Essay on health drinks - 1622 Words

Importance and Effects of Health drinks and Soft drinks in 21st century Introduction: Here we are going to discuss about the relevance and effects of health drinks and soft drinks like coke. We have explained in our study the advantages and disadvantages of these drinks. What are the ingredients of these drinks? How are they affecting every age group in the 21st century? Should they be used or not and if used in what amounts. The importance of these drinks help us to peep into their world and the drinking habits developed by people. According to a study 33% of U.S. adults that are 20 years of age or older are estimated to be overweight. Furthermore, over 58 million Americans weigh at least 20% or more than their ideal body weight. With†¦show more content†¦It is the most healthy out of the five energy drinks, and contains the least amount of calories and sugars. Now the problems with the consumption of regular soda beverages like coca-cola and Pepsi. Americans drink more soda pop than ever before: †¢nbsp;nbsp;nbsp;nbsp;nbsp;These popular beverages account for more than a quarter of all drinks consumed in the United States. †¢nbsp;nbsp;nbsp;nbsp;nbsp;More than 15 billion gallons were sold in 2000. †¢nbsp;nbsp;nbsp;nbsp;nbsp;That works out to at least one 12-ounce can per day for every man, woman and child. Kids are heavy consumers of soft drinks, according to the U.S. Department of Agriculture, and they are guzzling soda pop at unprecedented rates. Carbonated soda pop provides more added sugar in a typical 2-year-old toddlers diet than cookies, candies and ice cream combined. Fifty-six percent of 8-year-olds down soft drinks daily, and a third of teenage boys drink at least three cans of soda pop per day. Nearly everyone by now has heard the litany on the presumed health effects of soft drinks: †¢nbsp;nbsp;nbsp;nbsp;nbsp;Obesity †¢nbsp;nbsp;nbsp;nbsp;nbsp;Tooth decay †¢nbsp;nbsp;nbsp;nbsp;nbsp;Caffeine dependence †¢nbsp;nbsp;nbsp;nbsp;nbsp;Weakened bones Obesity: One very recent, independent, peer-reviewed study demonstrates a strong link between soda consumption and childhood obesity. OneShow MoreRelatedHealth Problems Of Energy Drinks958 Words   |  4 PagesWould you drink something that is associated with health problems and even death? Energy drinks are highly caffeinated beverages that many people have become depended on to make it through the day. They are used to give individuals a quick energy boost to help achieve things that need done. Today many people question how safe energy drinks really are, as for the quick energy they supply. They are known to cause multiple health issues such as: anxiety, restlessness, nervousness, stomach problems,Read MoreHow Energy Drinks Affect Health1135 Words   |  5 PagesHow Energy Drinks Affect Health Have you ever been drinking an energy drink and asked yourself, â€Å"is this good for me? Am I hurting my body by drinking this?† Well, I have done some research that shows the pros and cons of consuming energy drinks. Energy drinks are good for your health. Some studies show that they can improve memory,concentration, and athletic performance. Many energy drinks can contain B vitamins, water-soluble vitamins that aid in cell metabolism and support nervous and immune systemRead MoreSpeech : Energy Drinks, Health Benefits, And Risks1051 Words   |  5 PagesTitle: Energy drinks, health benefits, and risks. Introduction Attention Getting Device: How many of you all drink energy by a raise of hands So a lot people, today in going to tell you the health factors that in valve drinking energy drinks. Thesis/Central Purpose (i.e. The purpose of my speech is to____________) The purpose of my speech today is to inform you the health benefits and negatives of drinking energy drinks. I am also going to explain to you the more healthy energy drinks, that don’tRead MoreEssay about The Health Danger of Energy Drinks735 Words   |  3 PagesEnergy drinks are a kind of refreshments that are advertised as soft drinks that boost energy. The truth is these kinds of drinks are full of many harmful ingredients, such as sugar, stimulants, and other herbal supplements. Energy drinks are targeting high school and college students who may use this kind of drink to keep them awake for a midterm, or even give them a hallucination feeling any other alcoholic beverages will do. Many studies showed the disadvantageous of these drinks, yet this industryRead MoreHealth Drink1869 Words   |  8 PagesExecutive summary: 1.1 Background India, the world’s largest malt-based drinks market, accounts for 22% of the world’s retail volume sales. These drinks are traditionally consumed as milk substitutes and marketed as a nutritious drink, mainly consumed by the old, the young and the sick. The Health food drinks category consists of white drinks and brown drinks. South and East India are large markets for these drinks, accounting for the largest proportion of all India sales. The total market isRead MoreCaffeine, Caffeine And Health Benefits Between Coffee And Energy Drinks And How They Each Affect Brain Function1242 Words   |  5 PagesCaffeine Additives in Beverages Many people either enjoy to drink a cup of coffee, an energy drink, or sometimes both. People drink these without any knowledge of them other than the fact that they contain caffeine. How much caffeine do they contain though? Are these drinks even considered to be healthy for humans? There are various differences in the nutritional facts, caffeine absorption, and health benefits between coffee and energy drinks and how they each affect brain function. Black coffee isRead MoreThe Marketing Plan for the Health Pure Fruits Drinks2448 Words   |  10 Pagesor The Marketing Plan for the Health Pure Fruits Drinks Introduction Pepsi, as one of the most successful drinks brands, has more than 100 years’ history since it established. At the beginning of Pepsi, it was made by a pharmacist to treat stomach illness in 1898. Nowadays, PepsiCo is an international corporation within more than One hundred and forty thousand employees around two hundreds countries. During the evolution of Pepsi, it insisted consistently on its marketing position which concentratesRead MoreAddiction : Coffee And Energy Drinks990 Words   |  4 Pageselectronics, but as time progresses, coffee and energy drinks have become one of American’s top addictions. Both drinks are consumed on a daily basis by many to help with their workload and to boost their energy levels. Although, coffee and energy drinks share some health issues, alteration of moods, and provision of energy, they differ in the amount of sugar and caffeine they contain. Coffee is a brewed drink made from roasted coffee beans. This drink contains caffeine and is consumed by many aroundRead MoreDiet Pop And Its Effects On Human Health944 Words   |  4 PagesIntroduction Many people have faced problems in deciding which pop to drink, regular or diet. People have different opinions on the reasons why they prefer one particular pop to another. Through various researches done all over the world, people have tried to figure out specific causes of ailments especially those thought to be associated with food. As an avid pop drinker, the need to know the best pop option has made me curious about how big of a difference there is. It is important to know theRead MorePreparing Your Argument Essay634 Words   |  3 Pagesfrom different organizations and people who have studied the subject. Source: electronic Web, www.thepolypost.com Provides not only opinions but facts as well. Chart, graph, infographic: Web, www.businessinsider.com It shows that high sugary drink consumption is associated with diabetes. Writing Your Claim 1. Complete the following sentence: I plan to prove that... - I plan to prove that putting the soda ban in effect can reduce obesity rates. 2. Cross out I plan to prove that. What

Person Centred Therapy Offers the Therapist All That...

In the field of Counselling and Psychotherapy there are many differing theories which are used to help those who seek counselling including Person Centred Therapy. Person Centred Therapy has been described as one nation, many tribes by Pete Sanders. In many parts of the world Person-Centred Therapy (PCT) is seen as a family of therapies, including Experiential Psychotherapy and Focusing. Closely associated with PCT are Existential Therapy and various integrative approaches. Since Carl Rogers’ death, there has been much debate regarding what can and cannot rightly claim to be called ‘Person-Centred Therapy. ’Proponents of the differing Tribes argue for their schools of thought. (Warner 2006). At the heart of all the differing thoughts†¦show more content†¦Many critics of the theory have misunderstood Roger’s concepts and commented that this is outmoded today, and according to Bohart (2007) the critics were saying that it â€Å"glorifies the individual at the expense of others†. Wilkins (2003) argued that Roger’s concept of self-actualization is culturally biased, reflecting a Western cultural emphasis on the separate, autonomous individualistic self. However, Bohart states that Roger’s concept of self as culture-specific is compatible with cultures which view the self in relational rather than individualistic terms, and even cultures that have no concept of self. Self-actualizations means enhancing or actualizing the self as the self is defined for that person and culture. Roger’s did believe that the tendency of actualization of a person in therapy was to always go in a positive pro social direction, but critics state that it may lead to self centred narcissistic behaviour (Bozarth and Brodley, 1991). Roger’s recognized that environmental and social factors (introjected conditions of worth) could inhibit or distort the process of actualization so that a negative rather than positive outcome may occur, but also that the fully functioning person is ‘soundly and realistically social’ (Rogers 1961 c) Rogers postulated that therapeutic movement will only occur if, and only if, 6 conditions were in place between the therapist and client. The first condition of Person centred therapy is that therapist and client shouldShow MoreRelatedEvaluate the Claim That Person-Centred Therapy Offers the Therapist All That He/She Will Need to Treat Clients2368 Words   |  10 Pagesthis essay I have been asked to Evaluate the claim that Person-Centred therapy offers the therapist all that he/she will need to treat clients. In order to do this, I plan to firstly look at the theory of person-centred therapy, examining its roots and fundamental principles. Secondly, I will look at key criticisms of the model and evaluate the â€Å"weight† of such criticisms. Underlying Theory of Person-Centred Counselling The Person-Centred approach to counselling was pioneered by Carl Rogers inRead More‘Evaluate the Claim That Person-Centred Therapy Offers the Therapist All That He/She Will Need to Treat Clients.2461 Words   |  10 Pages‘Evaluate the claim that Person-Centred Therapy offers the therapist all that he/she will need to treat clients.’ The Person Centred approach is based upon the theory and philosophy of Carl Rogers. This approach in its set-up is familiar to the general public as it is depicted in the media and is often expected therefore that a counselling session would take place in this format. At first glance the counselling process which has derived from the theory of Rogers, in a real therapy situation appearsRead MoreEvaluate the Claim That Person-Centred Therapy Offers the Therapist All That He/She Will Need to Treat Clients2502 Words   |  11 Pagesthe claim that Person-Centred Therapy offers the therapist all that he/she will need to treat clients† The humanistic movement was established as a way to expand and improve upon the two other schools of thought; behaviourism and psychoanalysis, which had, up until the first half of the 20th century dominated psychology. An American theorist called Abraham Maslow began to research creativity in humans through art and science. He first introduced his concept of a hierarchy of needs in his 1943 paperRead More‘’Evaluate the Claim That Person-Centred Therapy Offers the Therapist All That He/She Will Need to Treat Clients‘’.2560 Words   |  11 PagesIndisputably, in recent years there has been an influx in people seeking therapy for a multitude of reasons relating to personal growth, marital or family conflict and work dissatisfaction to name a few. One of the recognized theories of counselling today was developed by the humanistic psychologist Carl Rogers in the 1940s and although this new approach to psychotherapy ran contrary to the theories dominant at the t ime, person-centred therapy is considered one of the major therapeutic approaches nowadaysRead MorePerson centred therapy2630 Words   |  11 Pages 5th November 2013 Essay 1: ‘Evaluate the claim that Person–Centred Therapy offers the therapist all that he/she will need to treat clients’. In this essay I will look at the benefits and the disadvantages of person-centred therapy and consider whether it provides sufficient tools for the therapist to be effective in the treatment of the client. Looking at the underlying theory (self-actualisation, organismic self, conditions of worth etc), andRead MoreEssay 1 Person Centred Therapy2836 Words   |  12 Pagesï » ¿Evaluate the claim that Person-Centred Therapy offers the therapist all that he/she will need to treat clients. Introduction In this essay I will look at the claim that Person-Centred Therapy offers the therapist all that he/she will need to treat clients. Firstly, I will outline what Person-Centred therapy is and look at what its originator, Carl Rogers’, theories behind this approach are. I will then discuss some of the criticisms that have been made about Person-Centred Therapy, and weigh them upRead MoreEvaluate the Claim That Person Centered Therapy Offers Tthe Therapist All That He/She Need to Treat Clients2987 Words   |  12 PagesModule one | Tutor | Jackie Smith | Essay Title / Work | â€Å"Evaluate the claim that Person-Centred Therapy offers the therapist all that he/she will need to treat clients† | Word Count | 2723 | INTRODUCTION My aim is to explore Carl Rogers theory that Person Centred Therapy was a complete system for therapists to offer help in a counselling way to clients presenting with a full variety of issues. I will do this by establishing my understanding of the basicRead More‘’Evaluate the Claim That Person-Centered Therapy Offers the Therapist All That He/She Will Need to Treat Clients’’2428 Words   |  10 Pageswords Course code: ‘’Evaluate the claim that Person-centered therapy offers the therapist all that he/she will need to treat clients’’ This essay is intended to explore the statement that Person-centered therapy offers therapists all they need to treat clients. In order to do this I intend to further explore the opinions of other individuals practicing and researching counseling therapies. My first thoughts are that if the Person centered approach was sufficient, there might not haveRead MoreA Long Term Care Home2736 Words   |  11 PagesBackground Lily lived in a long-term care home for almost two years. She and her husband Arthur have been married for 52 years and have had a very close relationship. They didn’t have any children. Lily’s husband would visit her in the care home twice a day. Over the course of a few months Lily’s condition began to deteriorate. She wouldn’t accept food and fluids and she died peacefully with her husband present. Arthur had a memorial service for Lily, but few friends came. Arthur had stopped visitingRead MoreModels of Counselling Within My Context2989 Words   |  12 Pagesways, and different forms of helping people. Helping others could make another person feel better either inside, or about them self. ‘Helping’ is one of those taken for granted words. It is a familiar part of our vocabulary. Traditionally, for example, social workers, youth workers and support workers, guidance counsellors and psychologist have been talked about as members of the help ing professions. The question, do you need some help? Should be part of our daily business as informal and formal educators

Of freindship Essay Example For Students

Of freindship Essay It had been hard for him that spake it to have put more truth and untruth together in few words, than in that speech, Whosoever is delighted in solitude, is either a wild beast or a god. For it is most true, that a natural and secret hatred, and aversation towards society, in any man, hath somewhat of the savage beast; but it is most untrue, that it should have any character at all, of the divine nature; except it proceed, not out of a pleasure in solitude, but out of a love and desire to sequester a mans self, for a higher conversation: such as is found to have been falsely and feignedly in some of the heathen; as Epimenides the Candian, Numa the Roman, Empedocles the Sicilian, and Apollonius of Tyana; and truly and really, in divers of the ancient hermits and holy fathers of the church. But little do men perceive what solitude is, and how far it extendeth. For a crowd is not company; and faces are but a gallery of pictures; and talk but a tinkling cymbal, where there is no love. The Latin adage meeteth with it a little: Magna civitas, magna solitudo; because in a great town friends are scattered; so that there is not that fellowship, for the most part, which is in less neighborhoods. But we may go further, and affirm most truly, that it is a mere and miserable solitude to want true friends; without which the world is but a wilderness; and even in this sense also of solitude, whosoever in the frame of his nature and affections, is unfit for friendship, he taketh it of the beast, and not from humanity. A principal fruit of friendship, is the ease and discharge of the fulness and swellings of the heart, which passions of all kinds do cause and induce. We know diseases of stoppings, and suffocations, are the most dangerous in the body; and it is not much otherwise in the mind; you may take sarza to open the liver, steel to open the spleen, flowers of sulphur for the lungs, castoreum for the brain; but no receipt openeth the heart, but a true friend; to whom you may impart griefs, joys, fears, hopes, suspicions, counsels, and whatsoever lieth upon the heart to oppress it, in a kind of civil shrift or confession. It is a strange thing to observe, how high a rate great kings and monarchs do set upon this fruit of friendship, whereof we speak: so great, as they purchase it, many times, at the hazard of their own safety and greatness. For princes, in regard of the distance of their fortune from that of their subjects and servants, cannot gather this fruit, except to make themselves capable thereof they raise some persons to be, as it were, companions and almost equals to themselves, which many times sorteth to inconvenience. The modern languages give unto such persons the name of favorites, or privadoes; as if it were matter of grace, or conversation. But the Roman name attaineth the true use and cause thereof, naming them participes curarum; for it is that which tieth the knot. And we see plainly that this hath been done, not by weak and passionate princes only, but by the wisest and most politic that ever reigned; who have oftentimes joined to themselves some of their servants; whom both themselves have called friends, and allowed other likewise to call them in the same manner; using the word which is received between private men. L. Sylla, when he commanded Rome, raised Pompey after surnamed the Great to that height, that Pompey vaunted himself for Syllas overmatch. For when he had carried the consulship for a friend of his, against the pursuit of Sylla, and that Sylla did a little resent thereat, and began to speak great, Pompey turned upon him again, and in effect bade him be quiet; for that more men adored the sun rising than the sun setting. With Julius CÃÆ'ƒÂ ¦sar, Decimus Brutus had obtained that interest, as he set him down, in his testament, for heir in remainder, after his nephew. And this was the man that had power with him, to draw him forth to his death. For when CÃÆ'ƒÂ ¦sar would have discharged the senate, in regard of some ill presages, and specially a dream of Calpurnia; this man lifted him gently by the arm out of his chair, telling him he hoped he would not dismiss the senate, till his wife had dreamt a better dream. And it seemeth his favor was so great, as Antonius, in a letter which is recited verbatim in one of Ciceros Philippics, calleth him venefica, witch; as if he had enchanted CÃÆ'ƒÂ ¦sar. Augustus raised Agrippa though of mean birth to that height, as when he consulted with MÃÆ'ƒÂ ¦cenas, about the marriage of his daughter Julia, MÃÆ'ƒÂ ¦cenas took the liberty to tell him, that he must either marry his daughter to Agrippa, or take away his life; there was no third way, he had made him so great. With Tiberius CÃÆ'ƒÂ ¦sar, Sejanus had ascended to that height, as they two were termed, and reckoned, as a pair of friends. Communism (2628 words) EssaySo as there is as much difference between the counsel, that a friend giveth, and that a man giveth himself, as there is between the counsel of a friend, and of a flatterer. For there is no such flatterer as is a mans self; and there is no such remedy against flattery of a mans self, as the liberty of a friend. Counsel is of two sorts: the one concerning manners, the other concerning business. For the first, the best preservative to keep the mind in health, is the faithful admonition of a friend. The calling of a mans self to a strict account, is a medicine, sometime too piercing and corrosive. Reading good books of morality, is a little flat and dead. Observing our faults in others, is sometimes improper for our case. But the best receipt best, I say, to work, and best to take is the admonition of a friend. It is a strange thing to behold, what gross errors and extreme absurdities many especially of the greater sort do commit, for want of a friend to tell them of them; to the great damage both of their fame and fortune: for, as St. James saith, they are as men, that look sometimes into a glass, and presently forget their own shape and favour. As for business, a man may think, if he will, that two eyes see no more than one; or that a gamester seeth always more than a looker-on; or that a man in anger, is as wise as he that hath said over the four and twenty letters; or that a musket may be shot off as well upon the arm, as upon a rest; and such other fond and high imaginations, to think himself all in all. But when all is done, the help of good counsel is that which setteth business straight. And if any man think that he will take counsel, but it shall be by pieces; asking counsel in one business, of one man, and in another business, of another man; it is well that is to say, better, perhaps, than if he asked none at all; but he runneth two dangers: one, that he shall not be faithfully counselled; for it is a rare thing, except it be from a perfect and entire friend, to have counsel given, but such as shall be bowed and crooked to some ends, which he hath, that giveth it. The other, that he shall have counsel given, hurtful and unsafe though with good meaning, and mixed partly of mischief and partly of remedy; even as if you would call a physician, that is thought good for the cure of the disease you complain of, but is unacquainted with your body; and therefore may put you in way for a present cure, but overthroweth your health in some other kind; and so cure the disease, and kill the patient. But a friend that is wholly acquainted with a mans estate, will beware, by furthering any present business, how he dasheth upon other inconvenience. And therefore rest not upon scattered counsels; they will rather distract and mislead, than settle and direct. After these two noble fruits of friendship peace in the affections, and support of the judgment, followeth the last fruit; which is like the pomegranate, full of many kernels; I mean aid, and bearing a part, in all actions and occasions. Here the best way to represent to life the manifold use of friendship, is to cast and see how many things there are, which a man cannot do himself; and then it will appear, that it was a sparing speech of the ancients, to say, that a friend is another himself; for that a friend is far more than himself. Men have their time, and die many times, in desire of some things which they principally take to heart; the bestowing of a child, the finishing of a work, or the like. If a man have a true friend, he may rest almost secure that the care of those things will continue after him. So that a man hath, as it were, two lives in his desires. A man hath a body, and that body is confined to a place; but where friendship is, all offices of life are as it were granted to him, and his deputy. For he may exercise them by his friend. How many things are there which a man cannot, with any face or comeliness, say or do himself? A man can scarce allege his own merits with modesty, much less extol them; a man cannot sometimes brook to supplicate or beg; and a number of the like. But all these things are graceful, in a friends mouth, which are blushing in a mans own. So again, a mans person hath many proper relations, which he cannot put off. A man cannot speak to his son but as a father; to his wife but as a husband; to his enemy but upon terms: whereas a friend may speak as the case requires, and not as it sorteth with the person. But to enumerate these things were endless; I have given the rule, where a man cannot fitly play his own part; if he have not a friend, he may quit the stage.

Capital Structure and Wacc Calculation free essay sample

In 2008, the company continued to set the pace for industry growth. Revenues as well as per-share earnings increased during this period. The company strengthened its position in key consumer segments and returned value to stockholders through two means – stock buybacks and strong dividends. Highlights of the company’s 2008 financial performance include consolidated revenues that were up more than 4% over the previous year, reported EPS growth at 11. % to $2. 16 per share, return of $15. 6 to shareholders through share buybacks and strong dividends. About 43. 8% of the total capital of the company comes from debt and the remaining comes from equity. The cost of the different components of its capital structure are – debt: 2. 92% (after-tax cost), and equity: 9. 49%. The WACC is 6. 61%, based on the capital structure outlined. The effective tax rate is 35. 4%. ATT has had dividend growth for the last 25 years. The dividend growth this year was 2. % and the last yea r was 12. 7%. Dividends declared totalled . 61 per share in 2008, $1. 465 per share in 2007 and $1. 35 per share in 2006. The dividend policy considers both the expectations and requirements of stockholders, internal requirements of ATT and long-term growth opportunities. Introduction ATT is the largest communications holding company in the world by revenue. It is also one of the largest companies on the Fortune 500 and Fortune Global 500 lists. In 2008, the company had reported consolidated revenue of $124 billion. Randall L. Stephenson is the chairman and chief executive officer of ATT, whose global headquarters are in Dallas, Texas, USA and the company employs a workforce of over 294,000 worldwide. ATT is America’s fastest 3G network serving 81. 6 million customers. The company’s offerings include voice coverage in more than 215 countries, data roaming in more than 185 and 3G in more than 100 countries. ATT is the U. S. ireless carrier for the new iPhone 3GS, which launched in June 2009 and revolutionized the industry. It is also the only U. S. national service provider to offer a 100 percent IP-based television service with U-verse TV and the USAs largest provider of broadband — more than 17. 1 million high speed Internet subscribers (as of 3Q09). Apart from broadband, ATT is also the largest Wi-Fi provider, offering customers access at more than 125,000 hot spots spanning countries around the world. ATT is one of the worlds largest providers of IP-based communications services for businesses, with an extensive portfolio of Virtual Private Network (VPN), Voice over IP (VoIP) and other offerings, as well as the USAs largest directory publisher, delivering print directories to 173 million. The company is also the leading U. S. provider of local and long distance voice services and a world leader in the transport and termination of wholesale traffic — widely recognized for its industry-leading wholesale services portfolio. In 2008, the company continued to set the pace for industry growth. Revenues as well as per-share earnings increased during this period. The company strengthened its position in key consumer segments and returned value to stockholders through two means – stock buybacks and strong dividends. Highlights of the company’s 2008 financial performance include consolidated revenues that were up more than 4% over the previous year, reported EPS growth at 11. 3% to $2. 16 per share, return of $15. 6 to shareholders through share buybacks and strong dividends. Financial statements We have reproduced below, the financial statements of the company from its 2008 annual report. Debt consists of the borrowings of the company, in the form of notes, bonds, bank loans and other loans taken on by the company. A company must pay interest on its loans, which is the cost of borrowing the funds. The rate of interest paid represents the cost of this borrowing to the company and hence the cost of this component of the company’s capital structure. Equity consists of the capital invested by owners of the company’s stock; equity includes common share capital, retained earnings and additional paid-in capital. The sum of these three forms the shareholders’ equity portion of a company’s balance sheet. The returns to equity for an investor come from two sources – capital appreciation and dividends. Capital appreciation is the increase in the value of the ownership position in the company. Dividends are the periodic earnings distribution done by the company. The cost of equity is the required rate of return on the stock. Preferred stock is a special kind of stock which pays fixed dividends to its owners. A preferred stock does not include any voting rights, and preferred stock holders have a superior claim to company earnings than common stock holders, i. e. preferred stock holders must be paid off before earnings can be distributed to the common stock holders. The amount of debt present in a company’s capital structure is referred to as financial leverage. There is a trade-off involved here – the higher the amount of debt, the higher the financial risk, i. e. the risk of bankruptcy as there is a higher chance that the company may not be in a position to fulfil its financial obligations; however, a higher debt component in a company’s capital structure also means possibility of higher returns as the returns required on debt are lower than those required on equity. Calculating the capital structure of ATT All figures are in millions of $ Calculate the total debt: Debt maturing within one year 14119 Long-term debt 60872 Total Debt 74991 Total shareholders’ equity from balance sheet: Shareholders equity 96347 Total capital calculated as the sum of individual capital components: Total Debt 74991 Shareholders equity 96347 Total Capital 171338 Proportion of each component in the capital structure is calculated as follows: Total Debt 74991 74991 / 171338 0. 438 Shareholders equity 96347 96347 / 171338 0. 562 Total Capital 171338 1. 000 Capital structure of ATT: Capital Component Proportion in capital structure Debt 0. 438 Equity 0. 562 Cost of capital WACC or weighted average cost of capital is the average cost of the company’s capital weighted for the amounts of each type of capital in the capital structure. WACC = (Required Return on equity * proportion of equity) + (Required Return on preferred * proportion of preferred) + Required Return on debt * proportion of debt * (1-tax rate)) The required return on equity is given by solving the DDM (Dividend Discount Model) equation for k: Cost of equity = (D1 / P0) + g Similarly, the cost of preferred stock is given by the yearly dividend d ivided by the market price of the stock. Cost of preferred stock = Dp / P0 The cost of debt is the after-tax interest rate paid by the company on its debt. Cost of debt = Interest rate paid on debt * (1 – tax rate) We multiply the interest rate (required return) on debt by (1-tax rate) because the interest paid on debt is deducted while calculating taxable income. Calculating the cost of capital of ATT Effective tax rate = 35. 4% [available in annual report] Dividend growth rate = 2. % [available in annual report] Current value of ATT stock (NYSE:T) = $27. 32 [available online] Interest expense = 3390 [from income statement] Dividend per share = $1. 61 [from financial statements] Earnings per share = $2. 17 [from financial statements] Net income = 12867 [from income statement] Interest rate on company’s debt = (Interest expense / Total debt) = (3390/74991) = 4. 52% After-tax cost of debt = (1-tax rate) * pre-tax cost of debt = (1 – 0. 354) * 4. 52% = 2. 92% Sust ainable growth rate (g) = Return on Equity * Retention Ratio = (Net income / shareholders’ equity) * (1 (DPS/EPS) ) = (12867 / 96347) * (1- (1. 61/2. 17) ) = 3. 4% Cost of equity = (D1 / P0) + g = (Expected dividend for next year / Share price) + growth rate = (D0 * (1+g) / P0) + g = ((1. 61* 1. 034) / 27. 32) + 0. 034 = 9. 49% WACC = (2. 92% * 0. 438) + (9. 49% * 0. 562) = 6. 61% Component Cost Debt 2. 92% Equity 9. 49% WACC = 6. 61% Dividend policy ATT has had dividend growth for the last 25 years. The dividend growth this year was 2. 5% and the last year was 12. 7%. Dividends declared totalled $1. 61 per share in 2008, $1. 465 per share in 2007 and $1. 35 per share in 2006. The dividend policy considers both the expectations and requirements of stockholders, internal requirements of ATT and long-term growth opportunities. ATT intends to provide the financial flexibility to allow their Board of Directors to consider dividend growth and to recommend an increase in dividends to be paid in future periods. All dividends are subject to approval by the Board of Directors. The dividends paid by the company in the last three years are given below: Year Payment Date Record Date Amount 2009 11-02-09 10-09-09 $0. 41 08-03-09 07-10-09 $0. 41 05-01-09 04-09-09 $0. 41 02-02-09 01-09-09 $0. 41 2008 11-03-08 10-10-08 $0. 40 08-01-08 07-10-08 $0. 40 05-01-08 04-10-08 $0. 40 02-01-08 01-10-08 $0. 40 2007 11-01-07 10-10-07 $0. 355 08-01-07 07-10-07 $0. 355 05-01-07 04-10-07 $0. 355 02-01-07 01-10-07 $0. 355 As seen clearly, the dividends are paid in equal quarterly instalments. The dividend policy of ATT is well-defined and well-balanced for optimal growth as well as investor satisfaction. Analysis ATT is one of the biggest companies in the world and a pioneer in the world of communications technology and services. The company has paid dividends which have been growing year-on-year for the past 25 years. ATT as a company is an attractive choice for an investor. The company’s capital structure has 43. 8% of debt and the rest is equity. The company enjoys a low-rate on its debt, thanks to its high credit rating and promptness in paying off liabilities. The cost of the different components of its capital structure are – debt: 2. 92% (after-tax cost), and equity: 9. 49%. The WACC is 6. 61%, based on the capital structure outlined above. The amount of leverage represented by the company’s debt ratio is quite adequate to successfully make use of the low cost of debt, while at the same time not high enough to require investors to undertake significant financial risk. The return on equity was 13. 35% and the retention ratio was 25. 8%. The sustainable growth rate of the company, calculated as the product of return on equity and retention ratio of earnings is a healthy 3. 4% The company’s finances are well-managed and so are the operations. Conclusion ATT has a debt ratio of 43. 8%, a suitable level of financial leverage just shy of the halfway mark. This level of leverage allows the company to take advantage of the lower interest needed on its debt, thus increasing its returns on capital, while at the same time avoiding the problems of financial risk associated with over-leveraging. The company’s weighted average cost of capital is 6. 61%. The dividend policy places a high degree of importance on both long-term growth as well as investor satisfaction, as witnessed by the 25 years of continuous dividend growth that the company has exhibited. The company has a decent growth rate of 3. % and a healthy retention ratio suggests that the company’s management team sees good scope for long-term growth. The dividend policy reflects this stress on both investor satisfaction as well as long-term growth. A balance of both these objectives decides the dividend payout on a yearly basis. There have been significant fluc tuations in the rate of increase of dividends. This could be due to changing outlook in the industry as well as external economic conditions such as business cycles. Overall, ATT is a company with a rich history and very high brand equity. The company has been displaying profitable performance for the past several years.