Essays on Stock Option

Introduction

Good governance and capital structure play a crucial role in the maximization of corporate profitability, either through an increase in profit margin or a reduction in capital cost or both (Uwuigbe, 2014), and in effect shareholders’ wealth. Companies who are aware of these factors in their objectives of profit maximization eagerly put their good governance principles into corporate codes, which act as valuable reference points in their governance decisions. As such, sound corporate governance engenders investor confidence in terms of capital preservation and acceptable returns of investments (Okiro, Aduda, & Omoro, 2015; Agyei & Owusu, 2014; Heng, Azrbaijani, & San, 2012). With ...

Introduction

This paper responds to relationship between finance and governance by evaluating how financial decisions are connected to corporate governance. In the rise of limited exceptions to corporate governance and finance seem to have natural tension, if there is no direct opposition. The polarity between finance and governance are two research areas that have been studied separately. It is essential to understand why these two areas function individually and separately. Certainly, the connection between financial decisions and governance are largely unmapped. The most relevant area relates to capital structure decision and their implications in creating a company’s value. Capital ...

Reasons for the severe decline in Chinese Stock market in 2015

Between June 2014 and June 2015, the CSI 300 Index rose by 150%, reaching the peak at 5,166.3 on 12th June 2015. What follows was a severe decline in the stock index. Within just one month, the CSI 300 index had lost 30% to 3,507 on July 8. Several factors caused the fall.

Short selling

In the run-up to the stock market decline, investors were aggressively involved in short selling and margin trading. Short-selling and margin trading allowed investors to purchase shares using borrowed money thereby increasing the demand for stocks. Investors engaged in short-selling sell stocks borrowed from ...

Qn1

My advice to William job is that there are tax implications for selling the shares at a profit. In the event that the stocks are sold at a profit then William Jobs will incur capital gain tax. In This case the market value of the inheritance of $ 500,000 has a current market value of $550,000 today. The capital gain on the shares is $ 50,000. However, the rate applicable is based on the length of time the shares are held. The sole reason is that it prevents the effect of fluctuation in the market. The taxation of ...