High School and School Teachers Essay Example for Free

High School and School Teachers Essay Abstract The report underscores the importance of the skills that are most essential and associated with career and college readiness, [Paul Weeks] says. Since many secondary school teachers arent familiar with the skills that have been identified as the most essential to succeed in college, high school educators cover a breadth of skills. Postsecondary instructors would rather see more depth, not a broad range that are only an inch deep, asserts Weeks. For example, two students can pass algebra but have vastly different experiences and their knowledge can vary greatly. Colleges review class titles but rarely evaluate the essential skills mastered in the class. Now we know what skills lead to college and career readiness, suggests Weeks. And the more high school teachers are aware of those skills and can teach them, the better their graduates will perform in postsecondary education. Boone County schools also are collaborating with Northern Kentucky University to develop basic math programs. We want to make sure that every student is at that level of mastery. It drives everything we do, [Karen Cheser] says. To prepare students to be college ready, it requires conversations, transparency, and a willingness to put out data. It takes community-will and providing resources, she remarks. Publication Title The Hispanic Outlook in Higher Education Publisher The Hispanic Outlook in Higher Education Date 08/2013 Study Explores Why many High School Graduates Are not Ready for College by Gary M Stern Content Type Journal Article Abstract The report underscores the importance of the skills that are most essential and associated with career and college readiness, [Paul Weeks] says. Since many secondary school teachers arent familiar with the skills that have been identified as the most essential to succeed in college, high school educators cover a breadth of skills. Postsecondary instructors would rather see more depth, not a broad range that are only an inch deep, asserts Weeks. For example, two students can pass algebra but have vastly different experiences and their knowledge can vary greatly. Colleges review class titles but rarely evaluate the essential skills mastered in the class. Now we know what skills lead to college and career readiness, suggests Weeks. And the more high school teachers are aware of those skills and can teach them, the better their graduates will perform in postsecondary education. Boone County schools also are collaborating with Northern Kentucky University to develop basic math programs. We want to make sure that every student is at that level of mastery. It drives everything we do, [Karen Cheser] says. To prepare students to be college ready, it requires conversations, transparency, and a willingness to put out data. It takes community-will and providing resources, she remarks. Publication Title. The Hispanic Outlook in Higher Education Publisher The Hispanic Outlook in Higher Education Date 08/2013 Study Explores Why many High School Graduates Are not Ready for College by Gary M Stern Content Type Journal Article Abstract The report underscores the importance of the skills that are most essential and associated with career and college readiness, [Paul Weeks] says. Since many secondary school teachers arent familiar with the skills that have been identified as the most essential to succeed in college, high school educators cover a breadth of skills. Postsecondary instructors would rather see more depth, not a broad range that are only an inch deep, asserts Weeks. For example, two students can pass algebra but have vastly different experiences and their knowledge can vary greatly. Colleges review class titles but rarely evaluate the essential skills mastered in the class. Now we know what skills lead to college and career readiness, suggests Weeks. And the more high school teachers are aware of those skills and can teach them, the better their graduates will perform in postsecondary education. Boone County schools also are collaborating with Northern Kentucky University to develop basic math programs. We want to make sure that every student is at that level of mastery. It drives everything we do, [Karen Cheser] says. To prepare students to be college ready, it requires conversations, transparency, and a willingness to put out data. It takes community-will and providing resources, she remarks. Publication Title The Hispanic Outlook in Higher Education Publisher The Hispanic Outlook in Higher Education Date 08/2013.

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Samah Elmeri International Marketing 17 November, 2013 Abercrombie & Fitch Introduction For the purposes of this paper we will be discussing the boycott effects on Abercrombie & Fitch; a U.S based clothing company. At first we will analyse the concept of boycotting international companies to understand the different choices boycotters make when targeting the guilty company. We will look at the history of the company; it’s beginnings, evolution of concept, failures and successes. An important part of this paper will be assessing the main factors and reasons that led to the boycott. We are going to be analysing the effects of the boycott keeping in mind that although the reasons behind the controversial boycott have taken place a couple of years ago, only in 2013 has the boycott been initiated by several different parties involved. To be able to understand what triggered the boycott to begin we are going to try to understand how it all came about to begin with. There are several concerned parties in the boycott and each have their own agenda and reasoning to boyco tt the company. To give a more thorough analysis of the initiators of this particular boycott their relation to one another will be discussed in the paper. Another important part of the boycott is the different types of effects that these boycotters have on the company. We will closely study the reasons, the effects, the affected parties, and the path for damage control and reconciliation chosen by Abercrombie & Fitch as well as its results both the negative and the positive. Finally we will discuss the effectiveness of the boycott on the Abercrombie’s internationalization, market strategy, competitiveness, and market activities. Boycott History of Abercrombie and F... ...escribes Jeffries business savvy skills saying; â€Å"If history is any indication, Jeffries won’t let anyone — â€Å"girlcotting† high school feminists, humourless Asians, angry shareholders, thong-hating parents, lawsuit-happy minorities, nosy journalists, copycat competitors or uptight moralists — get in his way.† Another important issue that was addressed in the Business Report article is the fact that A&F only carries larger sizes in the men’s clothing because athletes are expected to buy A&F clothes however in the women’s clothing lines sizes are smaller and do not carry to larger sized females. â€Å"He doesn’t want larger people shopping in his store, he wants thin and beautiful people,† Lewis said. â€Å"He doesn’t want his core customers to see people who aren’t as hot as them wearing his clothing. People who wear his clothing should feel like they’re one of the ‘cool kids.â€℠¢Ã¢â‚¬ 

Assess the Aftermath and Impact That the First Opium War Had on China

Question: Assess the aftermath and impact that the first Opium War had on China Essay: The First Opium War fought between Britain and China from 1839-1842 was a clash between two vastly different cultures, one struggling to control trade rights, and the other desperate to limit the impact of foreign trade upon the local population. The war changed the way China acted towards its foreign counterparts, exposed the weaknesses of the Chinese feudal system and forcefully opened-up China to the rest of the world. There were severe economic, social and political consequences that the war had on China. Prior to the war China had believed that the Chinese empire was the ‘Heavenly Middle Kingdom’ and superior to all other civilisations. China had very little contact with the West and foreigners were continually looked down upon. Despite strict government regulations, foreign trade with the West in China grew during the late 18th & early 19th century. The West became desperate in trying to balance their thirst of coveted Chinese goods for their own goods but China showed little interest in Western products until 1817 when Britain sold 240 tons of opium into China and when the West found a product which China did not have, opium. Opium smuggling developed rapidly and the trade literally produced a country filled with opium dens and drug addicts. Thus the government decided to do something about this problem and sent Commissioner Lin Zexu to sort things out. However it was Zexu’s actions that eventually started a war in which brought China into a humiliating defeat. The Treaty of Nanking is an official document that marks the conclusion of the First Opium war; it is also considered an unequal treaty by the Chinese. China was ordered to handover Hong Kong, open up five more ports for trade and pay 21 million ounces of silver to Britain. Britain also received fixed tariffs, the ‘most favoured nation’ status and imprisoned British nationals were not to be tried under Chinese law. This treaty caused many problems for China as no restrictions were placed on British merchants who were free trade in China, the opium trade more than doubled in the three decades. As Hong Kong was to be ceded to Britain, it gave the British a base for further military, political and economical penetrations of China. Import duties were lowered from 65% to 5%, effectively traumatizing China's home industries. The treaty also exempted British nationals and any Chinese person who had either dealt with the British, lived with them or were employed by them, from Chinese law. This provided a refuge for Chinese criminals. No sooner had the Chinese emperor made concessions to Britain, he was faced with similar demands from US, French, Belgium, Sweden, Norway and Russian governments. Greatly weakened by war he had no choice but to grant their requests. Seeing China’s weakness, the foreign powers sailed up to impose treaties similar to that of Nanking. By 1860, a massive amount of 6400 tons of opium was being annually imported into China. Western merchants mainly bought silk and tea from China and the export of tea from China increased to 42,000,000 kg in 1855 from only 7,500,000 kg in 1843. The export of silk rose to 56,000 bales in 1855 from a relatively small sum of 2000 bales in 1843. The tea and silk producing regions around the treaty ports expanded and benefited from the foreign trade and resulted in more and more farmers who abandoned the production of food stuffs to produce silk and tea. When Shanghai opened up to foreign trade, the occupation shift for the coolies and boatmen who would transport tea and silk throughout the regions in Canton were now unemployed since the majority of trade moved from Canton to Shanghai. This caused a food price hike and the unemployment rise. As Canton wasn’t the only port open for trade, the inland boatmen who transported goods to Canton from other areas before the war, lost their business. The amount of European goods and opium that flooded china severely strained the economy and provoked an economic crisis which resulted in the shortage of the Spanish silver dollar. The Spanish dollar appreciated so much that Canton abolished it and introduced the Mexican dollar. The monetary disturbances in China was enhanced by the internal monetary crises in China were the Chinese copper cash continued to devalue due to poor management and insufficient supply of copper. The monetary crises devastated the Chinese financial system and caused the loss of morale. With the rush of cheaper Western machine-made products, the home textile industry in China was almost destroyed. For many centuries, clothes were made by hand so this business was heavily impacted by foreign trade. In order to survive, this industry had to decrease the price of their products but, because the production methods remained basically untouched, the cost of production was also unchanged. Therefore the lower price came at the cost of the lower of the living standards of the textile workers. The Opium War almost entirely collapsed China's economy. However, it also forced China's economy to quickly adapt and evolve. The war rushed China's development of capitalism. Even before the war, a market economy was already developing in China's urban areas. The â€Å"invasion† of foreign capitalistic powers enhanced this change. However, the coming of outside influences did not result in the independent development of capitalism in China; rather it turned China into a semi-colonial semi-feudal state. This happened because Chinese industries were exposed too soon to the outside world, being insufficiently prepared and poorly equipped to compete in international or even domestic markets. Western capitalism greatly changed and influenced the Chinese economy as on one hand, the opening of China damaged the basis of China's self-sufficient economy, the urban handicraft and rural homestead industries. But on the other hand, it greatly enhanced the development of China's urban market economy. After China's disastrous defeat in the Opium War, the Chinese realized that they were no longer the â€Å"Heavenly Middle Kingdom†. Having lost at the hands of the â€Å"barbarians†, Chinese intellectuals recognized that in order to deal with the strangers from the West, they must understand the Westerners and the place they came from. Before the Opium War, the Chinese concept of European countries was very vague and in some cases, even ridiculous. After the Opium War, China intellectually discovered the West as Western political ideas, social structures, and in some areas, new technologies were introduced. Western ideas of parliamentary democracy and capitalism were vaguely made known and international alliances became a concept. One of the writers, Wei Yuan, first proposed that in order to fight the West, China must learn from the West. Wei's proposal received many positive responses as it was after all that China lost to the Westerner's â€Å"strong ships and sharp weapons†. So, China for the first time established something on the equivalent of a foreign ministry which was mainly occupied with the study of Western technology, modernization of the Chinese army and the open of modern factories. The first factories opened were for the military, and specialized in the production of modern weapons and ships. The running of these factories did not depend on the profit it made, nor the demands of the market so money making was not a concern. This meant that administration techniques of managing a large commercial enterprise were not yet developed. Even so, seeing that Western enterprises made a profit, the Chinese government began to establish commercial enterprises. Immediately after the Opium War, Western merchants had not yet fully entered the Chinese market. The Manchu government, although short in profits, could still find enough funds to start new industries. The private sector also was quite wealthy. With the collapse of the feudalistic economy and the stimulations by Western capitalism, it was willing to invest in modern enterprises. At the same time, Western companies absorbed some Chinese capital. It could be said that shortly after the Opium War, Chinese capitalism had a good chance to develop. The Opium War exposed the weaknesses of the Chinese feudal system. The cost of the war and later the compensation all fell onto the shoulders of the farmers and civilians. The Manchu government could no longer protect, and govern its people and as China's economy collapsed, poverty was wide spread, and insurrection sprang up all over the country. The Manchu government showed its weaknesses when it signed the Treaty of Nanjing without using all possible methods of resistance. The Opium War helped to discredit the Manchu government and encouraged popular movements. For many Chinese, the Treaty of Nanking was a signal that the Manchu dynasty was at its end – humiliated, weak and corrupt. A republican movement ran across the political landscape, stimulating nearly fifteen years of civil war. Seeing the social chaos and the weakening of the Manchu dynasty, Chinese intellectuals sought to make China strong. Unlike the government, the intellectuals believed that adapting Western technologies and industries was not enough and that China must undergo political changes as well. Chinese intellectuals began to study Western countries and at the same time, the Chinese government imported Western technologies and industries. They, like the officials, believed that the government should allow and protect the growth of capitalism and that the army must be modernized to fight Westerners on the battlefields. But most importantly, private enterprises should be formed without government interventions and companies must be created to compete in the market place. The intellectuals also proposed a parliamentary system as a new, more democratic political system. This proposal was the first attempt of private citizens to get involved in the government. The Opium war created an entire new level of crime and disorder in Southeast China. The British navy drove away the pirates along the coast and up into the Kwangtung-Kwangsi highlands. There, the pirates would periodically raid plentiful villages up the river. To add to this, former militiamen used their weapons for banditry. The Opium War had led the people of China to witness the destruction of their military and navy by the strongest military force at the time. It led to a greater understanding and appreciation for West, despite their hatred for it. This led many people to consider and try to understand Western doctrines and beliefs. Also some British missionaries, who had knowledge of China and the language, played in the embarrassment of the country to which they had come perceived with no object other than to preach Christianity. Thus for the first time instances of foreign religion was seen. The Opium War was also one of the many factors that led on the famous Taiping Rebellion. Directly after the war feuds between the Punti and Hakkas clans rose. The Hakka people were Chinese that came from the north and had immigrated to southern China. They were treated as ethnic minorities by the Punti’s who were the Cantonese natives. This led to competition between the two in farming and economy. In the 1850’s the feuds and wars between these two clans resulted in the loss of hundreds of thousands of lives. The dislike towards the Hakkas eventually led them into following the Taiping Rebellion’s leader Hung Hsiu-chuan. Hung Hisu-chuan was the revolutionary leader who incorporated the Western ideals and beliefs of Christianity with classical Chinese themes. He believed himself to be the younger brother of Christ, and was sent on a mission to return Christianity to China. This belief was soon adopted by thousands of Hakkas alike, because of the loss of faith in the Ch’ing dynasty partially due to the defeat in the Opium War, it’s social and economic effects afterwards and the silver & copper crisis. The movement to change and restore China with Christianity finally resulted in the Taiping rebellion against the Ch’ing dynasty. The Taiping rebellion lasted from 1851 to 1864, causing the loss of millions of lives. The Ch’ing dynasty’s power was questionable during this time because the rebellion lasted so many years. Finally, the Ch’ing dynasty managed to organize an new army to overthrow the Taipings. This new army and organizations was aided by Western countries who wanted the Ch’ing dynasty to continue. If the Ch’ing dynasty was overthrown it would end the unequal treaties with between China and the West. The Opium War resulted in the dramatic changes in China economically, socially and politically. It no doubt opened China's doors to the outside world while changing China’s view and relationship with the Western world incredibly. The war shattered the idea that China was the ‘Heavenly Middle Kingdom’ as well as breaking China’s false sense of superiority over other nations. It resulted in a major change in the economy and the social relationship between the people of China and because of the Opium War, China was left with internal struggles and warfare, increased crime, an economy downfall in Canton and people without work or money. The Opium War led to the major influence of the Western cultures and belief in China, and the loss of power and control China had over Western nations. The unfair treaties that were created left China in weak position to the West, and opened China to Western influence which is still observed to this date. Bibliography: China, Opium Wars to Revolution by Michael Gibson. Wayland publishers, 1975 From Opium War to Liberation by Israel Epstein. New World Press, Beijing, 1956 The Chinese Opium Wars. by Jack Beeching. Harcourt Brace Jovanovich, 1975 The Inner Opium War by James Polachek M. Harvard University Press, Cambridge, 1992 The Opium War Through Chinese Eyes by Arthur Waley. George Allen and Unwin Ltd. , 1958 The Treaty of Nanking, signed on the 29th of August, 1842

Does Underwriter And Litigation Risk Effect Ipo Pricing - Free Essay Example

Sample details Pages: 13 Words: 3954 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? Going to public fund is one of the strategies to company to getting additional fund. Before that, company must publish their share to bursa Malaysia before invite the public to buying their share. But for unlisted company they cannot simply publish their share to public and they must be listed in bursa Malaysia first. Don’t waste time! Our writers will create an original "Does Underwriter And Litigation Risk Effect Ipo Pricing" essay for you Create order With that they must publish their prospectus when the first time they want to issue share to public and this is we called Initial Public Offering (first time going to public). Background In Malaysia history of IPO are begin when Malaysia stock market was establish as the Malaysian stock exchange in 1960. 1n 1973 the Kuala Lumpur Stock Exchange Berhad (KLSEB) and Singapore Stock Exchange (SES) are begin to replace the Malaysia Stock Exchange. In that time number of company that issuing IPO is not more to 500 companies. From 1973 until 2007 the IPO trend is showing quickly publish. In 1973 the number of listed company only 262 and up until 2007, Malaysia stock market have 1028 company. This rapid increase in the number of new listings is attributed to a number of factors, mainly to raise financing for expansion, to reduce the cost of new funds and to reduce the level of leverage (Shamsher et al., 1994). In 1980, the market valuation in Bursa Malaysia is about RM43 billion and rea ch to a trillion ringgit in year 2007. It happen when many companies are started to going public fund. Apart from that in year 1991 to 2003 the individual retailers have constituted more than 85% of the market player in bursa Malaysia IPO. Compared to the individual retailers group, the institutional investors group is reporting a smaller average at 2.05%. The remaining 6.47% of the market participants is consisting of others. From the 1984 to the 1995 the newly issue of IPO on the main board on KLSE is 173 company. Similar like that, when certain company wants to issuing the IPO, they are requiring by law to allocate 30% for Bumiputra investor. The main objective is to ensure the Bumiputra has own shareholding at least 33% on the entire market share. The pricing of IPO in Malaysia are regulated by Security Commission (SC) and it only take place when ministry of Trade and Finance (MITI) and Foreign Investment Committee (FIC) have giving their consent to the listing. It means the SC has make valuation on company in term of company financial statement and performance to evaluate whether certain company is really valuable to publish on the bursa Malaysia. One of the differential and unique IPO in Malaysia is, major of shareholder and the promoting bank (underwriter) have the choice to provide the profit guarantee not less than 90% on forecast profit on prospectus. Another way, the prospectus of company must be publish in Bahasa or English language and it must submitted to MITI, FIC and SC and the first trading is about in 12 month. The company, is not to seek approval the right issue from the SC during the 12 month they are listing, because actually the time between companies submit prospectus date to the SC for approval right issue to start trading is about 6 month. Recent reforms in Government Linked Companies (GLCs) are expected to improve performance and encourage private investment. More than 40 GLCà ¢Ã¢â€š ¬Ã¢â€ž ¢s are listed, comprising less than 1 0% of Malaysiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s GDP. Changes in management, adoption of performance based contracts for management and implementation of key performance indicators (KPIs) are some of the reform that has been underway since April-May 2004. Merger and Aquistion (MA) actively declined in volume terms, due to a lack of very large transaction. Nonetheless, the number of MA transactions has remained stable over the past two years. Singaporeà ¢Ã¢â€š ¬Ã¢â€ž ¢s Temasek Holdings acquired large minatory positions in Malaysia banking and plantations companies. In the automotive industry, Chery Automotive, a Chinese assembler has announced plans to earmark Malaysia as their regional distribution hub, while Proton reached a deal to assemble Volkswagen Cars and distribute them in Southeast Asia. Proton, Sime Darby and Telecom Malaysia have all announced acquisitions of foreign companies too. 1.2 Problem Statement Initial public offering (IPO) one of the manners to company get additiona l fund thru equity funding, when certain company wants to increase their operation, but it not sufficient fund of borrowing they can officially going to public fund primary market (when first time company going to public). In other words, this IPO tend use by small growth firm to increase their capital and to issuing new capital. This company must be perfectly evaluating certain cost, i.e. cost of underwriting, attorney fee, cost of management time allocation to the lawsuit, reputation cost and so on. All of these cost potentially become liability for a small company in the first time they issue IPO. The first problems of the research are to identify about the underwriter effect on IPO. Apart from underwriter, second areas on this research will looks on information of the companies, information also can become higher cost for issuer, they will incur cost to encourage information generation prior to the IPO and after the IPO because issuer want giving good impression to customer a bout their company. But for customer, cost will be incurred when they want searching strong information about certain company profile. Basically, IPO will be determining by investment bank and IPO firm managements to setting up IPO price (offer price spread). This to make comparison, between company offer price (company determine IPO price) and what actual price should be offer by company. On top of that, potential litigation costs are quite significant for firms that have recently gone public. Attorney fees, the costs of management time allocated to the lawsuit, reputation costs, and settlement costs represent an enormous potential liability for a young firm. The last areas we will look on relation between risk and IPO in an aspect of the litigation-risk, where the firms with higher litigation risk will affect their IPO? 1.3 Approach of the Study In research we have two methods, firstly we have quantitative and second the qualitative (Gubra and Lincon, 1994). In our resear ch the quantitative method will be chosen with the purpose of this study because it able to value observation, precise measurement, statistical analysis, data collection is fix/cannot manipulate, variable truth and the most important is the hallmark good quantitative research are reliability and validity of data collection. After data are already collected it will be need to be edited, then data have to be coded and lastly data have to be key in and software programmed used to analyze the data. After data has been analyzed, we can make interpretation to getting conclusion about our research and make recommendation or suggestion to make improvement to Malaysia IPO. The final result also can be use for investor to do decision making about the attraction investment for them. 1.4 Scope of Study The scope of our research is consisting all company listed during 2000 until 2008 in Bursa Malaysia, whereby compasses 8 years in areas of to identity whether the Underwriter, Litigation and Prospectus will influence company pricing of IPO. CHAPTER 2 LITERATURE REVIEW This chapter we examine those factors generally considered to impact IPO performance to assess the extent to offering price is likely to be set and in setting the offering price. It is organized into two sections. The first section presents the historical of IPO and second section given the capital structure, secondary market return, litigation and prospectus in effected the IPO pricing. 2.1 Initial Public Offering Malaysia law define sale of expand authorize share of a company as new issue and the offer of share from the existing shareholder to the public is define as sale of share. The new issue market therefore consists of new issue and the sale of share of private company and government linked company to the public. Regulator approves new issue with elaborate care to ensure public interest is safeguard and the approval process may take up to a year in a large placement. Offering new issue to outsider help to raise finance for expansion and to obtain less costly source of new fund. Some research has been done by Fama 1984, company that listed in the New York market raise capital at a lower cost, the having from which amount to three quarter of one percent compare to unlisted company. Apart from that the investor has purchase of share listed in the secondary market obtain nominal yield, with are lower on average than in the new issue market. This extra return in a new issue market is the insider value factor which make offer price lower thus giving a high return. The over subscription of new issue keep feeding the frenzy for new issue. One study has suggest that the over subscription rate in Malaysia average 46 time (Dawson 1987, Yong 1991). Similar like that the new issues are price by the market at a much higher level than would be the case if (a) the new issue was equally like to be issue in bull or bear market and (b) there is no frenzy in wanting to subscribe to new issue. Because of the frenzy in the new market issue, there is practice pressu re during the initial few month, which keep the price artificially high during this early period after listing. At the same thing, one would expect the price in the new issue market to attain normal level after the initial few month when normal price unfettered by price pressure begin to emerge. For another part the new issue are substantially underprice in the Australian, UK, USA and the developed market. It similar behavior found in Malaysia because the offer price appears to be a deep discount of the initial day for market price. But the extent of underpricing is smaller in the developed market than in the developing market. The research finding on the IPO in the some developed country such as Australia, UK, USA and developing market such as Korea, Malaysia Singapore and other suggest an apparent underpricing of new issue because offer price appear to be a large discount off the initial listing day market prices. Considered again the long run share market return report in all these country, and the reward rate of those allocation new issue are substantially higher than normal rate of return in the secondary market of these country. Therefore, new issue should provide higher reward, which is the source of underpricing. apart from that the investment bankers try to reduce the offer risk and cost of underwriting by underpricing the issue. The present evidence of underpricing may also be due to the uncertainty about the real value of share and the related need to offer compensation to the investor for assuming the risk of the uncertainty. But for recent research has been done (Arif, Prasad, Shamsher and Annuar 1994) contradict this widely disseminated explanation. Share appears to be issue at their intrinsic value but then price are bid up by an optimistic investment market, which wrongly interpret demand pressure as understanding. While Ross (1984) explain the underpricing of IPO using the idea of information asymmetry between informed and unimformed invest or. He suggest that the asymmetry of information between the issuer and their investment banker is less relevant for pricing. 2.2 IPO and Secondary Market Returns Bradley et al (2009) examined IPO secondary market returns on the first day of trading during 1993-2003, and findings important things. First, there are open to close return are much larger than previously documented and potentially exploitable. It was averaging over 2% during the sample period. Second, we found that the market does not reach an equilibrium price until approximately 2 h into trading. Although this average is driven upwards by IPOs during bubble period. Third is that effect is persistent over the entire sample period, considered where they consider several non-mutually exclusive explanations, such as: price support by the lead underwriter, laddering, retail sentiment, and information asymmetry. They also examined the impact of retail sentiment on secondary markets return and found there were a stro ng positive relationship between the proportion of small trades and open to close returns consistent with the view that retail demand and sentiment can push IPO prices higher. But this argument assumes that these overoptimistic retail investors would ultimately experience a reversal. They also argue that information asymmetry can be in the form of aggregate demand uncertainty, which is unlikely to be resolved until the IPO opens for secondary market trading. 2.3 Company Capital Structure Basically firm has two source of fund, firstly they can use from internal fund and second for external fund. For internal fund they can use additional retain earning and also additional equity of shareholder and for external fund it can be use loan from financial institution and primary debt issue in the debt market. The capital structure theory is inconclusive about which factor determine borrowing level, expect providing the general idea that a firm ability to identify positive net presen t value investment should determine capital need, and further that a firm capital structure quality also determine the tax shield value from debt. Modigliani and Miller (1958) argue that the capital is not influence by a firm financing mix under the assumption that the capital market is perfect and there is no corporate tax. Average cost of capital will be lowering when market is imperfection and it increase value of the firm subsequent to borrowing. But for (Robicheck and Myer 1966, Hamada 1972) the firm financial risk will be increase when company has make decision to continuously borrowing. For another part if company is have extra debt, the shareholder risk will be higher. It happens because if these companies are going to bankruptcy, the first company obligation action is paying all their debt first. For (Gupta 1982) before company achieves maximum debt, the maximum value of the firm will always be reach first. Company has made decision going to public because they want to i ncrease fund to run the business in big scale. For (Gordon 1990) examined the relationship between a firm financing structure and the company technology. His result has supported the idea that firm with high capital to labor ratio acquire financing to run it business. 2.4 IPO and Litigation risk In our study on litigation, Skinner (1994) finds that the threat of litigation potentially alters firms disclosure behavior, and Krishnan and Krishnan (1997) and Shu (2000) find that this same threat causes auditors to stay away from risky clients. We extend this line of research by documenting another effect of litigation risk, it leads IPO firms to lower their offer price as one form of insurance against future litigation. Tinic (1988) tests the litigation-risk hypothesis by comparing the IPOs prior to and subsequent to the 1933 Securities Act, which substantially increased the legal exposure of IPO issues. Alexander (1991) examines 17 computer-related IPOs in 1983. She finds that se curities lawsuits were more likely filed when the dollar amount of the ex post stock price decline was sufficient to support the fixed cost of bringing a case. She also finds little variation among the settlements as a fraction of shareholder losses. Further, consistent with the deterrence effect of IPO, there is evidence that firms that engage in more IPO significantly lower their litigation risks, especially for lawsuits occurring closer to the IPO dates. After controlling for the endogeneity of initial returns and lawsuit probability, both the insurance and deterrence aspects of the litigation-risk. The simultaneous-equation framework used in this study is potentially useful for other settings. 2.5 IPO and Prospectus Information The process of taking a firm public enables firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s owners to realize both personal and professional goals. Taking the firm public, for example, enables entrepreneurs who have invested considerable time and resources in building t he firm to sell a portion of the firm, thereby providing personal funds as a reward for their efforts and enabling them to diversify their wealth (Rock, 1986). Moreover, the IPO helps entrepreneurs secure funding that allows them to pursue growth opportunities for the firm. As the firm grows, entrepreneurs may find themselves unable to secure increasing capital requirements to fund firm growth. Also, entrepreneurs may seek to avoid covenant-filled commercial loans that hinder their ability to take the risks necessary to pursue firm growth opportunities (Rock, 1986). Investment bankers are responsible for coordinating the stock offering for the IPO firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s managers (Benviste and Spindt, 1989). They provide an invaluable source of guidance for IPO firm entrepreneurs and managers, most of whom will have had no prior experience with the complex, often lengthy, process of taking the firm public. In addition to facilitating the IPO process by counseling firmsà ¢Ã¢â€š ¬ â„ ¢ entrepreneurs and managers, investment bankers assume primary responsibility for effectively marketing the firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s securities to the investment community. The investment bankers determine the offer price spread, which must be disclosed either in the preliminary prospectus or shortly after filing the registration statement in an amended prospectus. The actual offer price is not determined until the day prior to the stockà ¢Ã¢â€š ¬Ã¢â€ž ¢s offering. This spread and offer price are of central importance to the entrepreneurs taking the firm public, as they determine the amount of funds the IPO firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s owners can expect to raise as a function of the stock offering. Given their centrality in the IPO process, it is important to understand those factors that may assist investment bankers in their initial determination of the spread within which they believe the final offer price will be set and, subsequently, the final offer price. The price sp read may provide an indication of the level of uncertainty surrounding the IPO. Uncertainty in the IPO context derives largely from the fact that the firm, while it may have an extensive operating history, has not previously operated under public scrutiny. CHAPTER 3 METHODOLOGY This chapter are consist and will be discuss about the purpose of the study, population of study, data collection, independent variable, dependent variable, research modeling and the lastly the data analysis. 3.1 Population of Study The population of our research is consisting all company IPO from 2000 until 2008. We also want to identity whether the Underwriter, Litigation and Prospectus situation will influence the investor to make the investment and how they react to company announcement of IPO in the good economic situation. On top of that, we might look on about company performance before and after the 1997 Malaysia financial crisis on the areas of our study. 3.2 Data Collection To investigate the new IPO issue since 2000 until 2008, which had all the require information for analysis on our research. The public record in various issue of investor digest, daily diary and the company files from Securities Commission (SC) and Bursa Malaysia (BM) were accessed to obtai n value for the variable. On top of that, requests for IPO prospectuses were sent to all firms undertaking IPOs in 2000 and 2008 as identified by the SC. 3.3 Independent Variables We rely on three independent variables for hypothesis testing, the first is the Prospectus Information. Founder CEO is a dichotomous variable with zero being a nonfounder CEO and one a founder CEO. CEO retained equity is calculated as the percentage of the IPO firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s stock that the CEO will hold following the opening day of trading. These data are reported in the prospectus filing. Board composition is measured as the percentage of independent outside directors serving on the board. Board size is measured as the total number of directors serving on the IPO firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s board. Second independent variable is Litigation Risk, as argued earlier, a firm about to make an IPO faces a trade-off in its pricing decisions. A higher offer price increases proceeds from the IPO, but it also raises the expected litigation costs. Two predictions emerge concerning the cross-sectional relations between IPO and inherent litigation risks. First, firms with higher litigation risk purchase more insurance, that is, they their shares by a greater amount (the insurance effect). Second, firms who choose higher levels of insurance incur lower expected litigation costs in the form of reduced probabilities of lawsuits. The third part is underwriting. The underwriter is playing to influence the public confidence about the company. If the company IPO is not over subscribe, the underwriter will be help that company to resell the IPO and maybe buying the IPO behalf of the company. When the company first time to setting the IPO price, it to hart to determine the suitable price because lack of expertise. The simple way to company is making negotiate with the underwriter. The issuer and underwriter is lock to the offer price regardless of the subscription of the market movement. Basically inside the underwriter agreement it conclude the underwritten fee, amount and whether the issue will indemnify the underwriter again all liability, cost and expence incur by the underwriter in relationship to the issue. 3.4 Dependent Variables This variable is computed as the difference between the high and low values in the range of offer prices established by the investment bankers. We calculate this measure as the (stock price at the time of IPO the firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s book value)/stock price at the time of IPO. This price reflects the price at which the firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s stock will be sold to initial investors on the opening day of trading. A firm litigation risk is also increasing in the volatility of the stock. One way to obtain the expected volatility is to use the standard deviation of prior stock returns. However, this is not feasible for IPO firms. Another alternative is to use the standard deviation of post-IPO returns. However, this is not obser vable prior to the IPO and may not be in the managersà ¢Ã¢â€š ¬Ã¢â€ž ¢ information set at the time of the offering. For (Smith, 1991 and Raghavat 1996) the company that issue the new security in public need the investment banking to become their underwriter in return for a commission comprise management fee, underwriting fee and the lastly the selling concession. The compny also must carefully choose their investment banker to become their underwriter, because the good of underwriter will be able this company increase their IPO price (negotiation and discussion between bank and company). One of the criteria is the underwriter must know the company industry, tern of propose offering, potential conflict of interest relating to the investment banker affiliation with the issuer competitor and the ability to the company provide research support after the offering price. 3.5 Research Modeling DEPENDENT VARIABLE INDEPENDENT VARIABLE Prospectus Information Initial Public Offering Litigation Risk Underwriter E(à ¯?†¢i) = ÃŽÂ ²1 + ÃŽÂ ²2X2 + ÃŽÂ ²3X3 + ÃŽÂ ²Ãƒ ¢Ã¢â‚¬Å¡Ã¢â‚¬Å¾Xà ¢Ã¢â‚¬Å¡Ã¢â‚¬Å¾ + à ¯? ­i. ÃŽÂ ²1 = Intercept, value of à ¯?†¢I when X2, X3, X4, equal to zero (0). ÃŽÂ ²2 = Changing in à ¯?†¢i when X2 change with assumption X3, X4, is constant. ÃŽÂ ²3 = Changing in à ¯?†¢i when X3 change with assumption X2, X4, is constant. ÃŽÂ ²4 = Changing in à ¯?†¢i when X4 change with assumption X2, X3, is constant. X2 = Prospectus information X3 = Underwriter X4 = Litigation risk à ¯? ­i = Yi error in population. The hypotheses are stated below: H0 = 0, mean has no significant relationship. H1 à ¢Ã¢â‚¬ °Ã‚   0, mean has significant relationship. Prospectus information H0 = Prospectus information does not significant relationship to IPO H1 = Prospectus information has significant relationship to IPO Underwriter H0 = Underwriter does not significant relationship to IPO H1 = Underwriter has significant relationship to IPO Litigation risk H0 = Litigation risk does not significant relationship to IPO H1 = Litigation risk has significant relationship to IPO 3.6. Data Analysis The final stage of our methodology is data analysis. When the data already run we will elaborate on the various statistical test and make interpretation of the result. To analysis our research we use SPSS for window software. The data was analyse to identify, examine, compare and interpreted theme and pattern. The analysis has been started after the collection of all the necessary data basically come from secondary data collection. Use of this SPSS software is illustrated which mainly because they are easily available in business settings. In data analyses, we have three objectives, firstly getting a feel for the data, second testing the goodness of the data and lastly testing the hypotheses developed for the research.