Sunday, February 16, 2020
And the winner is.... - the management theories and methods of Essay
And the winner is.... - the management theories and methods of employee-award-winning companies 2013 - Essay Example As a result, most organizations have shifted their focus from developing strategies to implementing sound human resource management practices. Motivation of employees has become a key aspect in the management of any organization and most organizations today develop employee motivation plans. Facebook, an American based social media company, has developed proper motivational package and this enabled the company to be awarded the ‘best company to work in’ award of 2013. In this paper, the emerging human resource practices will be discussed in relation to how it has changed business performance and employee motivation. While discussing the theories of management currently employed by the organizations, the paper will analyse the article ‘the best companies to work for in 2013’. Human resource management practices have changed from the previous notions that was money centred to a new one that is based solely on employee motivation and how the people are critical assets for the business (Lawler, 2003). Summary of article Facebook, one of the currently leading social media companies based in the united states adopted a human resource practice that is more people cantered. ... With the current cost of livings being overly high, the success and satisfaction of an employee depends on the package that the company offers at any given time. Companies should seek to motivate their employees through the development of flexible work schedules, provision of leaves and offs without any conditions attached and providing a cool work environment devoid of stressful occurrences (Lawler, 2003). Facebook understands these emerging principles of human resource management and has developed one of the best packages for its employees. The company offers one of the most attractive payment packages to its employee as compared to other companies that participated in the survey. As a company that understands the essence of adding value to the life of the employees, the company also offers other incentives and allowances to its employees. These include the provision of free transportation, provision of home and personal services like dry cleaning and other motivating incentives to parents working for the organization. Facebook seeks to develop a work environment where the employees can do what they love most, get paid favourably for their dream careers and enjoy every single moment of their time at the company (Nohria & Groysberg, 2008). Apart from Facebook that was above the park according to this report, McKinsey and Co also emerged as the second best company to work in, a feat that is attributed to its human resource management approaches. As a major consultant company with offices and subsidiary branches in different parts of the word, the company has strived to implement a recruitment program that seeks employees with great leadership abilities.
Monday, February 3, 2020
Capital Asset Pricing Model Research Paper Example | Topics and Well Written Essays - 1250 words
Capital Asset Pricing Model - Research Paper Example The average cost of capital in the S&P 500 is 10.2 percent. It can be said that the cost of capital of Nvidia is almost on par with S&P 500 companies. It is pertinent to note that risk free rate varies time to time depending upon the yield of government Treasury bill. Usually, it is found to give 3% in normal conditions and based on this treasury rate, the cost of equity can also be calculated using the same formulaRj = RF + ÃŽ ²j [RM - RF]It is assumed that difference between the expectation on rate of return for market portfolio and available risk-free rate of return, [RM - RF] factor is 7.0Then, Rj, the cost of equity = 3+ 1.54 [7]                                            = 13.78Based on this, the cost of capital of Nvidia is certainly higher than average cost of S&P 500 companies.Answer 3.The cost of equity of Chevron (CVX) can be calculated in the s imilar fashion. Beta of Chevron is 0.70 (Key Statistics 2)The cost of equity = 3+ 0.7 [7]  (Assuming risk free return of 3%)                             = 7.9The cost of equity is remarkably low in case of Chevron compared to the average cost of S&P 500 companies.It would be further interesting to find the cost of equity whose beta is 1.76 Wipro Ltd. (in NASDAQ known as WIP)The cost of equity of Wipro = 3 + 1.76 [7]  (Key Statistics 3)                                            = 15.32Thus, Wipro has higher cost of equity than Nvidia and Nvidia’s cost of equity is higher than Chevron. With rising beta the cost of equity also goes up. It can be described as a stock valuation model that takes into consideration dividends and their growth, discount ed to present value.... in NASDAQ known as WIP) The cost of equity of Wipro = 3 + 1.76 [7] (Key Statistics 3) = 15.32 Thus, Wipro has higher cost of equity than Nvidia and Nvidia’s cost of equity is higher than Chevron. With rising beta the cost of equity also goes up. Answer 4. Dividend Growth Model It can be described as a stock valuation model that takes into consideration dividends and their growth, discounted to present value. Under this model, the valuation depends on 1. The Current Dividend 2. The Growth of Dividend at constant rate 3. Required Rate of Return For more clarity, it will be worthwhile to have some real life situation. The company is paying dividend of $2 per year and it is growing at the constant average rate of 3% per year. The only variable component in this model is required rate of return, if it is assumed as 15% Then, value under this model can be given as, Value= Current Dividend / (Required Return - Dividend Growth) (Gordon Growth†¦2011) = 2 / (0.15 – 0.03) = 2 / 0.12 = 16.66 Above calculation tells that under the given assumptions, this stock at the price of $16.66 should yield average annual 15% rate of return. At this juncture, it will also be prudent to look at the required rate of return and its basis. The required rate or return is given as the risk free return (such as U.S Treasury bill gives) adding to the return required for taking the risk in investing the stock. Thus, required rate (RR) is given as RR = risk free return + ? (RM-RF) = 3+ 1.7 (10-3) {Beta for the industry under calculation is 1.70} = 15 That is how required rate of return was assumed as 15% (Dividend Growth†¦) Arbitrage Pricing Theory – APT This theory was propounded by Stephen Ross in 1976. This theory has more flexible assumptions to describe as and taken as an alternative to
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