The OCS project

 

The OCS project requires you to determine the optimum capital structure
Complete a table similar to the the “Sample Combination WACC and OCS Spread Sheet”
Your table will likely not be identical since it depends on what your capital structure is now.

What was the existing capital structure for your firm? Do you believe it was optimum?
Use Hamada’s equation to determine the optimum.
Should your company take on more debt, repurchase stock, have a seasoned equity offering? Justify your answers

Sample Solution

he horizontal inequalities refer to the “inequality of economic, social or political dimensions or cultural status between culturally defined groups” (Stewart, 2008, page 3) as the main driver of conflict. Also, it remarks the ethnic differences and class displacement to “discourage outright rebellion” (Keen, 2012, page 761). Complementing the grievance ideology, as analysed in the book Why Men Rebel (Gurr, 1970), the ‘theory of relative deprivation’ shows how people’s grievances are represented by unmet expectations and their way to proceed against them are unsuccessful -this means that whether the authority or the non-state actors are unhelpful to respond to their needs, their frustration will be reflected in violent reactions (O’Gorman, 2011, page 29). Elite groups controlling economic and political accesses is a way to benefit certain groups and, therefore, creating a feeling of despair, showing many inequalities that reinforce the motivation of violent acts through seeking justice by their own hand.

Complementary to the concepts of greed and grievance, proxy measures of armed conflicts in the Global South can demonstrate the relevance of the framework. Moreover, many grievance proxies can also be found in greed motivations of war. This dynamic raises its hand as the key element to understand the whole process of civil wars and armed conflicts. Greed proxy measures, according to the greed theory creators, are the “population size and the primary commodity exports” (Collier et al. 2008, page 26). Grievances, on the other hand, consider as a good motivation of conflict the lack of education, the low economic growth, inequality, and ethnic grievances, not between ethnic groups but in the inter-state relationship, among others. If we analyse the concept of education, it plays as a double-face proxy factor. According to the ‘greed theory’ creators, they consider indicators of opportunity for self-financing rebellion like dependence and theft of natural resources, diaspora donations, subsidy from hostile governments, proportion of young males in the society and the average years of schooling, among others (Collier and Hoeffler, 2001, pages 3-6). Based on this premise, the economic factors along with the degree of dependency of natural resources will show the relevance of greed among the grievance in security analysis. It is worth to remark that people’s grievances are likely to be tangible but never strong enough to stand by their own against lucrative opportunities when presented (Beswick and Jackson, 2015).
Following very closely with proxy measures, the dynamics between greed and grievance can be an arguable mix as, for instance, the presence of lootable resources like diamonds, drugs, timber, etc. can be seen as a complementary incentive for grievances. “In reality the competing greed versus grievance hypotheses may, after all, be complementary explanations for conflict. Insofar as they do provide alternative views, a fair test for their relative explanatory powers is best conducted at the level of a quantitative country-case study, because cross-country comparisons of horizontal inequality are still at very early stages of development due to the lack of data” (Murshed and Tadjoeddin, 2007, page 33).

Nevertheless, debates in these processes commonly arise when the subjectivity of conflicts are p

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