Wednesday, June 3, 2020
Separation of Powers in Australia - Free Essay Example
1. Explain the Doctrine of the Separation of Powers and how it operates in Australia. (350 words) The doctrine of the separation of powers is a political system used in Australia, where the institutions of government are divided into three main branches. These include the executive, legislative, and judicial(Greenfeld, 2012). The legislature includes the parliament that is responsible of making the laws of the country. The executive includes the ministries that are responsible of putting the laws made by the legislature into operation. The judiciary, which made up of the courts, is responsible of giving interpretation to the laws. The doctrine of separation of powers is usually said to be a cornerstone to fair governance.in Australia, this doctrine is puts together the uncomplicated democratic concepts that are part of the Westminster system, the version of power separation of United States, and the responsible government doctrine. Separation of powers has been a highly complicated issue in Australia due to the fact that it has not been totally described where the ultimate power lies within the political system of Australia. It has been difficult to argue out whether there is an overlap between the different branches of the doctrine of separation of power in Australia, although between these different branches, there is a visible common ground. In Victorian Stevedoring General Contracting Co Pty Ltd Meakes v Dignan, the high court ruled that it was not practical to have a division that is strict between the executive and the legislature; hence re-affirming this to be outlined in the constitution(Carney, 2000).Little distinction exists between the Australian legislature and executive as seen in the above case.Members of the executive of Australia are actually members of the Parliament. The Governor-general is responsible of appointing the executive and judge of the high court, yet he is part of the Parliament(Greenfeld, 2012). From the Australian constitution, section 64 provides that the members of the executive who are federal ministers must be part of the parliament(Carney, 2000). This establishes a clear connection between the legislature and the executive, hence eliminating the total separation of the e xecutive and legislature as seen in the American system. TheAustraliansystem of separation of powers stipulates thatthe political branches are not supposed to interrupt judicial activities. 2. Is there a true separation of powers between the institutions of government in Australia? (350 words) The separation of powers phenomenon between the Australian institutions of government is not clear. There is no true separation between the executive and legislature. This means that there is no true separation between the institutions of government. This is evident with the fact that the members of the executive must be members of the Parliament. On the other hand, the federal judiciary of Australia has strictly protected its independence from the legislature and the executive. This means that in the case of the judiciary, there is a true separation with the other branches of government.New South Wales v Commonwealth Wheat case in 1915, the high court came up with a decision that strict protection of the power of the judiciary was very fundamental in the constitution(Greenfeld, 2012). This protection was to be granted to commissions and tribunals that were formed by the legislature. This protection goes both ways where the political branches are not to interfere with the work of the judiciary, and at the same time, the judiciary should not interfere with the legislature and executive. Some people will argue their case that the fact that the judges of the high court are selected by the Governor-General, who is a member of the executive; there is still no true separation of the judiciary and the other two branches. This is because the leadership of the judiciary is totally affected by the executive that nominated the judges, and at the same time, the executive member that selected the high court judges is part of the legislative. Where the power lies within the Australian system has been a controversial issue for a long while. The effect brought about by the stro ng party discipline has led to the executive dominating the legislative. There is a visible overlap of the legislative and executive branches in the above case hence there is no true separation between the two branches. Comparing the American phenomenon of separation of power and the Australian phenomenon, one may find that the Australian separation of power is not as strict as the American separation of power. In the American system, the legislative is totally different from the executive unlike in Australia. 3. Choose another country (either a common law or civil law jurisdiction) to explain how the Doctrine of the Separation of Powers operates in that other country compared to Australia. (800 words ) The doctrine of the separation of powers in the United States of America is quite different from the Australian case, hence my choice of comparison to the Australian doctrine.In America, the legislative, judicial and executive branches of government are very distinct from each other. This is to prevent the abuse of power, and hence the philosophy of separation of power was very crucial in the formulating of the constitution of United States(Hunter-Schulz, 2005). The separation of power that is administered in America is closely associated to checks and balances system. Regarding the American legislative power, the congress is the branch of government that has sole power to do legislation duties. the non-delegation doctrine does not allow the congress to give its responsibility of law making to any other branch of government. This is different from the Australian case where the law makers are part of the executive. The executive branch in the USA is conferred, with qualifications and exceptions in the president. Section 2 of the American Constitution states that the President is the Commander in chief of the Navy and the Army, with a responsibility of appointing people into office and making treaties on behalf of the nation(Spindler, 2000). The presi dent is also supposed to receive public Ministers and ambassadors with the Senateà ¢Ã¢â ¬Ã¢â ¢s consent, and also make sure that the laws of the nation are executed faithfully. This means the president is required by the constitution to enforce the laws personally, but through subordinates. The congress may terminate appointments done by the president and in addition, the president executes whatever that is given to him by congress(Spindler, 2000). From the above explanation, the American doctrine of separation of power is very clear between the executive that includes the president, and the legislature that includes the congress(Spindler, 2000). This is a completely different scenario in Australia where the constitution totally links the executive to the legislature. As seen in the American perspective, the executive is not part of the legislature as is the case in Australia. The duties of the two branches are completely distinct in the American phenomenon. In addition, there is a lot of control of power in the American scenario since the ultimate objective of each branch of government is to check the power of the other branches(Hunter-Schulz, 2005). Even the presidentà ¢Ã¢â ¬Ã¢â ¢s power is greatly checked by the congress since he is no supposed to do anything without the consent of the congress.in Australia, the political parties greatly determine the decisions of the executive since it is through parties that the executive members get into leadership. The power of the judicial branch of the American government is more or less similar to that of the Australian government. It has the power to interprete the law in addition to deciding cases. the power of the judiciary is completely differentiated from the rest of the branches just like in the case of the Australia(Hunter-Schulz, 2005). In America, the executive is responsible of appointing the judges of the judges but under the consent of the senate. This is quite similar to the Australian judic iary where the judges are also selected by the executive. A case where an overlap of government branches of legislature and judiciary is in legislative courts formed by the Congress. On the contrary, there is no overlap because the legislative courts do not have a responsibility of exercising the judicial power. The work of the legislative court is the adjudication of questions regarding public rights. It is clear that the American constitution has gone a long way in ensuring that one branch of the government does not delegate its duties to another branch of government as it may, at times, be the case of the legislative and executive branches of the Australian government. The big argument in the Australian separation of power regarding where power lies is not the case in the American phenomenon. Equality of the executive, judiciary, and the legislature is what the constitution of America stipulates. Although in some cases, for instance, at the time when the republican governme nt is in power, the legislature is usually dominates(Gerangelos, 2009). It is a shared view between America and Australia that historically, the judiciary has always been seen as the weakest branch as compared to the legislative and executive. The fact that the judges that work in the judiciary are selected by another branch, which is the executive, proves that the judiciary may be weaker than the other two branches(Greenfeld, 2012). It is safe to conclude that the doctrine of separation of powers in the Australian system is quite different from the American system due to the difference in the system of governance. The judiciary in both scenarios has its seclusion from the other two branches although at the end of the day it may be portrayed as the weakest of the three government branches. References Carney, G. (2000). Separation of Powers in the Westminster System. Australasian Study of Parliament Group, 1-8. Gerangelos, P. (2009). THE SEPARATION OF POWERS AND LEGISLATIVE INTERFERENCE IN JUDICIAL PROCESS. CONSTITUTIONAL PRINCIPLES AND LIMITATIONS, 862-865. Greenfeld, M. (2012). THE ASYMMETRY OF THE SEPARATION OF POWERS. The Western Australian Jurist, 233-245. Hunter-Schulz, T. (2005). Rule of law, separation of powers and judicial decision making in Australia. The National Legal Eagle, 1-6. Spindler, G. (2000). Separation of Powers: Doctrine and Practice. Retrieved May 6, 2014, from Parliament of New South Wales: https://www.parliament.nsw.gov.au/prod/parlment/publications.nsf/key/SeparationofPowers
Saturday, May 16, 2020
The Principles Of Reliability And Validity Essay - 928 Words
Introduction If you are looking for scientific proof, then validity and reliability are what you need. In the work by Xie, Huang (2014) they describe the following: The principles of reliability and validity are fundamental cornerstones of the scientific method. Reliability is defined as the extent to which a measure is repeated under ideal conditions. Validity refers to the degree to which a test measures what it purports to measure. Establishing good quality studies need both high reliability and high validity. (p.326). Both of these concepts are worthy of exploration, and understanding them is crucial for evaluating, designing, and performing scientific studies. Reliability Reliability is about consistency. For data to have reliability, it will need stability, internal reliability, and inter-observer reliability. Stability. If a measure does not fluctuate over time, it is considered to have stability. Data collected at one period of time and then collected again at a different period in time will not have a great deal of variability. Stability can be tested by administering a test at one point in time and then re-administering the same test under the same conditions. Internal Reliability Internal reliability. This refers to the scale that is used to measure data. If the scale is consistent, then it is said to have internal reliability. We need to be sure that whatever variation we are measuring is actually produced by the variables, not by theShow MoreRelatedExploring Reliability and Validity765 Words à |à 4 PagesExploring Reliability and Validity Lynetric Rivers Liberty University Abstract This paper will focus on the types of reliability and validity used in the Values and Motives Questionnaire. 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The data assembled goes to a panel of assessment when deciding the option that will best fit the interest of the population, or the experiment idea in question. The content of this paper will define, and describe the different types of reliability, and validity. In addition display examples of data collectionRead MoreEssay on validity reliability1475 Words à |à 6 Pagesï » ¿VALIDITY AND RELIABILITY For the statistical consultant working with social science researchers the estimation of reliability and validity is a task frequently encountered. Measurement issues differ in the social sciences in that they are related to the quantification of abstract, intangible and unobservable constructs. In many instances, then, the meaning of quantities is only inferred. Let us begin by a general description of the paradigm that we are dealing with. 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Future employee success was found, ââ¬Å"a meta-analysisââ¬â¢s low validity is largely due to four main problems with references and letters of recommendation: leniency, knowledge of the applicant, low reliability, and extraneous factors involved in writing and reading such lettersâ⬠(Aamodt, 2016, p. 161). A letter of recommendation has a great chance of developing into one predictor ofRead MoreIssues in Psychological Testing Worksheet831 Words à |à 4 Pagespsychological testing, which constitute ethical principles for the profession. The second source of ethical principles associated to testing is the American Psychological Associationââ¬â¢s (APA, 2002) Ethical Principles of Psychologists and Code of Conduct (Hogan, 2007). Competence is a very important ethical principle of psychological testing. Psychologist should establish competence in assessment concepts and methodology. The concepts include reliability, validity, norms, and test construction. TechnicalRead MoreSystematic Procedure To Collect Essential Data And These1345 Words à |à 6 PagesStandardization refers to proper item selection, high reliability and validity of the instrument to be used in collection of data. And second one is construction of a tool by researcher for present study, constructing of tool for the study needs lot of care and caution . Construction of tool is a time taking and expansive affair number of steps to be followed such as piloting of the pool of questions, difficulty value, difficulty index, validity and reliability has to observed, tested by researcher. Consultation
Wednesday, May 6, 2020
The Importance Of Management And The Success Of A Company
Evaluating the importance of management and integrity as essential elements to the success of a company Introduction When it comes to the coordination of activities of an or organization or a company in order to achieve its desired objectives, the importance of management should never be underestimated, management itself is a large and complex topic with all organizations having its goals and objective in which its management process will need to attain desired success for the company, using Global logistics management as an anchor point in understanding the importance of management for the success of a company, we need to understand that the world has become a globally linked environment, economic freedom has uncompromisingly lifted the barriers between countries. Evaluation In order to deal with the ever growing changes in competition in the market, the company must take into consideration the speed, efficiency, and other conditions in the operation of strategies, and in crossing these socio economic barriers management plays a really important role, in the deployment of strategic plan s and objectives to deal with each issue that rises from every and each one of these barriers, therefore the industry needs to pay attention to the vertical integrative relationship among upstream suppliers, midstream retailers, as well as downstream retail customers, the transformational process of the global industry, and the need of the logistics management system is graduallyShow MoreRelatedSQSM OM Starbucks1486 Words à |à 6 Pagesï » ¿Student Assignment Covering Form Course/Unit Information Course MBA-On line Unit No. Unit 11 Unit Name Strategic Quality and Systems Management Unit code H/602/2327 Batch E11-E41-SQSM1406 Instructor Information Name Dr. Indranil Bose Phone +971 55 9860258 Skype Email indranil@mywestford.com,indranil@westford.org.uk Assignment Information Full/ Part Assignment Part Assignment Date Assignment Issued 9-06-2014 Date Assignment Due Task-1: 24-06-2014 Student Information (To be filledRead MoreFunctions And Functions Of Management1113 Words à |à 5 PagesThere are four primary functions involving management, which are considered the very life line and itââ¬â¢s existent. These four functions are instrumental and detrimental to the success and longevity of any company. Without these vital staples, a company is doomed before it is birth, and they are planning, organizing, leading and controlling. However, there is another essential component to the functions of management, and it is the important of diversity. In this paper I will identify the detailedRead MoreImportance of Project Management1533 Words à |à 6 PagesProject Management Introduction Project management is one of the most important activities that companies develop. This is because their activity is divided into several projects in order to better manage their resources. This also allows them to improve their performance. In addition to this, companies use project management in order to increase the efficiency of their employees. By working in projects, employees can develop a series of skills that allow them to improve their work. ThereforeRead MoreMgt 498963 Words à |à 4 PagesStrategic Management and Process Paper The strategic management process is important to the success of any company. Throughout the following paragraphs, the paper will discuss the primary components of the strategic management process. The paper will indicate the importance of why a company should use the strategic management process. Finally, the paper will close with the discussion of the research that found regarding Apple describing the strategic management process that the company uses in itRead MoreThe Importance Of Management At Mcdonald s And Google Essay1600 Words à |à 7 PagesIn what ways are management of companies different or how are they similar to one another? And what is the importance of management in how a company runs nowadays? Many of us question about why knowing the history of management is important to Managers? According to (Samson et al, 2012, Page 53) ââ¬Å"A historical perspective provides a broader way of thinking; a way of searching for patterns and determining whether they recur across time periods.â⬠In the history of management, many trends have appearedRead MoreThe Value Of Good Management1664 Words à |à 7 Pagescompetition among companies is likely to get tougher. In the development of companies, good management play an important role in a company achieving success, which means making a correct decision in order to achieve a particular purpose, plan, organize, direct, operate and control process. The purpose of good management is efficiency and benefit. The key of management is people and the principle of management is to organization, organization s centre is people. The essence of good management is the collectionRead MoreStrategic Management: Crafting and Executing Strategy1252 Words à |à 5 Pagespurpose of this report is to present the importance of strategic planning for a business organization. The industry chosen for this report is airline industry and the company name is Asian Airlines. The report starts with a strong argument supporting why and how a strategic plan is important for an airline business and proceeds by discussing the mission and vision statement for Asian Airlines. The next section establishes five key objectives for the company encompassing operational, financial, andRead MoreStrategic Human Resource Management Case Study1167 Words à |à 5 PagesStrategic Human Resource Management In todayââ¬â¢s business world, the most powerful asset to a company and what deserves the most attention are their employees. Businesses strive for a high profitable environment by sustaining a competitive edge in the market that they operate. There are a lot of factors that drive a businessesââ¬â¢ success level, but the employees are by far the most vital resource to a companyââ¬â¢s well being. Research has shown that productivity and overall performance are related to theRead MoreThe Long Term Performance And Operational Success Of A Firm1691 Words à |à 7 Pagesbenefits of strategic management is one of the key theme of the chapter and it is important for the long-term performance and operational success of a firm. A firm must adapt to the changing market and technological environment is another major concept that is explained briefly in the chapter. Strategic management provides a clear sense of strategic vision for the firm, sharper focus on what is important, and an improved understanding of a rapidly changing environment. Importance of innovation is anotherRead MoreAction Adventures 21353 Words à |à 6 Pagesopportunities: o Identify the major issues and or opportunities that the company faces based on your analysis above. o Generate a hypothesis surrounding each issue and research questions to use for conducting analysis. o Identify the circumstances surrounding each issue; classify the circumstances; attribute the importance of each classification; and test the accuracy of the importance for each classification. Proposed Business Action Adventures; Mission, Vision
Tuesday, May 5, 2020
Essay on Psychological Profiling By Myassignmenthelp.com
Question: Write an essay on Psychological Profiling? Answer: Key concepts of psychological profiling: As per the David Canters Investigative Psychology (DCIP), the main assumptions are highlighted through the subsections as interpersonal coherence, time and place importance, criminal characteristics and criminal career. Going by the DCIP 1st assumption, a normal dealing of the victims by the criminals as with other persons in daily life prevents the identification of criminals through behavioral observation. Clues about personal life and residence of the offender are assumed through the time and place as per 2nd assumption (Canter and Alison, 2012). The 3rd assumption emphasizes on relating the crime and offender to let the difference identified to lead to a classification system. The FBI crime scene analysis identifies the organized, disorganized and mixed types of crime typologies based on differences. David Canter however, rejected it due to the characteristic of overlapping. The 4th assumption of DCIP is the criminal career of the offender based on which, the nature and types of behavioral pattern of the crime is assessed. The Circle theory on the other hand, holds the view of considering crimes to possess a pattern and not being random (Tedeschi, 2013). The Five-Factor model resolves the issue of overlapping by using its five factors of personality traits that helps in description of human personality. The acronym OCEAN (Openness to experience, Conscientiousness, Extraversion, Agreeableness and Neuroticism) can identify the factors (Chiaburu et al. 2011). Identification of criminals through psychological profiling: The theories as DCIP enable the conduction of psychological profiling that are helpful in developing profiles for rapists, murderers and other criminals to apprehend them. As per this theory, the characteristics of the crime are well observed and analyzed to identify the personality, behavior, geographic location and demographic identifications of the criminal. Gardner (2011) asserted that the quality of the data retrieved dictates the process of profiling. The psychological profiling refers to the sketching of the behavioral aspect of the suspected individual. In order to generate a profile, the process initiates with an extensive analysis of the nature of the concerned criminal act and comparing it to the previous similar criminal events. Performing an in-depth analysis of the actual crime scene helps in the identification of the significant facts and details indicating the various aspects of the prospective offender. Analysing the background and activities of the victim enables the identification of possible motives and connections for the crime. Alison and Rainbow (2011) supported it by stating that it assist in analysis of the prospective factors motivating the offender towards the criminal act. The profiling process concludes with the development of the descriptive factors for the offender based on the characteristics identified and compared to former cases. Identification and evaluation of behavioral patterns through profiling research: Based on the Canters Circle Theory of psychological profiling, the two major models describe the spatial behavior of the offender. The Marauder model and the Commuter model are 2 parts of this theory (Canter, 2011). The M-model stating the movement of an offender starting closer to home to the outer range of circle to the crime spot identifies the geographic descriptors to locate the offender, predicting the style of offence committed. The C-model on the other hand, stating that the offenders tend to travel from distant place to closer criminal spots related to their home base to commit the crime, thus identifying a distinct behavioral pattern of the offender. The circle theory uses the offenders previously identified crimes to predict the residential base of the offender. It constructs a circle for the criminals hypothetical range of crime (Van Daele and Vander Beken, 2011). It thus, identifies the relation between the residential base and criminal range of the criminals through the M-model and C-model of spatial behavior. Another theory DCIP, provide description and classification of the prime matters to consider in criminal profiling. It relates the criminals with their activities. With a consideration of the major factors, the theory relates the offender with the evidences found in the crime scene. The behavioral pattern of the criminal is assessed through the close and deep observation of the evidences at the crime scene. The removal of evidence in a planned way, or leaving of clues through evidences denotes the specific patterns of behavior of the offender (Youngs and Canter, 2012). Strengths and weaknesses of 2 psychological theories in terms of appropriateness and effectiveness relating to criminal profiling: David Canters Investigative Psychology theory is highly efficient in identifying the potential offenders based on their psychological profiling. The CAPPS (Computer Aided Passenger Prescreening System) of criminal profiling developed at American Airlines Flight 77 at the Dulles Airport was seen to be able to identify two of the terrorists attacking the pentagon. However, a major weakness of this theory is that due to the broadness of the profiling, several innocent individuals end up with questioning and detention uselessly thus wasting time and energy along with posing an honor risk to those people (Alison and Rainbow, 2011). It raises the ethical issues of detaining an innocent. This theory takes into account the probable consistency of an offender from one criminal act to another. The risk of changes in the criminals behavior over time is a major weakness that renders this theory less effective in the profiling process. Taking the Circle theory of criminal profiling, the home location of an offender is efficiently identified by the examination of the evidences at crime scene. With the occurrence of each crime in a series, the locating efficiency becomes more specific (Ainsworth, 2013). Through mapping of the crime locations, it helps in identifying the base of the offender. Although the theory is efficient in locating the serial criminals as rapists or murderers but it fails to locate the one time criminals efficiently due to lack of previous or future criminal acts. The theory faces restriction while applying in a rural area due to limited residential search in the implied 2 miles radius of its circle. It also suffers from a cloud of non-clearance regarding the labeling of the offenders (Mohler and Short, 2012). References Ainsworth, P. (2013).Offender Profiling Crime Analysis. Willan Alison, L., and Rainbow, L. (Eds.). (2011).Professionalizing offender profiling: Forensic and investigative psychology in practice. Taylor Francis. Canter, D. V. (2011). Resolving the offender profiling equations and the emergence of an investigative psychology.Current Directions in Psychological Science,20(1), 5-10. Canter, D., and Alison, L. (Eds.). (2012).Profiling in policy and practice(Vol. 2). Ashgate Publishing, Ltd Chiaburu, D. S., Oh, I. S., Berry, C. M., Li, N., and Gardner, R. G. (2011). The five-factor model of personality traits and organizational citizenship behaviors: a meta-analysis.Journal of Applied Psychology,96(6), 1140. Gardner, H. (2011).Frames of mind: The theory of multiple intelligences. Basic books. Mohler, G. O., and Short, M. B. (2012). Geographic profiling from kinetic models of criminal behavior.SIAM Journal on Applied Mathematics,72(1), 163-180. Tedeschi, J. T. (Ed.). (2013).Impression management theory and social psychological research. Academic Press Van Daele, S., and Vander Beken, T. (2011). Outbound offending: The journey to crime and crime sprees.Journal of environmental psychology,31(1), 70-78. Youngs, D., and Canter, D. V. (2012). Narrative roles in criminal action: An integrative framework for differentiating offenders.Legal and Criminological Psychology,17(2), 233-249.
Sunday, April 19, 2020
Wacc for Fiat Group free essay sample
The WACC is the weighted average cost of capital. It is a calculation of the firms cost of capital taking into account the relevant weight of equity and debt as a proportion of the total. The cost of equity or KE calculated using a risk free rate example German 5yr government bond, the firmââ¬â¢s beta and the return on the market. The firmââ¬â¢s beta is a calculation of the firms exposure to the market, a beta of less than 1 indicates that the firm is not as influenced by external factors as the average firm in that market. A beta greater than 1 indicates that the firm is more heavily exposed to market factors than the average firm in that market. The formula I will be using to calculate the cost of equity is the CAP-M formula and is as follows; KE = RF + B (RM ââ¬â RF) RF = Risk free rate, B = Firmââ¬â¢s Beta, RM = Return on the market The cost of debt or KD is calculated by finding the internal rate of return for all the firms bonds. We will write a custom essay sample on Wacc for Fiat Group or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page First the coupon on the bond is found for each of the remaining years until maturity, then we deduct tax, finally we choose test two discount factors and put our findings into the following formula; IRR = DCF1 + (DCF2 ââ¬â DCF1) * NPV1 ââ¬â 0 / NPV1 NPV2 Once we have found our KE and KD we must find the weights of both the equity and debt capital. Finally all of this information is entered into our WACC formula which is as follows where MV is is the market value of the company; WACC = (KE * MV of equity / MV of company) + (KD * MV of debt / MV of company) Cost of Debt I also enjoyed, whilst I found quiet difficult, the level of personal opinion that goes into a report like this. I was very interested in the different figures I found for Fiats beta, I chose a high beta of 1. 62 due to the fact that the motor industry is so volatile as seen by the effect of the recent economic crash on car sales. Also the sharp turn that the price oil can make has a large impact on the motor industry, much more so than the effect on other manufacturing industries as not only does Fiat use oil in the production of its products but its products also require it to function. I ran into a few difficulties at the start mainly when it came to the choosing of a company to research. At first I choose Ryanair but as Ryanair do not have any issued bonds I decided to look into another company at least for my first attempt of a report of this nature. The main thing I gained from doing this report was the ability to research a company, at first I found it very difficult and time consuming just trying to retrieve figures that I thought were right.
Wacc for Fiat Group free essay sample
The WACC is the weighted average cost of capital. It is a calculation of the firms cost of capital taking into account the relevant weight of equity and debt as a proportion of the total. The cost of equity or KE calculated using a risk free rate example German 5yr government bond, the firmââ¬â¢s beta and the return on the market. The firmââ¬â¢s beta is a calculation of the firms exposure to the market, a beta of less than 1 indicates that the firm is not as influenced by external factors as the average firm in that market. A beta greater than 1 indicates that the firm is more heavily exposed to market factors than the average firm in that market. The formula I will be using to calculate the cost of equity is the CAP-M formula and is as follows; KE = RF + B (RM ââ¬â RF) RF = Risk free rate, B = Firmââ¬â¢s Beta, RM = Return on the market The cost of debt or KD is calculated by finding the internal rate of return for all the firms bonds. We will write a custom essay sample on Wacc for Fiat Group or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page First the coupon on the bond is found for each of the remaining years until maturity, then we deduct tax, finally we choose test two discount factors and put our findings into the following formula; IRR = DCF1 + (DCF2 ââ¬â DCF1) * NPV1 ââ¬â 0 / NPV1 NPV2 Once we have found our KE and KD we must find the weights of both the equity and debt capital. Finally all of this information is entered into our WACC formula which is as follows where MV is is the market value of the company; WACC = (KE * MV of equity / MV of company) + (KD * MV of debt / MV of company) Cost of Debt I also enjoyed, whilst I found quiet difficult, the level of personal opinion that goes into a report like this. I was very interested in the different figures I found for Fiats beta, I chose a high beta of 1. 62 due to the fact that the motor industry is so volatile as seen by the effect of the recent economic crash on car sales. Also the sharp turn that the price oil can make has a large impact on the motor industry, much more so than the effect on other manufacturing industries as not only does Fiat use oil in the production of its products but its products also require it to function. I ran into a few difficulties at the start mainly when it came to the choosing of a company to research. At first I choose Ryanair but as Ryanair do not have any issued bonds I decided to look into another company at least for my first attempt of a report of this nature. The main thing I gained from doing this report was the ability to research a company, at first I found it very difficult and time consuming just trying to retrieve figures that I thought were right.
Wacc for Fiat Group free essay sample
The WACC is the weighted average cost of capital. It is a calculation of the firms cost of capital taking into account the relevant weight of equity and debt as a proportion of the total. The cost of equity or KE calculated using a risk free rate example German 5yr government bond, the firmââ¬â¢s beta and the return on the market. The firmââ¬â¢s beta is a calculation of the firms exposure to the market, a beta of less than 1 indicates that the firm is not as influenced by external factors as the average firm in that market. A beta greater than 1 indicates that the firm is more heavily exposed to market factors than the average firm in that market. The formula I will be using to calculate the cost of equity is the CAP-M formula and is as follows; KE = RF + B (RM ââ¬â RF) RF = Risk free rate, B = Firmââ¬â¢s Beta, RM = Return on the market The cost of debt or KD is calculated by finding the internal rate of return for all the firms bonds. We will write a custom essay sample on Wacc for Fiat Group or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page First the coupon on the bond is found for each of the remaining years until maturity, then we deduct tax, finally we choose test two discount factors and put our findings into the following formula; IRR = DCF1 + (DCF2 ââ¬â DCF1) * NPV1 ââ¬â 0 / NPV1 NPV2 Once we have found our KE and KD we must find the weights of both the equity and debt capital. Finally all of this information is entered into our WACC formula which is as follows where MV is is the market value of the company; WACC = (KE * MV of equity / MV of company) + (KD * MV of debt / MV of company) Cost of Debt I also enjoyed, whilst I found quiet difficult, the level of personal opinion that goes into a report like this. I was very interested in the different figures I found for Fiats beta, I chose a high beta of 1. 62 due to the fact that the motor industry is so volatile as seen by the effect of the recent economic crash on car sales. Also the sharp turn that the price oil can make has a large impact on the motor industry, much more so than the effect on other manufacturing industries as not only does Fiat use oil in the production of its products but its products also require it to function. I ran into a few difficulties at the start mainly when it came to the choosing of a company to research. At first I choose Ryanair but as Ryanair do not have any issued bonds I decided to look into another company at least for my first attempt of a report of this nature. The main thing I gained from doing this report was the ability to research a company, at first I found it very difficult and time consuming just trying to retrieve figures that I thought were right.
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