). In the Renaissance, Latin was the Lingua Franca creating translations between Latin and vernacular languages and b etween vernacular languages themselves (Montalt and Davies, 2007). Bill T Jones | Choreography Analysis Bill T Jones | Choreography Analysis Bill T. Jones is a startling choreographer with an exhilarating presence and charisma. His compilation of Solos includes Tea for Two, Ionization, and Chaconne. All different from each other are depictions of Jones emotions and body movements to their extremes. Giving a brief explanation to each, Tea for Two is a depiction of emotions like desire and love, while Ionization has an extreme involvement of strong music, movement, and expressions which depict violence, and finally, Chaconne is a flickering performance that displays the involvement of artistic techniques and music insinuating a certain story, or feeling. This paper is an outlook of Jones work, especially in these performances, and how each performance is an artistic representation of a certain theme. The classical song Tea for Two is what Bill T. Jones performance is based upon. It is a solo which he presents twice; once on the stairs, and next in a studio. On the other hand, as a spectator I have realized that differences in the setting may lead to a vast distinction between two performances. Firstly, Tea for Two: On the Stairs. The performance is a depiction of love, freewill, and desire. I have felt that Jones performs with his full fervor on the streets out to celebrate. Also, the lyrics sung by Blossom Dearie speak for themselves as the dancer is blissful and content about the house created for him and his lover away from the busy life of the city. As a spectator, I have felt that it is a romantic ballad dance where Jones is conveying to his audience that he is happy regarding being alone with his loved one with no one to bother them enabling them to have tea for two and enjoying it without any interruption. Also, I have realized that Jones free style of dancing reflects his freedom and peacefulness. The daylight tends to capture the essence of love and happiness, while his facial expressions are of a happy man content with his living and life. In this dance sequence, the space is fully utilized with no sets, or props to disturb the concept of freedom he is trying to convey to the audience. A very natural and clean performance, which shows what little happiness in life, along with a loved one, can do to a human being. Furthermore, moving on to Tea for Two: In the Studio. Although Jones had performed the piece twice on the same music, the difference in the setting gave the dance another feeling. I felt that Jones is not performing with the same essence, or power. Also, I believe that his performance in the studio constrained him; impeded him from moving freely, unlike his performance on the stairs where you could feel the positive energy shimmering from every movement and line Jones had made. Moreover, Do you think Ill make a soldier, every round goes higher and higher, do you want to have your freedom? are the words of Bill T. Jones which he added after his performance to the piece in the studio. To me, this altered the mood after watching the performance as Jones left the audience in deep thoughts; also, as a spectator, I did not fully understand the intention of such a quote; however, it could be that Jones is doubtful while referring to himself as a soldier, and questionable regarding acquiring his freedom as he pictures it with his loved one. Moving on to another spectacular piece by Bill T. Jones entitled Ionization. Ionization is a piece choreographed to a classic music composition by Edgar Varese, and this dance piece is an excellent synchronization of different instruments with the moves of the body. Also, as a spectator, the dance is an ionization of the human body to different beats in life and is also built on the premise of how a body moves to the most sensitive distinctions of various kinds of percussive sounds. Different instruments such as the bass and the drums are a pleasure to hear when synchronized to the soft and soothing sounds of the piano and the saxophone. Also, as a spectator, I was awakened with the African like beats, as well as, beats similar to the roaring of a lion and sirens allowing Jones to shift within the space using stronger movements according to the beat of the instruments. Furthermore, I consider this solo performance by Jones very much attention grabbing as the way he communicated with his audience through his facial expressions was outstanding; also, the way he switched swiftly from one expression to another, yet having full control to make such switches apparent was expertly done. Moreover, violence could be seen gradually in the performance from the beginning to the end from his sharp stomp like movements to his facial expressions with accordance to the music played. However, although Jones performance fully caught my attention, the music he chose for such a sequence was somehow dominating making me focus in certain parts with the music played rather than Jones while performing. Additionally, Chaconne is framed around spoken text and the music of Bachs D-Minor Partita for Solo Violin. This solo performance accompanied by Bachs D Minor Partita could be about Jones personal memories accompanied by the appearance of written text on screen about a close friend of him, or it could be dedicated to his mother. Moreover, I believe that the text is directly related to the sad and painful moves of Jones in the dance sequence. Also, the text helped me as a spectator understand the mood of the performer and comprehend the purpose of the dance sequence as it felt that Jones was somehow impersonating the person in agony, or remembering how she felt during her instant of pain, especially during the part while he was on the floor with his hand forming a heart like shape and the text appearing. Furthermore, the music, which is entirely a mix of violins, added to the softness of the performance. Although there is a huge difference between Jones four performances, I have liked Chaconne the most as I have felt that it reflects certain hidden emotions within him which he is able to only reflect through dance and hidden speech. Last but not least, it is difficult to compare between two profound choreographers such as Bill T. Jones and Merce Cunningham; however, I have admired Jones style most as to me he managed to portray original contemporary dancing and choreography. Although Merce Cunningham is a pioneer in contemporary dancing, and I am not a guru in such a field to fully express my opinion; however, that is what I have realized after watching several pieces by both choreographers. Bill T. Jones is an exquisite performer and choreographer who is able to grab hold of his audiences attention from the moment he starts dancing. Also, his ability to establish choreography with clear messages sent is an attribute which I find significant. Bill T. Jones is truly proficient in his field of expertise, and really has the ability to keep his audience engaged wherever and whenever he performs.

Influences on Achievement of Funding Goals

Influences on Achievement of Funding Goals Donna R. Lowe The purpose of the following dissertation, A content analysis of Kickstarter: The influence of framing and rewarding motivations on campaign success (Sauro) was to examine the implications of message framing in determining the success or failure of Kickstarter campaigns. The study also explored to what extent conditional cooperation influences the achievement of funding goals. The study applied framing theory on the decision-making process, which has significant prior research but not in regards to crowdfunding. Sauro (2014) uses a definition used in a previous study by Dr. Inge Sorenson. Crowdfunding is defined as â€Å"the micro-financing of individual projects, and is catered for online by sites like indiegogo.com, sponsume.com, crowdfunder.co.uk, pledgie.com, and kickstarter.com (Sorenson, 2012). Sauro (2014) also uses the term project-based communities â€Å"meaning a unique community of early adopters and investors of a new product or service that hone and gather funding ple dges. One hundred and twenty Kickstarter campaigns were randomly selected and sampled. The key findings were broken down by research questions. The first research question sought to uncover to what extent did the choice of framing methods affect success or failure of the crowdfunding campaigns. The finding was campaigns that used framing had a significantly higher rate of success as opposed to campaigns that used no framing. â€Å"Out of all campaigns that were successful, 83.3% utilized a prescribed framing method, opposed to 40.8% of unsuccessful campaigns that did not† (Sauro, 2014, p. 24). The finding of research question two suggests a strong correlation between successful campaigns and conditional cooperation measures. The study identified a relationship between conditional cooperation and donation levels at the end of set funding periods across all categorical tiers (low, medium, and high). Supplemental data was also provided. Additional factors that had an impact on t he probability of a successful crowdfunding campaign were identified. The findings were factors such as including a self-narrative, stating personal qualifications, and having a lower funding goal had a strong influence on the outcome. Sauro (2014) found â€Å"of the campaigns that were successful, a self-narrative was present 82.0% of the time, as opposed to 62.2% when campaigns were unsuccessful† (p. 29). Suggestions for further research included the need to use a larger sample size from all project categories and continued investigation of personal narratives influence. There was also a suggestion to include research on whether text-based, video-based, or combination-framing messages could be efficiently used to achieve objectives. Sauro (2014) used prospect theory and message framing as drivers for the crowdfunding donor decision-making process. Prospect theory attempts to explain the decision-making process based on the way the material is presented (Sauro, 2014, p. 8). In involves a decision problem, decision maker, and a decision frame. Rational decision-makers â€Å"will opt for the prospect that offers the highest expected utility† (Tversky Kahneman, 1981, p. 453). Prospect theory expresses outcomes as positive or negative deviations (gains and losses) with regards to an S-curve. Message framing is an important concept for crowdfunding and the study by Chun-Tuan Chang and Yu-Kang Lee (2010) was used to support Sauro’s dissertation. Framing is â€Å"the presentation of one of two different but equivalent value outcomes to decision-makers, where one outcome is presented in positive and the other in negative terms† (Chang Lee, 2010, p 197). Compliance is encouraged using framing demon strating gains and losses. Bruno S. Frey and Stephan Meier conducted a field experiment about charitable giving and conditional cooperation in 2004. The experiment supported the theory on conditional cooperation and found that if people know others are making charitable contributions, the likelihood of them making contributions increases but is still linked to previous charitable behaviors (Frey Meier, 2004, p. 1717). People tend to compare themselves socially to others and are inclined to make charitable donations based on those they identify with. These works are extremely important and the foundation for understanding donor behavior while researching crowdfunding. Crowdfunding is a relatively new concept. It involves communications, fundraising, technology, and a social media platform. Sauros (2014) used prospect theory, framing, and conditional cooperation as factors of influence for successful crowdfunding campaigns. Daniel Kahneman and Amos Tversky (1979) developed the prospect theory. Kahneman and Tversky’s study â€Å"Prospect Theory: An analysis of decision under risk† introduces one of the most quoted theories in economic psychology. Developed in the 1980s, the theory has had considerable impact on understanding how decisions are derived using gains and losses. The theory of framing was introduced by Erving Goffman (1974). Goffman was considered â€Å"the most influential American sociologist of the twentieth century† (Fine Smith, 2000). Goffman wrote several books and fundamentally changed the way we think of social interactions. His work is considered unparalleled and he is extensively cited in behavioral studie s. His greatest contribution to social theory is his study of symbolic interaction, which began in 1959. He studied social order, interactions, stigmas, routine transactions, human behavior, etc. He was not a traditional sociologist and his work was influenced by Durkheim, Freud, Mead, Simmel, and Radcliffe-Brown (Yakkaldevi, 2013, p. 74). Albert Bandura is associated with social learning theory. According to Bandura (1977), Learning would be exceedingly laborious, not to mention hazardous, if people had to rely solely on the effects of their own actions to inform them what to do. Fortunately, most human behavior is learned observationally through modeling: from observing others one forms an idea of how new behaviors are performed, and on later occasions this coded information serves as a guide for action.† Bandura is well known for his famous Bobo doll experiment where children were demonstrated to learn aggression through observations and interactions (Bandura, Ross, Ross, 1961). His work is considered to be part of the cognitive revolution in psychology. References Bandura, A. (1977). Social Learning Theory. New York: General Learning Press. Bandura, A., Ross, D. Ross, S.A. (1961). Transmission of aggression through imitation of aggressive models. Journal of Abnormal and Social Psychology, 63, 575-82. Chang, C., Lee, Y. (2010). Effects of message framing, vividness congruency and statistical framing on responses to charity advertising. International Journal of Advertising, 29(2), 195-220. Fine, G. A. Smith, G. W. (2000). SAGE Masters of Modern Social Thought: Erving Goffman (Vols. 1-4). London: SAGE Publications Ltd. doi: http://dx.doi.org/10.4135/9781446261545 Frey, B. S., Meier, S. (2004). Social comparisons and pro-social behavior: Testing conditional cooperation in a field experiment. The American Economic Review, 94(5),1717-1722. Sauro, J. J. (2014). A content analysis of Kickstarter: The influence of framing and rewarding motivations on campaign success (Doctoral dissertation). Available from ProQuest Dissertations and These Database. (UMI No. 1556435) Sorenson, I. E. (2012). Crowdsourcing and outsourcing: The impact of online funding and distribution on the documentary film industry in the UK. Media Culture and Society, 34, 726-743. doi:10.1177/0163443712449499 Tversky, A., Kahneman, D. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263-291. doi: 10.2307/1914185 Tversky, A. Kahneman, D. (1992). Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and Uncertainty, 5(4), 297–323. Yakkaldevi, A. S. (2013). Phenomenology and Enthomethodology. India: Laxmi Book Publication.

The Spanish Influenza in Missouri :: Journalism St. Louis, Missouri Health Essays

The Spanish Influenza in Missouri Reports of the Spanish Influenza continue to bombard us from St. Louis, Missouri, as inhabitants of that fine city take many precautions to safeguard themselves and their families against this incendiary malady currently sweeping our great nation. At a time of war when our country needs our strength the most it is important that we fight this Influenza head on, taking whatever actions necessary to eradicate it from our fine shores. Let us take a page from St. Louis's book on how to prevent this illness from spreading. Culling through the pages of this fine publication you may notice many advertisements for products meant to maintain the health of your loved ones. Things to help them look and feel their best. Instructions and products for ridding oneself of dandruff or bleaching one's freckles with lemon juice abound--helping you, dear readers, to be your best! Most importantly [there are] prescriptions for how to keep your family healthy, and to avoid catching the Spanish Influenza that has the very city of St. Louis in its fiery grips! One of the most common preventatives are powders or liquids meant to cleanse the bowels of impurities which leave your body tired and open to infection by this dastardly plague. Also for your little ones who do not enjoy the tastes of medicines are Cascarets, delicious candy-like drops that cure children of biliousness and sour stomach. As we all know, purging one's system of impurities is a medical miracle that has been long-held and used to restore the healt h of many from early times in western Europe. However, there are drawbacks to using medicines as a preventative against the Influenza epidemic. Why, just yesterday the Water Commissioner answered complaints from the citizens of St. Louis who complained that "the water tastes like medicine." The water, he explained, is not being treated in any different fashion, but that "an unusually large number of people are taking medicine and its lingering taste might be attributed by some to the water." By October 3, earlier this year influenza had been reported in 43 states. It was at this time that St. Louis's Health Society Head, Dr. Evans, urged any members of the community with ailments as minor as the common cold to cover their mouths upon sneezing, and to please cover their faces with a hankie when in public. The Spanish Influenza in Missouri :: Journalism St. Louis, Missouri Health Essays The Spanish Influenza in Missouri Reports of the Spanish Influenza continue to bombard us from St. Louis, Missouri, as inhabitants of that fine city take many precautions to safeguard themselves and their families against this incendiary malady currently sweeping our great nation. At a time of war when our country needs our strength the most it is important that we fight this Influenza head on, taking whatever actions necessary to eradicate it from our fine shores. Let us take a page from St. Louis's book on how to prevent this illness from spreading. Culling through the pages of this fine publication you may notice many advertisements for products meant to maintain the health of your loved ones. Things to help them look and feel their best. Instructions and products for ridding oneself of dandruff or bleaching one's freckles with lemon juice abound--helping you, dear readers, to be your best! Most importantly [there are] prescriptions for how to keep your family healthy, and to avoid catching the Spanish Influenza that has the very city of St. Louis in its fiery grips! One of the most common preventatives are powders or liquids meant to cleanse the bowels of impurities which leave your body tired and open to infection by this dastardly plague. Also for your little ones who do not enjoy the tastes of medicines are Cascarets, delicious candy-like drops that cure children of biliousness and sour stomach. As we all know, purging one's system of impurities is a medical miracle that has been long-held and used to restore the healt h of many from early times in western Europe. However, there are drawbacks to using medicines as a preventative against the Influenza epidemic. Why, just yesterday the Water Commissioner answered complaints from the citizens of St. Louis who complained that "the water tastes like medicine." The water, he explained, is not being treated in any different fashion, but that "an unusually large number of people are taking medicine and its lingering taste might be attributed by some to the water." By October 3, earlier this year influenza had been reported in 43 states. It was at this time that St. Louis's Health Society Head, Dr. Evans, urged any members of the community with ailments as minor as the common cold to cover their mouths upon sneezing, and to please cover their faces with a hankie when in public.

The Minamata Disease as an Example of Government Weakness Essay

The Minamata Disease as an Example of Government Weakness The effects of Minamata disease, which originated in Minamata, Japan, first came to the attention of local fishermen. They referred to cats afflicted with the disease as â€Å"the suicide-prone group of dancing cats† due to their tendency to ‘dance’ around, and then jump into the nearby bay (Ui, 1992). From 1940 through the late 20th century, thousands of inhabitants of Minamata developed that same neurological disease that resulted from heavy industrial pollution of Minamata Bay. They did not receive adequate government protection against such a disaster because of the city’s poor economic structure and the relentless national drive to industrialize Japan. One company, Nippon Chisso Ltd. or Chisso for short, which worked extensively with chemicals in the production of energy and of industrial materials, comprised the local economy. Before it became a center for the Japanese chemical industry, Minamata generated revenue almost entirely from salt production enterprises. In 1908, the Japanese government had recently decided to take over the salt industry and the village needed new sources of income. At the same time Jun Noguchi, a recently graduated electrical engineer and founder of the Chisso Company, needed a location to build a new carbide production plant. Minamata won the bid for the factory’s location through a favorable deal to Noguchi, in which the local government offered the old salt industry’s land at very low prices. The city also provided a route for electricity to reach the factory at no charge (Ui, 1992). These offers established the policy of the government, and indeed of Minamata as a whole, to defer to the Chisso Company’s wishes to ... .... Measures to avoid a situation of that nature must focus on the enactment of effective policy by both local and national governments to regulate their industries, and focus on having an adequate number of revenue-generating industries so as not to jeopardize public interests. References Ui, J. (1992). Industrial Pollution in Japan. Tokyo: United Nation University Press Harada, M. (n.d.). Minamata disease and the Mercury Pollution of the Globe. Retrieved February 19, 2003, from http://www.einap.org/envdis/Minamata.html#name. Littlefield, A. (1996). Minamata Bay Pollution in Japan and Health Impacts. Retrieved February 19, 2003, from http://www.american.edu/TED/MINAMATA.HTM. Ziegler, J. (1995). Rays of Hope in the Land of the Rising Sun [Electronic version]. Environmental Health Perspectives, 103(5), (n.p.).

Dividend Policy Trends

Dividend Policy of Indian Corporate Firms: An Analysis of Trends and Determinants Dr. Y. Subba Reddy1 The present study examines the dividend behavior of Indian corporate firms over the period 1990 – 2001 and attempts to explain the observed behavior with the help of trade-off theory, and signaling hypothesis. Analysis of dividend trends for a large sample of stocks traded on the NSE and BSE indicate that the percentage of companies paying dividends has declined from 60. 5 percent in 1990 to 32. percent in 2001 and that only a few firms have consistently paid the same levels of dividends. Further, dividend-paying companies are more profitable, large in size and growth doesn’t seem to deter Indian firms from paying higher dividends. Analysis of influence of changes in tax regime on dividend behavior shows that the tradeoff or tax-preference theory does not appear to hold true in the Indian context. Test of signaling hypothesis reinforces the earlier findings that dividen d omissions have information content about future earnings. However, analysis of other non-extreme dividend events such as dividend reductions and non-reductions shows that current losses are an important determinant of dividend reductions for firms with established track record and that the incidence of dividend reduction is much more severe in the case of Indian firms compared to that of firms traded on the NYSE. Further, dividend changes appear to signal contemporaneous and lagged earnings performance rather than the future earnings performance. 1 Asst. Professor, Institute for Financial Management and Research (IFMR), Chennai. The views expressed and the approach suggested are of the authors and not necessarily of NSE. 1. Introduction From the practitioners’ viewpoint, dividend policy1 of a firm has implications for investors, managers and lenders and other stakeholders. For investors, dividends – whether declared today or accumulated and provided at a later date – are not only a means of regular income2, but also an important input in valuation of a firm3. Similarly, managers’ flexibility to invest in projects is also dependent on the amount of dividend that they can ffer to shareholders as more dividends may mean fewer funds available for investment. Lenders may also have interest in the amount of dividend a firm declares, as more the dividend paid less would be the amount available for servicing and redemption of their claims. However, in a perfect world as Modigliani and Miller (1961) have shown, investors may be indifferent about the amount of dividend as it has no influenc e on the value of a firm. Any investor can create a ‘home made dividend’ if required or can invest the proceeds of a dividend payment in additional shares as and when a company makes dividend payment. Similarly, managers may be indifferent as funds would be available or could be raised with out any flotation costs for all positive net present value projects. But in reality, dividends may matter, particularly in the context of differential tax treatment of dividends and capital gains. Very often dividends are taxed at a higher rate compared to capital gains. This implies that dividends may have negative consequences for investors4. Similarly, cost of raising funds is not insignificant and may well lead to lower payout, particularly when positive net present value projects are available. Apart from flotation costs, information asymmetry between managers and outside investors may also have implications for dividend policy. According to Myers and Majluf (1984), in the presence of information asymmetry and flotation costs, investment decisions made by managers are subject to the pecking order of financing choices available. Managers prefer retained earnings to debt and debt to equity flotation to finance the available projects. Information asymmetry between agents (managers) and principals (outside shareholders) may also lead to agency cost (Jensen and Meckling, 1976). One of the mechanisms o reducing expropriation of outside f shareholders by agents is high payout. High payout will result in reduction of free cash flow available to managers and this restricts the empire building efforts of managers. The presence of information asymmetry may a mean that managers need to signal their ability to lso generate higher earnings in future with the help of high dividend payouts (Bhattacharya, 1979, John and Williams 1985, and Miller and Rock, 1985). However, the credibility of signals depends on the cost of signaling – the cost being loss of financial flexibility. High payout results in reduction of free cash flow when in fact the firm needs more funds to pursue high growth opportunities. Rozeff (1994) models payout ratios as a function of three factors: flotation costs of external funding, agency cost of outside ownership and financing constraints as a result of higher operating and financial leverage5. To summarize, several theories have been proposed in explaining why companies pay dividends6. While many earlier studies point out the tax-preference theory, more recent studies emphasize signaling and agency cost rationale of dividend payments. However, the dividend puzzle is yet unresolved and the words of Brealey (1992) poses the dividend policy decision as â€Å"What is the effect of a change in cash dividends, given the firm’s capital-budgeting and borrowing decisions? † In other words, he looks at dividend policy in isolation and not as a by-product of other corporate financial decisions. 2 Lintner (1956) finds that firms pay regular and predictable dividends to investors, where as the earnings of corporate firms could be erratic. This implies that shareholders prefer smoothened dividend income. Bernstein (1998) observes that given the ‘concocted’ earnings estimates provided by firms, the low dividend payout induces reinvestment risk and earnings risk for the investors. 4 Black (1976) notes that in the presence of taxes, investors â€Å"prefer smaller dividends or no dividends at all†. 5 According to Kalay (1982), in the absence of restraining covenants, shareholders can transfer wealt h from bondholders by paying off dividend to themselves either by selling existing assets or by reducing investment or by using proceeds of a senior debt. 6 Baker, Powell and Veit (2002) survey different streams of research work on dividends. 2 Fischer Black (Black 1976) may well apply in today’s context: â€Å"The harder we look at the dividend picture, the more it seems like a puzzle, with pieces that just don’t fit together†. One of the striking aspects that have been noticed in recent periods is the lower dividend paid by corporate firms in the US. Fama and French (2001) analyze the issue of lower dividends paid by corporate firms over the period 1973-1999 and the factors responsible for such a decline. They attribute the decline to changing firm characteristics of size, earnings and growth. However, it is to be seen whether the change owards lower dividends is a permanent feature or will there be reversal. A decline in dividends, according to Fama and Frenc h, could be due to lower transaction costs, improved corporate governance mechanisms, and the increasing preference towards capital gains. 1. 1 Indian Scenario In the Indian context, a few studies have analyzed the dividend behavior of corporate firms. Mahapatra and Sahu (1993) find cash flow as a major determinant of dividend followed by net earnings. Bhat and Pandey (1994) undertake a survey of managers’ perceptions of dividend decision and find that managers perceive current earnings as the most significant factor. Narasimhan and Asha (1997) observe that the uniform tax rate of 10 percent on dividend as proposed by the Indian union budget 1997-98, alters the demand of investors in favor of high payouts. Mohanty (1999) finds that firms, which issued bonus shares, have either maintained the pre-bonus level or only decreased it marginally there by increasing the payout to shareholders. Narasimhan and Vijayalakshmi (2002) analyze the influence of ownership structure on dividend payout and find no influence of insider ownership on dividend behavior of firms. However, it is still not clear as to what is the dividend payment pattern of firms in India and why do they initiate and omit dividend payments or reduce or increase dividend payments. Hence it is proposed to analyze the dividend payout of firms in India and analyze the dividend initiations and omissions and other changes in dividends and the signals that these events convey. Following Fama and French (2001), the present study also attempts to analyze the impact of profitability, size and growth on the dividend payout of firms. Similarly, following Healy and Palepu (1988) an attempt is made to analyze the signaling hypothesis, i. e. arnings information conveyed by dividend initiations and omissions. Since, initiations and omissions construe extreme dividend events, changes in dividends i. e. , increases and decreases and the information that they convey is also examined following DeAngelo, DeAngelo and Skinner (1992). There have been several changes in the tax regime in the last few years. The union budget 1997-98 made dividends taxable at t e hands of company paying them and not in the hands of investors receiving them. h Similarly there have been changes in the capital gains tax and exemption of dividend income under Section 80 L of the Income Tax Act 1961. All these changes have implications for the dividend policy of corporate firms. According to tax-preference or trade-off theory, favorable dividends tax should lead to higher payouts. Hence it is proposed to analyze the impact of tax regimes on dividend policies of corporate firms. 1. 2 Objectives 1. To study the trends in the dividend payment pattern of Indian corporate firms; 2. To analyze the impact of changes in dividend tax on the propensity to pay dividends; 3. To analyze the influence of firm characteristics such as profitability, growth and size on the dividend payment pattern; 4. To analyze the signaling hypothesis, specifically earnings information conveyed by dividend initiations and omissions; and 5. To analyze the influence of loss on dividend reductions. 3 In other words, the present study focuses on an analysis of dividend trends and attempts to analyze the determinants of these trends with the help of trade-off or tax-preference theory and signaling hypothesis. There are other important determinants of dividend behavior such as transactions costs, which we will not analyze, in the present study. In the next Section, we review the relevant literature, followed by a description of the database employed and methodology adopted in Section 3. Dividend trends are discussed in Section 4, and the analysis of characteristics of dividend payers is presented in Section 5. Sections 6 and 7 deal with the signaling hypothesis: first the case of dividend initiations and omissions and second dividend reductions. Section 8 summarizes the finding of study, points out limitations and concludes with directions for further research. 2. Review of Relevant Literature DeAngelo, DeAngelo and Skinner (1992) analyses the relationship between dividends and losses and the information conveyed by dividend changes about the earnings performance. They examine the dividend behaviour of 167 NYSE firms with at least one annual loss during 1980-95 and those of 440 firms with no losses during the same period, where all the firms had a consistent track record of ten or more years of positive earnings and dividends. They find that 50. 9% of 167 firms with at least one loss during 1980-95 reduced dividends, compared to 1% of 440 firms without losses. Their findings support signaling hypothesis in that dividend changes improve the ability to predict future earnings performance. Glen et al. (1995) study the dividend policy of firms in emerging markets. They find that firms in these markets have a target dividend payout rate, but less concerned with volatility in dividends over time. They also find that shareholders and governments exert a great deal of influence on dividend policy and observe that dividends have little signaling content in these markets. Benartzi, Michaely, Thaler (1997) analyzes the issue of whether dividend changes signal the future or the past. For a sample of 7186 dividend announcements made by NYSE or AMEX firms during the period 1979-91, they find a lagged and contemporaneous relation between dividend changes and earnings. Their analysis also shows that in the two years following dividend increases, earnings changes are unrelated to the sign and magnitude of dividend changes. Bernsterin (1998) expresses concern over the decline in payout over a period of time in the US market. He observes that given the ‘concocted’ earnings estimates provided by firms, the low dividend payout induces reinvestment risk and earnings risk for the investors. He asserts that â€Å"†¦ try calculating the historical correlation between payout ratios in year t and earnings growth over t + 5. The correlation coefficient is positive and statistically significant† 7. Fama and French (2001) analyze the issue of lower dividends paid by corporate firms over the period 1973-1999 and the factors responsible for the decline. In particular they analyze whether the lower dividends were the effect of changing firm characteristics or lower propensity to pay on the part of firms. They observe that proportion of companies paying dividend has dropped from a peak of 66. 5 percent in 1978 to 20. 8 percent in 1999. They attribute this decline to the changing characteristics of firms: â€Å"The decline in the incidence of dividend payers is in part due to an increasing tilt of publicly traded firms toward the characteristics – small size, low earnings, and high growth – of firms that typically have never paid dividends†8. Baker, Veit and Powell (2001) study the factors that have a bearing on dividend policy decisions of corporate firms traded on the Nasdaq. The tudy, based on a sample survey (1999) response of 188 firms out of a total of 630 firms that paid dividends in each quarter of calendar years 1996 and 1997, finds that the following four factors have a significant impact on the dividend decision: pattern of past dividends, stability 7 8 Bernstein (1998), pp. 1. Fama and French (2001), p. 79 4 of earnings, and the level of current and fut ure expected earnings. The study also finds statistically significant differences in the importance that managers attach to dividend policy in different industries such as financial versus non-financial firms. Ramacharran (2001) analyzes the variation in dividend yield for 21 emerging markets (including India) for the period 1992-99. His macroeconomic approach using country risk data finds evidence for pecking order hypothesis – lower dividends are paid when higher growth is expected. The study also finds that political risk factors have no significant impact on dividend payments of firms in emerging markets. Lee and Ryan (2002) analyze the dividend signaling-hypothesis and the issue of direction of causality between earnings and dividends – whether earnings cause dividends or vice versa. For a sample of 133 dividend initiations and 165 dividend omissions, they find that dividend payment is influenced by recent performance of earnings, and free cash flows. They also find evidence of positive (negative) earnings growth preceding dividend initiations (omissions). 2. 1 Previous Indian Studies Kevin (1992) analyzes the dividend distribution pattern of 650 non-financial companies which closed their accounts between September 1983 and August 1984 and net sales income of one crore rupees or more. He finds evidence for a sticky dividend policy and concludes that a change in profitability is of minor importance. Mahapatra and Sahu (1993) analyze the determinants of dividend policy using the models developed by Lintner (1956), Darling (1957) and Brittain (1966) for a sample of 90 companies for the period 1977-78 – 1988-89. They find that cash flow is a major determinant of dividend followed by net earnings. Further, their analysis shows that past dividend and not past earnings is a significant factor in influencing the dividend decision of firms. Bhat and Pandey (1994) study the managers’ perceptions of dividend decision for a sample of 425 Indian companies for the period 1986-87 to 1990-91. They find that on an average profit-making Indian companies have distributed about one-third of their net earnings and that the average dividend payout ratio is 43. 6 percent. They also find that the average dividend payout ratio is 54 percent for the sample of both profitmaking and loss-making companies and the average dividend rate is in the range of 14. 3 percent to 19. 2 percent. They also observe variation in dividend policy of different industries. Further, a survey of these 425 companies has been attempted. How ever, only 31 questionnaires have been received and of these they find 28 amenable for further analysis. Their analysis of the respondents shows that managers perceive current earnings as the most significant factor influencing their dividend decision followed by patterns of past dividends. They also find two other variables increasing equity base and expected future earnings to have significant influence. However, they find industry to have the least influence on the dividend, which has been contrary to the expectations. Mishra and Narender (1996) analyze the dividend policies of 39 state-owned enterprises (SoE) in India for the period 1984-85 to 1993-94. The find that earnings per share (EPS) is a major factor in determining the dividend payout of SoEs. Narasimhan and Asha (1997) discuss the impact of dividend tax on dividend policy of firms. They observe that the uniform tax rate of 10 percent on dividend as proposed by the Indian union budget 1997-98, alters the demand of investors in favor of high payouts rather than low payouts as the capital gains are taxed at 20 percent in the said period. Mohanty (1999) analyzes the dividend behavior of more than 200 firms for a period of over 15 years. He finds that in most bonus issue cases firms have either maintained the pre-bonus level or only decreased it marginally there by increasing the payout to shareholders. The study also finds that firms that declared bonus during 1982-1991 showed higher returns to their shareholders compared to firms which did not issue bonus shares but maintained a steady dividend growth. He finds evidence for a reversal of this trend in the 1992- 5 1996 period. He attributes such a reversal in trend to the changed strategy of multi-national corporations (MNCs) and their reluctance to issue bonus shares. Narasimhan and Vijayalakshmi (2002) analyze the influence of ownership structure on dividend payout of 186 manufacturing firms. Regression analysis shows that promoters’ holding as of September 2001 has no influence on average dividend payout for the period 1997-2001. 3. Database and Methodology 3. 1 Database Dividend payment pattern of all companies that are listed for trading on one of the two major exchanges namely National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) during the period 1989-1990 to 2000-2001 (we refer each year henceforth with the end year i. e. for 2000-2001 to 2001) are employed for analysis. The data has been sourced from Prowess database of the Centre for Monitoring Indian Economy (CMIE). For the purpose of this study, only final cash dividends are considered and stock repurchases and stock dividends are not considered. Unlike the firms in developed countries that pay quarterly dividends, Indian companies typically pay only one dividend during a year. A few firms do pay interim dividends, however, data regarding these are not readily accessible and it is extremely difficult to get such data for a reasonable number of years. Further, stock repurchases have been permitted only recently and only about a hundred companies have bought back their stocks so far. Hence, in the present study stock repurchases are not considered for analysis. Stock price data for the prior year of dividend announcement are also taken from the Prowess database. 3. 2 Methodology for Analysis of Trends To analyze the trends in dividend payment pattern, number of companies paying dividend as percentage of total firms, average dividend paid, dividend per share, payout ratio, and dividend yield are computed for the period 1990 to 2001. Dividend per share (DPS) is calculated as DPS j ,t = Dividend j ,t EQCap j ,t Where, DPSj,t refers to dividend per share for company j in year t; Dividend j,t refers to amount of dividend paid by company j in year t; and EQCap j,t refers to paid -up equity capital for firm j in year t. Equity capital is employed instead of the usual number of outstanding shares in the denominator as it facilitates comparison of rupee dividend paid per share by removing the impact of different face or par values. Dividend payout ratio (PR) is computed as PR jt = Dividend j , t PAT j ,t Where, PR j,t is dividend payout ratio, Dividend j,t refers to amount of dividend paid by company j in year t; and PATj,t refers to net profit or profit after tax for firm j in year t. Dividend Yield (DY) is computed as 6 DY jt = DPS j ,t Price j ,t ? 1 t Where, DYjt refers to dividend yield for firm j in year t, DPSjt refers to dividend per share for firm j in year , and Pricej,t-1 is closing price of previous year for firm j. Further, the entire sample is categorized into payers and non-payers to examine the trends in dividends across different subgroups. Payers are those firms that have paid dividend in the current year, where as nonpayers have not paid dividend in the current year. Payers are further classified into regular payers, initiators and current payers. Regular payers are those firms that have paid dividend regularly without ever skipping the payments. Initiators on the other hand refers to those firms with a maiden dividend, where as current payers are those firms who are neither regular payers nor initiators. Non-payers are further categorized into never paid, former payers and current non-payers. Never paid firms are those that have never paid even a single dividend, where as former payers are those firms which at some previous point had paid dividends. Current non-payers are those firms which are recently listed and that they are neither former-payers nor are in the never paid category in any of the previous years. 3. 3 Influence of Tax Regime Change: Test of Trade-off Theory Paired samples t-test has been employed to analyze the influence of changes in dividend tax during 199798 on the dividend propensity of Indian corporate firms. According to the tradeoff theory, corporate firms pay more dividends when the dividend tax is low compared to that of capital gains tax. The tax regime ushered in during 1997-98, whereby dividends are taxed at source at a uniform rate of 10%, has tilted the balance in favor of dividends. Changes in dividends are captured with the help of two measures – dividend per share and dividend payout percentage. For this purpose total dividend per share and average dividend payout percentage during the previous tax regime, i. e. the incidence of dividend tax is on the investors are compared with that of changed tax regime where dividend taxes are payable by corporate firms at a flat rate of 10%. The period 1994-95 to 1996-97 constitutes the first sub-period and the period 1998-99 to 2000-01 constitutes the second period. The following hypotheses are tested using paired samples t-test: (i) Null hypothesis of no differences between the total dividend per share between the two periods; and (ii) Null hypothesis of no difference between the average percentage payout between the two periods. Further, changes in the propensity of regular payers and changes in the payment pattern between 1996-97 and 1998-99 as a result of change in tax regime are also tested. 3. 4 Characteristics of Payers and Non-Payers Consistent with Fama and French, logit regression coefficients are estimated to analyze the influence of firm characteristics on the dividend payment pattern, for each year t during 1990-2001. The dependent variable assumes a value of 0 when the firm pays no dividend and assumes a value of 1 when pays a dividend. The explanatory variables are: Et/At is profitability measured as the ratio of aggregate earnings before interest to aggregate assets; dAt/At, is growth rate of assets; Vt/At is market-to-book ratio i. e. , the ratio of the aggregate market value to the aggregate book value of assets; and the NSEPt is the percent of firms with the same or lower market capitalization. Coefficients are computed for each of the year 7 and the aggregate coefficients and associated t values are analyzed to infer the influence o profitability, f growth and size. 3. Test of Signalling Hypothesis: Case of Dividend Initiations and Omissions For this part of the analysis, a firm is classified as initiator if it has paid dividend in the current year but has not paid dividends for the preceding 3 years. Similarly a firm is categorized as omission firm, if the firm has not currently paid dividend but has paid dividend in the preceding three years. To analyze signaling hypothesis, consistent with Healey and Palepu , earnings patterns of firms initiating and omitting dividend for 3 years before the year of event and 3 years after event are examined. To aggregate results across firms, earnings changes in these years are expressed as a percentage of the previous year’s closing stock price, PJ. The standardized change in earnings for firm j in year t, is defines as ? E j ,t = E j ,t ? E j ,t ? 1 Pj Where Ej,t are earnings per share before extraordinary items and discontinued operations9 for firm j in year t. The null hypotheses of average earnings changes are zero is tested with the help of Dunnett’s C (Post Hoc) test. Analysis pertaining to initiations and omissions only cover a particular sample of extreme events and excludes firms not having a dividend track record of less than 3 years. In order to cover other dividend events like dividend reductions and increases in the following we arrive at yet another sample. 3. 6 Test of Signaling Hypothesis: Case of Dividend Reductions To analyze the relationship between dividends and losses a sample is drawn with firms having consistent profitability and dividend track records during 1990 – 1995 and who have earnings and dividend information for the period 1996 – 2001. The importance of annual losses on dividend reductions and annual dividend omissions has been analyzed with the help of logit analysis. The dependent variable equals zero if a firm has maintained or increased its dividend per share and is equal to one if the firm announced a reduction in dividend per share. The loss dummy assumes a value of one if the firm reports a loss for the year under study and zero otherwise. The level of net income and changes in net income are standardized with the previous year’s net worth for each firm. For firms in loss sample, the initial loss year constitutes the event year where as for non-loss firms, the initial year of earnings decline constitutes the event year. Similarly to examine the influence of past and future levels of earnings logit analysis has been employed on the subset for event years 1997 and 1998. The dependent variable equals zero if a firm has maintained or increased its dividend per share and is equal to one if the firm announced a reduction in dividend per share. The explanatory variables are earnings in 1 year before the event (t-1), 2 years preceding the event (t-2), current earnings (t), earnings in the year following the event year (t+1), earnings in 2 years following the event (t+2). Similarly, mean difference in earnings over t 2 through t+2 years is also examined with the help of Dunnett’s C test. This analysis would be useful in determining whether dividend changes are impacted by contemporaneous or lagged or expected earnings performance. 9 In the Indian context an approximate value for this is derived from ‘other income’. 8 4. Trends in Dividends and Influence of Changes in Tax Regime Average profit after tax (PAT) has increased from Rs. 4. 68 crore in 1990 to Rs. 6. 11 crore in 2000 and Rs. 9. 36 crore in 2001 (Table 4. 1). However, there have been several fluctuations in average PAT reflecting the changes in Indian economy. In the early phases of economic reform, many firms had to restructure as the economy was opened up and structural adjustments were undertaken resulting in a reduction in PAT. The subsequent pick up in the mid -90s has seen an increase in average PAT. The late 1990s, which marked a significant decline in economic activity, have had their impact on PAT of firms. 4. 1 Average Dividend Paid Despite fluctuations in PAT, the average aggregate dividend payments have steadily increased from Rs. . 99 crore in 1990 to Rs. 2. 93 crore in 2000 and Rs. 4. 19 crore in 2001. Further, compared to PAT the dividend payments have exhibited a smooth trend implying that dividend smoothening is occurring in the Indian context (Figure 4. 1). Table 4. 1 Trend in Dividends and PAT During 1990-2001 Year Number of Firms 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Common Firms 1707 2184 2505 30 97 4020 5115 5600 5855 5980 6248 6225 4766 871 Average Dividend Rs. Crore 0. 99 0. 98 1. 11 1. 11 1. 27 1. 56 1. 85 2. 05 2. 26 2. 9 2. 93 4. 19 SD of Average SD of Dividend PAT PAT Rs. Crore Rs. Crore Rs. Crore 3. 92 4. 68 48. 45 3. 79 4. 05 37. 88 4. 54 4. 19 40. 45 4. 85 3. 06 46. 76 6. 19 4. 15 51. 41 8. 42 6. 96 57. 55 10. 80 7. 19 62. 92 13. 91 6. 38 65. 65 17. 18 5. 69 103. 52 22. 14 5. 09 88. 19 26. 46 6. 11 103. 54 44. 71 9. 36 134. 39 Number of firms paid dividend during the study period have shown an up trend till 1995 and have fallen subsequently (Appendix Figure 4. 1), where as the percentage of companies paying dividends has declined from 60. percent in 1990 to 32. 1 percent in 2001 (Table 4. 2 and Figure 4. 2). This is consistent with the trend observed in the US market (Fama and French 2001). The fact that percentage of companies paying dividends have declined whereas the average dividend paid has increased implies tha t companies which have been paying dividend have paid higher amounts in recent years. Total non-payers have steadily increased from 1990 to 2000 before declining slightly in 2001 (Appendix Table A4. 1 and Figures A4. 2 and A4. 3). Firms, which have never paid dividend, constituted a significant proportion through out the sample period – constituting more than 50% from 1991 to 2001 continuously. The number of firms, which at some previous time paid dividend, have increased overtime and reached almost 50% of non-payers in 2001. Figure 4. 1 9 Trend in Average Dividends, and PAT During 1990-2001 Average Dividend Average PAT 10 9 8 7 6 5 4 3 2 1 0 1990 1992 1994 1996 1998 2000 Rs. Crores Year Table 4. 2 Trend in Dividend Payments During 1990-2001 Year Paid Dividend No. 033 1272 1533 1823 2333 2775 2723 2386 2101 2007 1988 1531 % 60. 50 58. 20 61. 20 58. 90 58. 00 54. 30 48. 60 40. 80 35. 10 32. 10 31. 90 32. 10 Not Paid Dividend No. 674 912 972 1274 1687 2340 2877 3469 3879 4241 4237 3235 % 39. 50 41. 80 38. 80 41. 10 42. 00 45. 70 51. 40 59. 20 64. 90 67. 90 68. 10 67. 90 Total Number of Firms 1707 2184 2505 3097 4020 5115 5600 5855 5980 6248 6225 4766 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Total number of firms paying dividend has increased up to 1995 and has registered sustained decline there after (Table 4. , Appendix Figures A4. 4 and A4. 5). Mirroring these trends firms, which have paid dividends regularly, peaked in 1995 and recorded declines thereafter. Initiators have shown a steady decline from 1991 and have fallen to 5% in 2001. Average dividend paid by payers has increased steadily from Rs. 1. 69 crore in 1991 to Rs. 9. 16 crore in 2000 and Rs. 13. 05 crore in 2001 (Figure 4. 3, Appendix Table A4. 2). Regular payers are more in number and have paid higher average dividend compared to that of current payers and initiators (Appendix Figures A4. 6 and A4. 7). Current payers have paid higher dividend compared to initiators except in the year 2001. The number of initiators have increased up to the year 1995 and have shown a decline thereafter, where as current payers have steadily increased in number up to 2000. 10 Figure 4. 2 Dividend Behaviour of Indian Corporate Firms During 1990 – 2001 (in %) 80% 70% 60% % Non-Payers % Payers % of Firms 50% 40% 30% 20% 10% 0% 1990 1992 1994 1996 1998 2000 Year Figure 4. 3 Comparision of Average Dividend Paid During 1991 2001 by Payer Group Initiator Current Payers Regular Payers Total Payers 20 15 10 5 0 Rs. Crore 1991 1993 1995 1997 1999 2001 Year A comparison of index and non-index firms shows that the former group of companies on average has paid more dividend than the latter group (Table A4. 3 and A4. 4). Similarly, it is observed that companies, which constitute popular market indices such as Sensex and Nifty paid more dividends compared to companies in the broad market indices such as BSE 100, CNX Mid-Cap, BSE 200, CNX 500, and BSE 500. These observations are on the expected lines as higher dividend payment is one of the important criteria for inclusion of stocks into indices. A study of number of companies paying dividend also reveals that a significantly larger proportion of index firms have paid dividend compared to non-index firms. 29 out of 30 Sensex firms and 49 out of 50 Nifty firms have paid dividend in 2001, the exception being Tata Engineering and Locomotive Company Ltd. (TELCO). Analysis of industry-wise average dividend paid shows that in the early 1990s, firms in the diversified industry have paid more dividends followed by mining firms and electricity firms (Table 4. 3). However, by the end of 2000 and 2001 firms in the electricity industry have paid more dividend followed by mining and diversified companies. It has also been observed that textile companies have continued to pay low amounts on an average throughout the sample period where as firms in the financial services industry have improved their average dividend payments over the sample period. The recent h growth firms in the computer igh 11 hardware and software segments, which are part of the machinery industry, have generally shown lower dividend payments. In sum, the number of firms paying dividend during the study period have shown an up trend till 1995 and have fallen subsequently. Further, compared to PAT the dividend payments have exhibited a smooth trend implying that dividend smoothening is occurring in the Indian context. Regular payers are more in number and have paid higher average dividend compared to that of current payers and initiators. Of the nonpayers, former payers are growing in numbers. Index firms appear to pay higher dividends compared to that of non-index firms. Further, smaller indices appear to have higher average dividend compared t that of o larger indices. Industry trends indicate that firms in the electricity, mining and diversified industries have paid more dividend where as textile companies have paid less dividends. Firms in the machinery industry which includes computer hardware and software segments have shown lower dividends. Table 4. 3 INDUSTRY Average Dividend Paid During 1990-2001 – Industry-wise (in Rs. Crore) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1. 09 3. 56 1. 28 . 67 . 88 . 70 . 80 2. 57 . 39 . 50 1. 02 . 48 1. 25 . 96 3. 88 1. 14 1. 39 . 97 . 65 . 90 2. 79 . 51 . 62 . 76 . 47 1. 17 1. 05 4. 24 1. 19 1. 47 . 98 . 72 1. 37 2. 97 . 72 . 70 . 86 . 47 1. 0 . 97 5. 11 2. 26 1. 38 . 89 . 73 1. 36 3. 57 . 62 . 64 . 92 . 53 1. 06 1. 08 6. 14 5. 85 1. 49 . 94 . 83 1. 72 2. 87 . 73 . 63 1. 01 . 72 1. 39 1. 38 1. 57 1. 69 1. 92 7. 72 10. 13 10. 99 12. 86 9. 54 13. 08 18. 31 17. 37 2. 10 2. 46 2. 72 3. 16 1. 02 . 80 . 90 1. 12 . 99 1. 11 1. 13 1. 20 2. 20 2. 39 2. 14 1. 80 2. 94 8. 87 17. 44 22. 23 . 70 . 75 . 57 . 35 . 85 1. 18 1. 00 . 86 1. 07 1. 18 1. 23 1. 34 . 86 . 82 . 58 . 51 2. 02 2. 83 3. 58 3. 18 1. 68 17. 17 26. 33 3. 20 1. 13 1. 34 1. 40 21. 99 . 56 . 90 1. 34 . 48 2. 95 2. 41 22. 76 27. 24 4. 25 1. 34 1. 58 1. 72 26. 31 . 58 1. 12 1. 42 . 56 3. 44 2001 Firms 2. 46 29. 55 48. 7 5. 29 1. 89 2. 11 3. 08 35. 36 1. 05 1. 51 4. 07 . 56 3. 03 1138 184 58 1097 745 1065 555 81 324 296 1264 750 225 Chemicals and Plastics Diversified Electricity Financial Services Food and Beverages Machinery Metals and Metal Product Mining Misc. Manufacturing Non-Metallic Mineral Pro Other Services Textiles Transport Equipment 4. 2 Dividend Per Share Average dividend per share (DPS) has increased from 14 paisa in 1990 to 26 paisa in 2000 and 15 paisa in 2001 (Table 4. 4, Figure 4. 4). An analysis of distribution of firms shows that 39 percent have paid nil DPS in 1990 and the percentage has increased to 67. 7 in 2001 (Table 4. ). Percentage of firms in the average class i. e. , DPS in the range of Rs. 0 to Rs. 0. 25 have declined from a high of 45. 9 in 1990 to 18. 5 in 2001. This implies that the increased average DPS over the latter period has mainly been due to a few firms paying larger DPS. Firms in chemicals and plastics industry have steadily improved their DPS from 14 paisa in 1990 to 27 paisa in 2000 and 25 paisa in 2001 (Table 4. 6). Where as textiles firms have shown a decline in DPS from 13 paisa in 1990 to 6 paisa in 2001. Machinery firms have paid a steady 12 to 14 paisa except for the years 1996 and 1997 when they paid marginally more. An analysis of index and non-index firms DPS shows that index firms on an average paid more DPS than non-index firms (Table A4. 14). Similarly, narrow indices have high average DPS than broad indices. 12 Table 4. 4 Average Dividend Per Share (DPS) During 1990-2001 (in Rs. ) Year Number Minimum Maximum of Firms DPS DPS 1990 1694 0 12. 71 1991 2153 0 10. 58 1992 2468 0 15. 58 1993 3028 0 51. 2 1994 3953 0 57. 5 1995 5032 0 135. 33 1996 5536 0 174. 67 1997 5801 0 222 1998 5911 0 350. 33 1999 6176 0 249. 75 2000 6167 0 266. 38 2001 4734 0 61. 5 Common 866 Firms10 Average DPS 0. 1406 0. 1385 0. 1427 0. 1514 0. 1582 0. 803 0. 2158 0. 198 0. 2337 0. 2544 0. 2571 0. 1538 Std. Deviation 0. 3455 0. 3009 0. 3568 1. 0025 1. 2983 2. 3543 3. 3243 3. 4834 5. 8833 4. 8938 4. 4156 1. 2899 Average DPS (1% trimmed) by all payers have increased from 21 paisa in 1991 to 31 paisa in 2000 and 29 paisa in 2001 (Figure 4. 5). Of the payers, regular payers have consistently paid more dividend per share compar ed to other payers. Similarly initiators have always paid lower dividend per share compared to current payers. Figure 4. 4 Average Dividend Per Share (DPS) During 1990-2001 Average DPS (in Rs. ) Average DPS 0. 30 0. 25 0. 20 0. 15 0. 10 0. 05 0. 0 1990 1992 1994 1996 1998 2000 Year An analysis of recurrence of dividend per share group shows that two firms have consistently paid dividend in the range of 25 to 50 paisa per share for all the 12 years, where as 18 firms have paid up to 25 paisa (Appendix Table A4. 6 and A4. 7). An analysis of dividend reductions by firms shows that only five companies namely Mahindra Sintered Products Ltd, Otis Elevator Co. (India), Bharat Electronics, Amritlal Chemaux, and Carborundum Universal have consistently paid higher dividend per share out of a 330 firms that paid dividends in all years of the sample period (Appendix Table A4. ). 43 firms registered a single instance of dividend per share reduction, where as 68 firms lowered twice, 82 firms lowe red thrice etc. On the whole average DPS has shown a steady growth except in the year 2001. Regular payers have consistently paid more dividend per share compared to other payers, where as initiators have always paid 5 common firms are lost on account of missing information on number of outstanding stocks and hence there is difference in the number of common firms from that of Table 4. 1. 10 13 lower dividend per share. Analysis also shows that only a few firms have consistently paid same levels of dividend. Index firms on an average paid more DPS than non-index firms. Similarly, narrow indices have high average DPS than broad indices (Appendix table A4. 8). Firms in chemicals and plastics industry have steadily improved their DPS, where as textiles firms have shown a decline in the study period. Machinery firms have paid a steady DPS. Figure 4. 5 1% Trimmed Dividend Per Share by Payer Type Current Payers Initiators Regular Payers Total 0. 35 0. 3 DPS (in Rs. ) 0. 25 0. 2 0. 15 0. 1 0. 05 1991 1993 1995 1997 1999 2001 Year Table 4. 5 Distribution of Firms in terms of Dividend Per Share During 1990 – 2001 DPS Rs. Rs. 0 – 0. 25 Rs. 0. 25 – 0. 50 Rs. 0. 50 – 0. 75 Rs. 0. 75 – 1 Rs. 1 – 2 Rs. 2 – 5 > Rs. 5 Percentage of Companies in Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 39 41 37. 9 39. 9 41. 1 44. 9 50. 8 58. 9 64. 5 67. 5 67. 8 67. 7 45. 9 43. 1 46. 2 46. 9 45 42. 3 35. 8 27. 5 22. 2 19. 5 18. 6 18. 5 13. 5 13. 7 13 . 7 11. 2 12. 1 10. 6 10. 4 9. 8 8. 7 7. 6 7. 4 7. 8 0. 9 1. 3 1. 4 0. 9 0. 7 1. 1 1. 5 2. 3 2. 8 2. 5 2. 6 2. 7 0. 4 0. 5 0. 4 0. 7 0. 8 0. 4 0. 6 0. 6 0. 6 1. 1 1. 2 1. 3 0. 2 0. 3 0. 3 0. 2 0. 2 0. 3 0. 4 0. 6 1 1. 1 1. 4 1. 4 0. 1 0. 1 0 0. 1 0. 1 0. 2 0. 2 0. 1 0. 0. 3 0. 6 0. 4 0. 1 0 0 0. 2 0. 1 0. 1 0. 2 0. 2 0. 2 0. 3 0. 4 0. 3 Table 4. 6 Industry-wise Dividend Per Share (DPS) During 1990-2001 (in Rs. ) INDUSTRY Chemicals and Plastics Diversified Electricity Financial Services Food and Beverages Machineray Metals and Metal Product Mining Misc. Manufacturing Non-Metallic Mineral Pro Other Services Textiles Transport Equipment 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 FIRMS . 14 . 15 . 14 . 12 . 17 . 15 . 12 . 17 . 17 . 18 . 27 . 25 1138 . 19 . 21 . 26 . 20 . 20 . 19 . 21 . 22 . 21 . 22 . 27 . 21 184 . 13 . 10 . 11 . 11 . 11 . 10 . 12 . 9 . 10 . 10 . 13 . 10 58 . 08 . 11 . 13 . 34 . 24 . 21 . 28 . 12 . 15 . 14 . 19 . 18 1097 . 20 . 20 . 18 . 23 . 31 . 47 . 4 9 . 58 . 85 . 21 . 16 . 13 745 . 12 . 13 . 14 . 14 . 13 . 13 . 17 . 19 . 12 . 14 . 14 . 14 1065 . 13 . 11 . 11 . 09 . 10 . 10 . 12 . 09 . 07 . 06 . 07 . 07 555 . 05 . 07 . 06 . 07 . 09 . 06 . 07 . 08 . 13 . 10 . 11 . 09 81 . 12 . 12 . 14 . 10 . 11 . 10 . 10 . 15 . 06 . 16 . 21 . 30 324 . 10 . 11 . 11 . 09 . 09 . 09 . 10 . 08 . 08 . 07 . 09 . 09 296 . 17 . 15 . 17 . 15 . 13 . 24 . 38 . 28 . 42 . 88 . 73 . 12 1264 . 13 . 14 . 13 . 11 . 12 . 09 . 08 . 06 . 06 . 05 . 07 . 06 750 . 2 . 12 . 12 . 12 . 13 . 13 . 15 . 18 . 16 . 15 . 21 . 17 225 14 4. 3 Dividend Payout Ratio An analysis of average percentage dividend payout (PR) during 1990 – 2001 shows a volatile trend (Table 4. 7 and Figure 4. 6). Percentage PR increased from 27. 39 in 1990 to 32. 95 in 1997 and then showed a declining trend till 2000 before reaching the peak average percentage PR of 40. 53 in 2001. However, 1% trimmed average percentage PR showed a more stable pattern of around 24 percent PR up to 1997 and then has shown a declining trend before finally reaching 16. 81 percent in 2001 (Appendix Table A4. ). Table 4. 7 Average Percentage Payout During 1990 – 2001 Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 No. of Average Std. Firms % Payout Deviation 1382 1714 2022 2533 3156 3770 4042 4258 4335 4503 4383 3387 27. 39 25. 19 27. 54 27. 98 28. 19 25. 88 27. 44 32. 95 31. 39 22. 82 21. 6 40. 53 37. 77 41. 04 48. 31 37. 83 61. 96 38. 06 88. 12 139. 85 453. 37 120. 19 67. 49 1196. 96 1% Trimmed Average % Payout 24. 98 23. 11 24. 25 25. 72 24. 92 23. 84 23. 99 23. 91 18. 64 16. 98 17. 47 16. 81 1% Trimmed No. of Firms 1369 1697 2002 2508 3125 3733 4002 4216 4292 4458 4340 3354 An analysis of distribution of firms by dividend payout percentage shows that as high as 26 percent of firms in 1990 and 56. 6 percent in 2001 have paid out nothing (Table 4. 8 and Appendix, Figure A4. 6). However, more than 10 percent firms have paid dividend in excess of 75 percent of their net profits. An analysis of dividend payout recurrence shows that very few firms have maintained the same payout for a longer period of time (Appendix Table A4. 10 and A4. 11). For instance, only one firm – Hindustan Lever Limited – has paid out a dividend in the range of 50 to 75% of its net profit for entire sample period. Similarly another firm – Maharashtra Scooters Limited – maintained a dividend payout in the range of 10 to 20% for 11 of the 12-year sample period. Similarly, Kinetic Engineering Ltd. , Lakshmi Machine Works Ltd. , and Dalmia Cement (Bharat) Ltd. have paid out in the range of 10 – 20% for 10 of the 12-year sample period. Figure 4. 6 Average % Payout During 1990-2001 Average % Payout 50 40 30 20 10 0 1990 1992 1994 1996 1998 2000 1% Trimmed Average % Payout Average Payout % Year 15 An analysis of industry-wise DPO shows a declining trend across all industries during the sample period (Table 4. ). Diversified firms, which have a DPO in excess of 25 percent in 1990, have less than 14 percent in 2001. Firms in metals and metal products industry have registered a high degree fall in DPO from 22. 84 percent in 1990 to 8. 74 percent in 2001. Table 4. 8 Distribution of Firms’ Payout Percentage During 1990 – 2001 Dividend Payout % 0 0 – 10 10 – 20 20 – 30 30 – 40 40 – 50 50 – 75 75 – 100 100 – 200 > 200 Firms % of Firms 1990 1991 26 6. 9 14. 5 16. 5 12. 6 8. 2 10. 1 3. 5 1. 2 0. 4 1382 1992 1993 28. 9 7. 2 11. 9 13. 5 12. 3 9. 5 10. 5 4. 6 1. 3 0. 4 2533 1994 26. 6 8 14. 3 15 12. 7. 7 10. 2 4. 5 0. 9 0. 3 3156 1995 26. 7 6. 6 15. 6 16. 7 12. 5 8. 7 8. 6 3. 4 0. 9 0. 3 3770 1996 33. 3 5. 5 13. 6 13. 7 10. 8 7. 3 8. 6 5. 4 1. 4 0. 4 4042 1997 1998 1999 2000 2001 45. 4 52. 8 57 55. 8 56. 6 3. 1 3. 4 3. 4 3. 8 3. 8 7. 9 7. 6 6. 7 6. 6 7. 6 10. 9 9. 8 8. 2 8. 9 7. 9 8. 5 7. 5 6. 9 6. 7 6. 9 6. 4 5. 4 5. 2 5. 4 4. 8 9. 1 7. 8 6. 7 6. 5 7. 1 5. 2 3. 2 3. 9 4. 2 3. 2 2. 1 1. 6 1. 3 1. 5 1. 5 1. 3 1 0. 7 0. 7 0. 7 4258 4335 4503 4383 3387 26. 5 25. 3 9. 3 9. 2 14. 1 13. 9 17. 2 16. 1 12. 6 13. 3 7. 1 8. 8 9 8. 9 2. 9 2. 7 0. 9 1. 4 0. 2 0. 4 1714 2022 Table 4. 9 Industry-wise Dividend Payout During 1990 – 2001 (in %) INDUSTRY Chemicals and Plastics Diversified Electricity Financial Services Food and Beverages Machineray Metals and Metal Product Mining Misc. Manufacturing Non-Metallic Mineral Pro Other Services Textiles Transport Equipment 1990 23. 92 25. 28 17. 98 23. 28 24. 47 23. 93 22. 84 10. 28 18. 10 19. 71 20. 01 16. 83 19. 31 1991 20. 38 20. 95 16. 21 27. 01 23. 15 20. 36 21. 47 7. 29 18. 08 17. 75 21. 15 15. 98 19. 96 1992 21. 51 22. 78 14. 15 28. 50 24. 19 22. 87 19. 86 12. 28 15. 69 16. 95 19. 25 17. 26 21. 61 1993 23. 38 25. 48 13. 37 32. 11 22. 4 23. 42 20. 65 9. 56 17. 18 16. 27 19. 84 20. 98 21. 29 1994 20. 14 22. 74 12. 48 29. 87 20. 40 23. 67 20. 92 14. 04 17. 87 14. 78 21. 15 20. 54 23. 26 1995 21. 88 23. 23 16. 98 27. 25 17. 01 22. 07 19. 76 12. 10 18. 91 14. 92 19. 60 19. 20 20. 99 1996 20. 53 21. 61 12. 70 31. 74 17. 23 20. 83 18. 82 16. 58 17. 81 13. 87 19. 34 17. 30 19. 69 1997 18. 37 23. 27 16. 32 29. 19 16. 14 19. 45 16. 78 14. 65 15. 55 13. 62 17. 43 13. 84 22. 46 1998 14. 76 19. 34 10. 42 16. 12 12. 73 16. 28 12. 56 11. 50 9. 84 10. 78 14. 00 11. 29 20. 96 1999 13. 84 17. 41 9. 35 14. 82 12. 67 15. 36 9. 37 9. 87 12. 8 9. 66 12. 27 7. 99 18. 74 2000 14. 18 17. 52 12. 68 16. 21 12. 80 15. 24 9. 16 11. 98 12. 59 8. 93 12. 85 9. 04 20. 18 2001 13. 71 13. 59 13. 08 14. 30 10. 22 15. 15 8. 74 11. 76 15. 09 11. 29 12. 54 8. 02 17. 29 Total payers have registered an increase in payout from 31. 25% in 1991 to a peak of 43. 02% in 1997 and finally paid out 37. 64% in 2001 (Figure 4. 7 and Appendix Table 4. 12). Of the payers, regular payers have consistently paid higher payout compared to that of current payers. Further, initiators have shown higher fluctuations in their payout compared to that of regular payers. In sum, average percentage PR showed a more stable pattern up to 1997 and then has shown a declining trend. Analysis of dividend payout recurrence shows that very few firms have maintained the same payout for a longer period of time. Industry-wise DPO shows a declining trend across all industries during the sample period. Of the payers, regular payers have consistently paid higher payout compared to that of current payers. Further, initiators have shown higher fluctuations in their payout compared to that of regular payers. 16 Figure 4. 7 1% Trimmed Dividend Payout % by Payer Type Current Payers Regular Payers 50 Initiators Total Payers % Payout 45 40 35 30 25 20 1991 1993 1995 1997 1999 2001 Year 4. 4 Dividend Yield Average dividend yield for all companies during the period 1991 to 2001 has declined from 1. 73% in 1991 to . 55 in 1993 before finally recovering to 1. 61 in 1998 and again falling marginally to 1. 24% in 2001 (Table 4. 10 and Figure 4. 8). On the whole the dividend yield is range bound in the region of 0. 5% to 1. 73%. The reason for the fall in 1993 could be due to high increases in market capitalizations of a number of stocks in the face or irregularities in the stock market in 1992. Analysis of dividend yield by type of payer shows that initiators have always paid higher levels of dividend yield compared to that of current payers and regular payers (Figure 4. 9, and Appendix Table A4. 23). Similarly current payers have paid higher dividend yield compared to that of regular payers. Dividend yields of initiators have declined from 6% in 1991 to 1. 51% in 1993 before recovering and reaching an all time high of 10% in 1998. Compared to this current payers yielded about 5% in 1992 before falling to 1. 81 in 1993 and have subsequently recovered and reached all time high of 8. 2% in 2000. On the other hand regular payers started with a yield of close to 5% but have fallen to a low of 1. 5 in 1993 before reaching an all time high of 7. 76% in 2000. Table 4. 10 1% Upper Trimmed Dividend Yield (%)During 1991 – 2001 Year Mean Median SD Firms 1991 1. 73 . 0 2. 74 1452 1992 1. 66 . 0 2. 57 1603 1993 0. 55 . 0 0. 94 1989 1994 1. 68 . 0 3. 02 2559 1995 1. 44 . 0 2. 85 3 481 1996 1. 01 . 0 1. 88 4214 1997 1. 46 . 0 2. 99 4864 1998 1. 61 . 0 3. 80 5049 1999 1. 44 . 0 3. 86 5235 2000 1. 43 . 0 3. 96 5182 2001 1. 24 . 0 3. 15 4097 Note: Median values are considered only up to 1 decimal. However, there are non-zero values. On the whole dividend yield of aggregate payers shows a significant increase from 1991 to 2001. 17 Average dividend yield has differed from industry to industry (Table 4. 11). Diversified firms, followed by firms in electricity, food and beverages and textiles industries paid higher dividend yields in 1991 while financial services and mining firms paid the lowest. By 2001 diversified firms and electricity continue to pay higher dividend yields where firms in transport industry have improved their dividend yields by 2001. However, food and beverages and textile firms recorded lowered their dividend yield by 2001, where as firms in financial services, and mining have improved their dividend yields. Figure 4. 8 1% Upper Trimmed Dividend Yield During 1991 2001 2. 0 1. 8 1. 6 1. 4 1. 2 1. 0 0. 8 0. 6 0. 4 0. 2 0. 0 1991 1993 1995 1997 1999 2001 Average (%) Year Figure 4. 9 1% Upper Trimmed Dividend Yield by Payer Type Current Payer 12 Initiator Regular Payer Total Average (%) 10 8 6 4 2 0 1991 1993 1995 1997 1999 2001 Year On the whole the dividend yield is range bound during the study period. Analysis of dividend yield by type of payer shows that initiators have always paid higher levels of dividend yield compared to that of current payers and regular payers. Diversified firms and firms in the electricity industry have paid higher dividend yields during the study period. 4. 5 Summary of Analysis of Dividend Trends The number of firms paying dividend during the study period has shown an up trend till 1995 and has fallen subsequently. Average DPS on the other hand has shown a steady growth e xcept for year 2001. Average percentage PR showed a more stable pattern up to 1997 and then has shown a declining trend. Dividend yield measure is range bound. 18 Analysis also shows that only a few firms have consistently paid same levels of dividend. Analysis of dividend payout recurrence shows that very few firms have maintained the same payout for a longer period of time. Of the payers, regular payers have consistently paid higher payout as well as higher average dividend compared to that of current payers. Iinitiators have always paid higher levels of dividend yield compared to that of current payers and regular payers. Further, narrower indices appear to have higher dividends compared to that of broader indices. Industry trends indicate that firms in the electricity, mining and diversified industries have paid higher dividends where as textile companies have paid less dividends. Firms in the machinery industry which includes computer hardware and software segments have shown lower dividends. Table 4. 11 Average Dividend Yield (%) Industry-Wise During 1991 – 2001 Industry Chemicals and Plastics Diversified Electricity Financial Services Food and Beverages Machinery Metals and Metal Product Mining Misc. Manufacturing Non-Metallic Mineral Products Other Services Textiles Transport Equipment 1991 1. 79 2. 97 2. 27 0. 2 2. 18 1. 66 1. 76 0. 11 1. 41 1. 4 1. 18 2. 06 1. 53 Average 1% Upper Trimmed Dividend Yield in Year 1992 1993 1994 1995 1996 1997 1998 1999 1. 92 0. 55 1. 68 1. 39 0. 99 1. 55 1. 91 1. 82 2. 49 0. 8 2. 64 1. 56 1. 3 2. 16 2. 44 2. 12 1. 31 0. 69 1. 49 1. 04 1. 14 1. 07 0. 93 0. 85 0. 9 0. 41 2. 28 1. 98 1. 45 1. 87 1. 29 1. 05 2. 06 0. 58 1. 4 0. 92 0. 7 1. 21 1. 63 1. 38 1. 55 0. 61 1. 8 1. 57 1. 07 1. 54 1. 87 1. 7 1. 81 0. 53 1. 62 1. 71 1. 15 1. 43 1. 33 1. 22 0. 05 0. 01 0. 02 0. 21 0. 52 0. 45 0. 56 1. 12 0. 98 0. 33 1. 51 1. 32 0. 89 1. 18 1. 35 1. 74 1. 55 0. 49 1. 15 1. 02 0. 86 1. 08 1. 36 1. 46 1. 37 0. 5 1. 33 1. 3 0. 81 1. 23 1. 33 0. 97 1. 8 0. 62 2. 08 1. 2 1 1. 41 1. 74 1. 48 1. 48 0. 55 1. 61 1. 36 1. 22 1. 97 2. 42 2. 24 2000 1. 66 2. 99 1. 47 1. 33 1. 12 1. 32 1. 29 0. 58 1. 34 1. 66 1. 05 1. 65 2. 76 2001 1. 35 2. 11 1. 99 1. 03 1. 06 1. 01 1. 2 0. 81 1. 29 1. 43 0. 98 1. 6 2. 04 4. 6 Changes in Tax Regime and Dividend Propensity Analysis of influence of change in tax regime on dividend propensity shows that total dividend per share has come down from an average of Rs. 0. 84 to Rs. 0. 71, where as average payout percentage has increased from 33. 33% to 51. 05% (Table 4. 12). Mimicking the trends for total firms, regular payers have registered lower DPS and higher payout percentage. As opposed to these changes over sub-periods of 3 years before and after the change in tax regime, one year changes show that DPS has more or less remained at the same level, where as payout percentage has come down from 1997 to 1999. However, paired samples t-test shows that these differences are not statistically significant, except in the case of payout percentage from 1997 to 1999 (Table 4. 13). In sum, it can be inferred from the present study that tax regime changes have not really influenced the dividend behavior of Indian corporate firms and that the tradeoff theory does not hold true in the Indian context. 9 Average Dividends Before and After the Tax Regime Change Variable Total DPS (in Total Firms Rs) Regular Payers Total DPS (in Rs. ) Immediate DPS (in Rs. ) Years Average Total Firms Payout % Average Regular Payers Payout % Immediate Payout % Years Sample After Before After Before 1999 1997 After Before After Before 1999 1997 Mean . 71 . 84 1. 55 1. 72 . 22 . 22 51. 05 33. 33 60. 53 38. 07 27. 78 35. 87 N 2597 2597 765 765 4848 4848 1217 1217 1000 1000 2987 2987 SE Correlation . 17 . 519 . 24 . 27 . 241 . 71 . 06 . 426 . 05 19. 19 . 015 1. 43 23. 35 . 008 1. 68 2. 65 . 072 2. 87 Sig. .000 . 000 . 000 . 610 . 795 . 00 Table 4. 12 Influence of Change in Tax Regime on Dividend Propensity: Paired Samples T-test Difference SE After – Before Total Firms -. 13 . 21 Total DPS Regular Payers -. 17 . 70 (in Rs. ) Immediate Years . 01 . 06 Total Firms 17. 72 19. 23 Average 22. 46 23. 39 Payout % Regular Payers Immediate Years -8. 09 3. 76 t -. 62 -. 24 . 11 . 92 . 96 -2. 15 df 2596 764 4847 1216 999 2986 Sig. .536 . 810 . 909 . 357 . 337 . 032 Table 4. 13 5. Characteristics of Dividend Payers and Non-Payers 5. 1 Profitability Payers on an average have more than twice the payoff on assets compared to that of non-payers (Table 5. 1). This finding is consistent with Fama and French (2001). Of the payers Initiators appear to have on an average higher payoff on assets compared to current payers and regular payers, though their payoffs on assets have shown considerable fluctuations. Current payers and regular payers have similar levels of payoff on assets. Of the non-payers, former payers appear to have higher payoff on assets compared to firms, which never paid dividends. Never paid in turn appears to higher payoff on assets compared to current non-payers. An analysis of EPS of payers and non-payers shows that the former have on an average higher EPS compared to the latter. The difference in magnitude is also quite substantial compared to that of payoff on assets. Of the payers, regular payers have consistently higher EPS compared to that of the other two groups of payers. EPS of current payers and initiators has shown considerable fluctuations over the sample period. Initiators have higher average EPS in the early part of 1990s and last few years of 1990s, where as in the intervening years their EPS has shown a decline. Current payers on the other hand shown an opposite trend compared to that of initiators. All the non-payer groups have shown considerable fluctuations in EPS during the sample period and on average registered a decline in EPS from 1990 to 2001. An analysis of common stock earnings to book equity 20 shows that on an average payers have dominated non-payers as the former firms registered 24% in 1991 and 15% in 2001 to 4% and –6% by the latter in the corresponding years. Of the payers, initiators have higher common stock earnings to book equity compared to that of regular payers and current payers. Regular payers and current payers have similar equity earnings to book equity. However there is a gradual decline in earnings to book equity from 1991 to 2001. Of the non-payer firms, never paid firms appear to have higher equity earnings to book equity compared to current non-payers and former payers. The difference between payers and non-payers is larger in terms of stock earnings to book equity compared to payoff on firm’s assets. These findings are consistent with Fama and French. To sum up it can be concluded that profitability has positive influence on the dividend payment of a corporate firm. Dividend payers are more profitable compared to non-payers. Further, corporate firms in general and non-dividend payers in particular have become less profitable. 5. 2 Growth or Investment Opportunities An analysis of growth of assets shows that payers on an average have higher growth compared to that of non-payers. Payers have grown at percentages of 29. 03 in 1991, 23. 69 in 2000 and 10. 82 in 2001 compared to 18. 65, 4. 12 and 1. 86 in the corresponding years for non-payers. Of the payers initiators appear to have higher growth percentage compared to that of regular payers. Initiators have grown at percentages of 29. 87 in 1991, 49. 13 in 2000 and 57. 54 in 2001 compared to 28. 2, 23. 59 and 6. 78 in the corresponding years for regular payers. Regular payers in turn appear to have higher growth compared to that of current payers. Of the non-payers, never paid have on an average lower growth in assets compared to former payers and current payers. These findings are not consistent with Fama and French where they find never paid firms to have higher growth in assets compared to that of other non-payer and payer groups. Similar trends are observed with regard to growth opportunities as measured by R&D investment to total assets. Payers appear to have higher growth opportunities compared to non-payers. Of the payers, regular payers have higher growth opportunities compared to initiators and current payers. Of the non-payers, never paid appears to have lower growth opportunities compared to current non-payers. However the percentage growth opportunities for payers as well as for non-payers are considerably low as the payers on an average have 0. 02% in 1991 and 0. 27% in 2001 compared to 0. 003% and 0. 0447% in the corresponding years for non-payers. An analysis of aggregate market value to book value of assets shows that payers and non-payers do not differ significantly. However, there are differences with in the payer and non-payer groups. For instance, initiators appear to have higher market value to book value compared to regular and current payers, where as in non-payer group, former payers appear to be dominated by both never paid and current non-payers. On the whole in the Indian context higher growth and growth opportunities have not resulted in lower dividend payments by corporate firms. This finding contradicts the findings of Fama and French, whereby they contend that growth opportunities are an important reason for reduced dividend payments by firms. . 3 Size Dividend payers appear to be much larger in size compared to that of non-payers. This observation is consistent with Fama and French (2001). Average size as measured by assets of payers averaged Rs. 104. 4 crore in 1991 and Rs. 1413. 43 in 2001 compared to that of Rs. 56. 92 and Rs. 181. 20 in the corresponding years for non-payers. 21 Of the payers, regular payers have higher assets compared to that of current payers. Current payers in turn have higher assets compared to initiators. Similarly, regular payers have grown an average asset base of Rs. 112 crore in 1991 to Rs. 711 crore in 2001 compared to Rs. 54. 71 crore and Rs. 581. 48 core for initiators and Rs. 47. 11 crore in 1992 and Rs. 654. 9 crore for current payers. Of the non-payers, former payers appear to have higher assets compared to current never paid who in turn have higher asset base compared to current non-payers. Asset base of former payers has grown from Rs. 90. 14 crore in 1991 to Rs. 239. 2 crore in 2001 while in the corresponding period never paid have grown from Rs. 51. 69 crore to Rs. 80. 57 crore. However, current non-payers have registered a decline in their asset base from Rs. 3. 5 crore to Rs. 18. 73 crore during the same period. An analysis of indebtedness of firms s hows that non-payers appear to have higher levels of long-term borrowings to assets compared to that of payers. Of the non-payers, never paid appears to have higher longterm borrowings to assets compared to former payers, who in turn appear to have higher levels compared to current non-payers. Of the payers, regular payers appear to have higher long-term borrowings to assets compared to current payers. Current payers in turn have higher levels compared to initiators. On the whole, the size of assets of firms have gone up during the period 1990 – 2001 and that increased assets seems to have been financed through long-term borrowing implying pecking order of preference for funds. Table 5. 1 Characteristics of Dividend Payers and Non-Payers Year 1991 1992 1993 Average % Payoff on Assets Current Payers 11. 20 12. 23 Initiators 9. 79 15. 15 12. 57 Regular Payers 11. 69 12. 03 12. 00 Total Payers 11. 44 12. 32 12. 07 Current Non-Payers 6. 58 5. 16 3. 69 Former Payers 10. 24 7. 41 6. 23 Never Paid 4. 44 6. 71 5. 29 Total Non-Payers 5. 49 6. 68 5. 29 Average 1% Trimmed EPS Current Payers 3. 0 4. 83 Initiators 7. 05 7. 47 5. 49 Regular Payers 14. 11 12. 79 9. 07 Total Payers 13. 20 11. 97 8. 46 Current Non-Payers -1. 61 -1. 18 -0. 49 Former Payers 0. 71 -2. 72 -3. 45 Never Paid 0. 07 1. 41 -0. 88 Total Non-Payers 0. 04 0. 49 -1. 41 Average Common Stock Earnings to Book Equity % Current Payers 21 18 Initiators 29 39 27 Regular Payers 22 20 19 Total Payers 24 24 21 Current Non-Payers -15 -7 -41 Former Payers 8 -27 58 Never Paid 14 23 47 Total Non-Payers 4 13 23 Average % Growth (Assets) Current Payers 46. 25 27. 29 Initiators 29. 87 92. 24 66. 77 Regular Payers 28. 92 62. 44 32. 20 Total Payers 29. 03 63. 66 33. 0 Current Non-Payers 16. 13 2. 34 26. 55 1994 12. 67 15. 19 12. 24 12. 58 3. 16 5. 37 4. 91 4. 79 7. 30 4. 53 9. 37 8. 67 -0. 35 -1. 64 -0. 62 -0. 81 23 32 21 24 13 72 14 21 27. 95 50. 41 36. 31 36. 17 46. 48 1995 13. 99 13. 66 12. 21 12. 56 1. 99 5. 94 5. 73 5. 41 6. 95 3. 98 8. 90 8. 15 0. 28 0. 51 0. 59 0. 54 20 26 22 23 4 -65 10 -3 1996 12. 27 11. 25 12. 02 11. 99 3. 67 9. 06 3. 89 5. 61