Media Representations Of Sexual Offenders In General Media Essay

Media Representations Of Sexual Offenders In General Media Essay The mass media is known to be one of the most influential sources of providing news to members of the public. It is also known to have a powerful impact on the public perceptions of specific issues, for example sex offenders (Brayford Deering, 2012). In order for a story to enter any form of the mass media, it needs to meet certain newsworthy criteria which will help media companies to entice greater audiences, thus increasing overall profit (Galtung Ruge, 1965). Female sexual offending is one particular issue within society which fits all the aspects of the newsworthy criteria. The cases tend to include a sense of seriousness and negativity in which so many of the medias audiences are interested to read/hear about (Greer, 2003). This chapter will focus on how the media represents FCSOs, with particular reference to the Vanessa George case. It will also examine how the mass media are able to influence public perceptions of FCSOs. It is important to note that the majority of academi c research involving Child Sexual Offenders and the media focuses on Sexual Offenders in general, rather than specifically FCSOs, therefore this chapter will adapt from the limited research available. Child Sexual Offenders have longingly received large amounts of negative coverage by the mass media, causing a topic for public debate (Kitzinger, 2004). The media often uses tactics in the form of emotive language, and imagery etc. to influence how the public view certain criminals. One example of this is the use of the iconic image of Myra Hindley within the media reports, which have shaped the way in which society imagines what FCSOs look like (ibid). Even though this was proved to be a co-offending case, it has historically shown how society can view any female involved in these sorts of crimes as going against the traditional gender scripts that woman are incapable of committing such crimes. This relates to the theory used by many feminists that argue that women are described as being double deviant, this is where women who commit crimes receive harsher treatment by society as they not only breach the law, but also break feminine norms (Heidensohn, 1987). Thus in terms of FCSOs, it would seem that they should be regarded as the worst form of criminals due to the extreme ways they break the feminine gender roles. This theory could explain why FCSOs receive such negative portrayals within the media. However, a counter argument of this is that females involved in child sexual offending are often viewed by the general public as harmless, and do not perceive their involvement as a form of abuse. Therefore, media cannot possibly provide such negative representations of FCSOs, if they do not believe themselves that FCSO is a problem within society. This is supported by Denov (2002), who states that the public perceive FCSOs to be less serious than male sexual offenders, this could be due to the common belief that women cannot be capable of committing such offenders. Thus the media are likely to also hold such views and focus their attention primarily on issues in society involving male sexual offenders, as they try to serve the interests of the public. 3.2 How the media influence public perceptions of FCSO It has been argued by many academics that the media influence the publics perception of FCSOs, in a way that can be described as a drug, injecting their opinions directly into the minds of its audience. This is often referred to as the hypodermic syringe model (Kitzinger, 2004). This can be argued to hold a powerful effect, as the amount of emotion produced by these offences could be why the media choose to report on it. As a result of, it causes out bursts of street anger and violence which can be described as a moral panic, creating hysteria (Thomas, 2005; Cohen, 1972) among the public. However, evidence suggests that this has only been presented from the rarity of FCSO cases that are reported on, as the majority of the time society has a blind spot for female perpetrated sexual abuse. This is due to the care-giving roles in which females are socialised to hold towards children (Finkelhor et al. 1988), which again have a habit of being represented in forms of the media; films, news reports, TV etc. Therefore, it could be argued that depending on what ideology the media decide to report on with regards to FCSOs, their portrayal will have a significant impact on how the rest of society view them. 3.3 Media representations of FCSO Historically FCSOs have rarely been reported on within media. This may be due to the myth that abuse by a female is seen as harmless and a confused for of love (Gannon Cortoni, 2010), therefore is not necessarily viewed as inflicting damage on a child, so the media are less likely to report on these cases as they do not fit the newsworthy criteria discussed earlier in the chapter. This could also be a reason why the public generally hold a lack of knowledge around the issues surrounding female child sexual offending. As Strickland (2008) argues, men are traditionally viewed as being the ones to commit criminal offences with aggressive personalities. Consequently, it can be argued that these stereotypes are what make it easy for the media to report on issues, and cases which match these stereotypes that society hold. As indicated in Chapter one (Intro), any abuse by females was usually referred to in the media as a relation or affair (Tsopelas et al, 2012) compared to if the perpetra tor is a man in which case the reporters often refer to them as abusers, again resulting in a lack of reports on cases perpetrated by females. This issue resorts academics to ask the question of whether female perpetrated child sexual abuse is simply underreported by the media due to the above reasons, or if it is so uncommon that there is not enough cases for the media to actually report on. Nowadays the increasing amount of knowledge and awareness on issues of female child sexual offending has roused strong societal reactions, resulting in the increased coverage of them in the media. Gakhal Brown (2011) report on how newspapers portrayed female child sexual perpetrators as evil monsters. This has taken a dramatic change from how they were previously portrayed, and has given society a new way of viewing a serious problem that has come to light. One of the most dramatic cases which the media has widely covered is that of Vanessa George. She was a 40-year-old mother of two who worked at a nursery in Plymouth. In December 2009 she was convicted of sexual assault, the making of and being in possession/distributing indecent images of children, and was given an indeterminate prison sentence with a minimum requirement of seven years. In November 2010, there was a serious case review conducted into the case (PSCB, 2010), and it was discovered that the nursery provided an ideal environment for the abuse to be carried out. It found that certain gaps within the system allowed Vanessa to commit these offences, such as the nurserys phone line being out of order, allowing workers to bring their own mobile phones into the nursery for emergencies. This opportunity presented Vanessa with an excuse enabling her to have her phone in the nursery and thus enabled her to take indecent images of the children. It was also discovered during the investigation of the case that she was in fact part of a co-offending trio, initiated by a male perpetrator named Colin Blanchard from Rochdale. In the serious case review, it was noted that Vanessa had no previous convictions and the abuse only started when she became in contact with Colin over the internet, and was manipulated into committing abuse and then sharing images with him. These particular facts of the case were however expressed in a completely different manner throughout the media reporting on the case. 3.4 Vanessa George case In chapter one it was indicated through the study by Mathews et al. (1989) that there is substantial evidence to suggest that many FCSOs actually target victims who are male adolescents, viewing their abuse as harmless. However, this is not the case when looking at the case of Vanessa George (BBC News, 2010). Across all the media coverage on this case it highlighted the serious issues surrounding female perpetrated sexual abuse which are present in the UK, and depending on the different media types, it was reported in extremely diverse ways. In order to understand how the media represent FCSOs, a comparison needs to be made between the various media types using critical discourse analysis. There are many different definitions of critical discourse analysis, however, within this dissertation we refer to it as the analysis of language used in speech and writing within forms of the media as a form of social practice, where specific ideologies are reproduced through the language in the texts (Wodak Meyer, 2009). This method is appropriate for this dissertation as it is a way in which we can analyse the language used by the media when reporting on FCSOs, and uncover the hidden ideologies in the text which is used to change the audiences opinion on the issue of FCSO. Almost every article written about FCSOs can be analysed using Critical Discourse Analysis, as reporters are required to make certain decisions as to how they want to represent particular ideologies in their article e.g. the terms they use to describe a FCSO, or which quotes to use from members of the public. These can all add to the way the ideology in the text is portrayed overall and thus how these ideologies affect society as a whole (Richardson, 2007). The three main articles analysed were drawn from three different news outlets which hold conflicting ideological stances. Firstly, Public enemy number one was taken from The Sun (Coles, 2011), a newspaper which represents right-wing principles. Secondly, Vanessa George jailed for child sex abuse was extracted from The Guardian (Morris, 2009) which expresses mostly liberalism interests. Finally, Little Teds was ideal place for Vanessa George abuse traced from BBC News online (2010b), which is commonly known to represents a centrism approach to reporting. The Sun, known for its exaggeration of the truth in order to attract the attention of more readers, reports on the case of Vanessa George as being one that has caused so much outrage and shock from the public, that the police actually needed to step in to stop the amount of abuse aimed at her from the public. The way the article presents these dramatic views is interesting for Critical Discourse Analysis, as it is outwardly bias in presenting only the feelings expressed by the parents of possible victims, rather than facts on the case. Therefore, the analysis made, might be able to support the theory that the facts on the case are actually spun to present a particular viewpoint in this case, that FCSOs are extremely disturbing to society and uses particular language which is aimed to influence their audience into holding the same opinions. This is evident in the following quotes: Public enemy number one, Sick b****, The van taking Vanessa George to prison is attacked (See appendix 1 for more examples). All of the following use emotive language to express the disgust and anger felt by many members of the public. This supports Gakhal Browns (2011) argument that the media provide stereotypical portrayals of all sex offenders in general, using words linked with monsters evil perverts. Moreover, these choice of language in articles help provide a negative perception of FCSOs. The fact that the reporter purposely used a collective noun in the article title Public enemy number one-, suggests that they are trying to provide an ideology that Vanessa is hated by all members of the public, and that the audience should also imitate these feelings. While analysing this article, it was found that the only quotations and opinions used, were that of parents involved in the case, who naturally hold bias views. This, itself shows how the reporter wanted to present only one ideological viewpoint. Furthermore, it can be argued that this negative portrayal of Vanessa George, a FCSO, in the media reinforces the argument previously put forward by Heidenson (1987) regarding female offenders as displaying double deviance. On the other hand, the article in The Guardian expresses a more balanced stance, presenting the audience with facts of the case. Its use of imagery shows how Vanessa was part of a co-offending trio, and although she solely committed the abuse in Little Teds nursery, she was in fact in contact with two others; one (Colin Blanchard) who, as argued by the reporter, was coercing her to commit the offences. They reported that Vanessa was besotted with him. Therefore, it shows that the ideology in which this news article is trying to present is not just about viewing FCSOs in a negative light, but more that they want to present the factual issues that society is facing, for example the influence male sexual offenders have on females to force them to also commit sexual offences. However, when analysing this article, it can be argued that it is somewhat bias, as it uses post-modified terms such as paedophile which often disguises the fact that the choice to commit these crimes is not just do wn to sexual preference but is actually a way in which an offender exploits and holds power over children (Kelly, 1998). It also links to the same ideology presented in The Sun, by describing Vanessa in a negative light Cold and calculating. These quotes do, nonetheless, come from the Judge in charge of the case, thus using a more reliable source, than that used by the Sun, to reproduce the ideologies through language. The way in which The Guardian provides a balanced stance, can be argued to be similar to how the BBC reports on the case of Vanessa George. This is due to the way the BBC provide the facts of the case and refer to the serious case review (discussed earlier) as well as other reliable sources such as the councillor for Plymouths Efford and Lipson ward, in order to add to their own reputation of being a dependable source. When analysing this article it is clear that the reporters ideology behind this article is to provide the public with the facts, and try to prevent a moral panic among the public, by reporting on the positive responses professionals have had to the case. The reporter used passive verbs such as reassured, and quotations from Ofsted Ofsted has already implemented a number of changes, in order to show the public that society are able to learn from the mistakes made in this case in order to prevent future cases. However, the BBC used a disturbing criminal style image of Va nessa, which imitate the reporter techniques used in the Myra Hindley case, which, as discussed earlier, add to the stereotypical image of what FCSOs look like (Kitzinger, 2004). Therefore, it could be argued that no matter what type of media, there is always some form of bias in the way reporters want to present their ideology through the language and images they choose to use. Another observation made when analysing this article, is it subheading title Explicit culture, which then goes on to report on the co-offending details of the case. The fact that the reporter has used a subheading, as well as the chosen language, shows that they are trying to make their audience aware of the increasingly serious problem of co-offending child sexual offenders within society. From this Critical Discourse Analysis it is clear that all types of the mass media report in different ways; some use stereotyping FCSOs as a powerful influential tool, others are more objective by presenting the facts of the case. All, however, have had a positive impact as they have raised some new issues that society face with regards to FCSO. Although, a lot of work still needs to be done with all areas of the mass media, in order to educate reporters so that they appreciate the gravity of the issues surrounding FCSO and the traumatic results they can present both victims and general members of the public with, when providing representations on FCSOs (Tsopelas et al, 2012). Actively representing their voice

Rhone-Poulenc Rorer, Inc Case-Study

Almost every aspect of the complexity of the merger can be explained through Rhone-Poulenc’s financial constraints. RP’s motives to acquire Rorer were to create crucial capital for its own strategic entry into pharmaceuticals. RP could not buy Rorer either in cash or shares due to the following factors: First, RP had limited ability to pay with borrowed cash. The company was more levered than other firms in the industry. Rhone-Poulenc didn’t want to borrow all the cash because it would have affected in a negative way to its balance sheet despite the fact that it borrowed for the cash portion of the deal.Second, Rhone-Poulenc couldn’t pay with internally generated cash because, during the announcement time, RP was a net cash user in connection with its great capital spending requirements and the recession felling on chemicals markets. Third, RP could not pay with debt securities. It is logical that if the company was too highly levered to borrow and pay in cash, it was too highly levered to swap debt securities for shares. Fourth, Rhone-Poulenc could not pay with RP common shares or with cash raised from selling equity.A deal based on shares would not have been approved by old shareholders because the deal would have diluted the value of individual shares and it would have not been profitable because the RP’s management believed the company’s share price was undervalued. Rhone-Poulenc could not offer standard common stock because it didn’t have any, so it had to offer only nonvoting certificate of investment as a state-owned company as it was.2. In case of Rhone-Poulenc Rorer, Inc, the shareholders of Rorer received a CVR that enabled them to receive additional gains from the possible shortfall of the future stock price and to persuade the Rorer shareholders to continue as the minority equity investors in the Rhone-Poulenc Rorer, Inc. Rhone-Poulenc could not pay with RP common shares or with cash raised from selli ng equity. A deal based on shares would not have been approved by old shareholders because the deal would have diluted the value of individual shares and it would have not been profitable because the RP’s management believed the company’s share price was undervalued.Rhone-Poulenc could not offer standard common stock because it didn’t have any, so it had to offer only nonvoting certificate of investment as a state-owned company as it was. 3. The assumption is that RP is not going to use its right to extend the maturity of the CVRs, and they are thus expiring in July 31, 1993. We have used the binomial tree to value the CVRs as a put option. The value of a CVR is thus $5. 54, and the aggregate value is $231. 64 million. Secondly, we have calculated the value of the CVRs in August 1991, assuming this is the date when the case was written.In addition, I am still assuming that RP isn’t going to extend the maturity. I’ve used almost the same method as i n the previous calculation and the value of a CVR is $2. 78, and the aggregate value is thus $116. 34 million. 4. The investor can see the offering quite attractive. This is due to the fact that they now have limited their downside risks with the put option. This means the minority have an effective hedge against the possibility of failure of the upcoming merger. Rhone-Poulenc managed to entice all the shareholders of the acquired Rorer with its somewhat complicated three-stage transaction.The initial tender offer and giving the rights to control RP’s HPB was attractive enough for Rorer to accept the deal. The Contingent Value Rights gave the minority shareholders the rights they thought were valuable enough to close the deal. Rorer believed that the whole package was indeed worth of $36. 50 per share. Rorer benefited from the announcement of this deal and gained about $632 million in new value. However, RP’s non-voting common shares decreased 4. 4 percent, or $175 mil lion, in value. The fact is, all in all, that RP has a huge liability due to the CVRs.In the worst case scenario, the share price falls below $26. 00 and the liability would thus be ($49. 13 – $26. 00) * 41. 8 million = $966. 83 million, which is the maximum amount of RP’s liability. The maximum liability was perfectly hedged, providing RP a delta neutral position. Extra. RP would prefer the share price to stay higher than $49. 13 until 1993, and $53. 06 until 1994. This is because in these cases RP would not be obliged to pay CVR-holders the cash payments. Thus if the share price would be higher than $49. 13 in the expiration date of the CVRs, RP would not extend the maturity of the Contingent Value RightsIntroduction A merger between Rorer Group, Inc and the Human Pharmaceutical Business (HPB) of Rhone-Poulenc (RP) S. A. generated a major multinational pharmaceutical company, Rhone-Poulenc Rorer (RPR) on July 31, 1990. The expectations concerning takeover of Rorer ha d aroused in the late 1980s when the considerably low cash balance and rising level of debt seemed to slow down its strategy of growth by acquisitions. The rumors had reassurance in 1989 when Rorer made a bid to take over the pharmaceutical business of A. H. Robins and lost the opportunity.Just a short time after this, the $3. 2 billion merger of Rorer and RP was announced. A year later the company had shown rapid post-merger integration and initial synergy gains. RP had practically no position in the United States and Japan, but on the other hand it had a strong market share in some European Community markets. Thanks to Rorer’s U. S. connections, the new company ranked among the top three in Europe and had improved its position in the United States. Rorer’s Robert Cawthorn continued as RPR’s CEO and almost all the new senior executives came from Rhone-Poulenc.The markets expected RP to slowly take over the company because it owned 68% of RPR’s shares. Th e French government owned 100% of Rhone-Poulenc’s voting common stock. RP was the seventh largest chemical manufacturer in the world and it gave the minority shareholders a contingent value right (CVR) that promised to pay them on July 31, 1993, any shortfall between $49. 13 and the then prevailing stock price. Rorer Goup, Inc’s main factor in its growth strategy had been a program of acquisitions, because sales growth in the company’s existing product lines was characterized as mature.As usual, there were several skeptics associated to this merger. They were worried about the cultural integration and independence. The skeptics pointed out the company is French, yet the management team is mainly American, they have a American-style mission statement (â€Å"Our Mission is to become the BEST pharmaceutical company in the world by dedicating our resources, our talents, and our energies to help improve human health and the quality of life of people throughout the w orld†) and the lack of interest of the American executives to learn French. The market outlook for the industry wasn’t favorable for the company.The cost of new-product development in the industry was rising and yet the number of new drug applications worldwide had fallen. It was also predicted that the governments would get tougher on the cost of drugs in an effort to slow down rapidly rising health costs. Other risks to consider were patent expiration and competition from low-priced generic drug manufacturers and decreasing product life cycles. In turn, the world population was aging, analysts noted that computers and biotechnology were aiding new-product development and different analysts recommended to buy the RPR’s stock on the long term. . The $3. 2 billion merger was consummated in a three-stage transaction, by which Rhone-Poulenc obtained 68% of Rorer’s common stock (91. 6 shares), which was enough to permit Rhone-Poulenc to consolidate Rorerâ€⠄¢s results for financial reporting. First, Rhone-Poulenc would tender for 50. 1% (43. 2 million shares) of Rorer’s common stock for $36. 50 cash per share. Rhone-Poulenc increased its debt/capital ratio to 45% by borrowing the funds to finance the tender offer. The debt/capital ratio was considerably high compared to its competitors ratio of 20-30%.Second, Rorer assumed $265 million of RP debt (guaranteed by RP), made a $20 million cash payment to RP, and issued 48. 4 million new common shares to RP in exchange for RP’s HPB division. Analysts believed that Rorer’s bylaws would require at least 85% of all shares be voted in favor of the issuance of new shares and, more generally, of this entire transaction. Third, Rhone-Poulenc issued the 41. 8 million CVRs to the remaining minority shareholders in Rorer. A CVR entitled the holder to the right, at the end of three years (July 31, 1993) or four years, at RP’s option, to a cash payment of US$49. 13 (or $53. 6 if the payment were made at the end of four years) reduced by the higher of the value of the RPR share at that date or $26. Thus, if the value of the RPR share exceeded $49. 13 (or $53. 06), there would be no payment. The maximum amount of RP’s liability on December 31, 1990, was 5 165 million French francs at the date of the issuance of the rights. The maximum amount of RP’s liability at the date of issuance was hedged. Any changes in the value of the CVRs resulting from fluctuations in exchange rates, as well as the amortization of the cost of the hedge, were recorded directly into the consolidated equity of RP.The CVRs were quoted on the American Stock Exchange and traded independently of the shares of EPE, which were listed on the New York Stock Exchange. Rorer and RP jointly released its own estimate of the package value of CRV and minority share in RPR to be worth $36. 50 and thus equal to the price at which RP was offering for shares of RPR. Rorer’s in vestors responded positively to the merger arrangements. Rorer shares increased by 28% net of the changes in the Standard & Poor’s 500 index over the week during the week of the announcement. This gain equaled about $632 million in new value.Simultaneously, RP’s nonvoting common shares lost 4. 4% net of market during the announcement week, or about $175 million. Almost every aspect of the complexity of the merger can be explained through Rhone-Poulenc’s financial constraints. RP’s motives to acquire Rorer were to create crucial capital for its own strategic entry into pharmaceuticals. RP could not buy Rorer either in cash or shares due to the following factors: First, RP had limited ability to pay with borrowed cash. The company was more levered than other firms in the industry.Rhone-Poulenc didn’t want to borrow all the cash because it would have affected in a negative way to its balance sheet despite the fact that it borrowed for the cash portion of the deal. Second, Rhone-Poulenc couldn’t pay with internally generated cash because, during the announcement time, RP was a net cash user in connection with its great capital spending requirements and the recession felling on chemicals markets. Third, RP could not pay with debt securities. It is logical that if the company was too highly levered to borrow and pay in cash, it was too highly levered to swap debt securities for shares.Fourth, Rhone-Poulenc could not pay with RP common shares or with cash raised from selling equity. A deal based on shares would not have been approved by old shareholders because the deal would have diluted the value of individual shares and it would have not been profitable because the RP’s management believed the company’s share price was undervalued. Rhone-Poulenc could not offer standard common stock because it didn’t have any, so it had to offer only nonvoting certificate of investment as a state-owned company as it wa s.The form of the deal solved Rhone-Poulenc’s financial problems and it made possible for the firm to generate capital for its human pharmaceutical business and raise equity via obtaining Rorer’s shareholders to remain as minority equity investors in the Rhone-Poulenc Rorer, Inc. It would be natural to RP to want to issue equity for part of the deal but for the reasons mentioned above, it could not do so. 2. Contingent Value Right (CVR) is a type of right given to shareholders of an acquired company that ensures them to receive additional benefit if a specified event occurs.CVRs are handy tools that may help deal makers surmount challenging deal design problems. The use of CVRs is relatively rare, but they are useful when the seller company is seeking protection for the remaining minority shareholders who might be vulnerable to unfair treatment by the acquirer, the seller’s board may be concerned the buyer’s share price may not retain its value if the dea l’s projected synergies are not achieved, the integration is not smooth, or the buyer’s legacy business does not perform as expected.In case of Rhone-Poulenc Rorer, Inc, the shareholders of Rorer received a CVR that enabled them to receive additional gains from the possible shortfall of the future stock price and to persuade the Rorer shareholders to continue as the minority equity investors in the Rhone-Poulenc Rorer, Inc. Rhone-Poulenc could not pay with RP common shares or with cash raised from selling equity. A deal based on shares would not have been approved by old shareholders because the deal would have diluted the value of individual shares and it would have not been profitable because the RP’s management believed the company’s share price was undervalued.Rhone-Poulenc could not offer standard common stock because it didn’t have any, so it had to offer only nonvoting certificate of investment as a state-owned company as it was. Shareholder s selling their Rorer shares to Rhone-Poulenc were paid in three forms. They received totaling $1. 7 billion, shares in Rhone-Poulenc Rorer and CVRs. If, at the end of three years, the RPR share price did not exceed $98, Rhone-Poulenc had to pay CVR holders the difference between the share price and $98, to an upper limit of $46 per CVR.If the RPR share price was below $52 on August 1, 1993, RP would have to pay the CVR holders $1 billion (in FRF over 5 billion). By the end of 1991, the price of the CVR had fallen by 4/5 of its value. Its close at under $1 reflected the good performance of the group. RP took the opportunity to buy all the CVRs it had been offered. During the first year after issue, the group gathered in 20. 7 million CVRs, half the total number issued. 3. The assumption is that RP is not going to use its right to extend the maturity of the CVRs, and they are thus expiring in July 31, 1993.We have used the binomial tree (Exhibit A) to value the CVRs as a put option. The value of a CVR is thus $5. 54, and the aggregate value is $231. 64 million. I have assumed risk-free rate of 8. 20 percent, which is the yield of a 3-year U. S. Treasury note. The standard deviation was given, 18 percent, and we have used it to calculate u and d enabling me to calculate p also. We have used $36. 50 as S(0). Secondly, we have calculated the value of the CVRs in August 1991, assuming this is the date when the case was written. In addition, we are still assuming that RP isn’t going to extend the maturity.We have used almost the same method as above (Exhibit B) and the value of a CVR is $2. 78, and the aggregate value is thus $116. 34 million. Only difference is that we used 0. 172 (=0,18*(SQRT(11/12)) as standard deviation, since there is not full year until maturity. We have used 8. 09 percent as the risk-free rate, which is the yield of a 2-year Treasury note. The share price in August 1, 1991 was $45. 75, which is the value of S(0) in my calculations. As we can see, the value of the CVR is considerably smaller in the latter case, due to the decrease in the time value of the put option. 4. The investor can see the offering quite attractive.This is due to the fact that they now have limited their downside risks with the put option. This means the minority have an effective hedge against the possibility of failure of the upcoming merger. The investors are receiving a cash payment of $49. 13 (or $53. 06 in the case of RP extending the maturity) minus the then prevailing share price or $26. 00. In one hand their shares can gain possible extra value and in the other they have a limit for the possible losses. Rhone-Poulenc managed to entice all the shareholders of the acquired Rorer with its somewhat complicated three-stage transaction.The initial tender offer and giving the rights to control RP’s HPB was attractive enough for Rorer to accept the deal. The Contingent Value Rights gave the minority shareholders the rights they though t were valuable enough to close the deal. Rorer believed that the whole package was indeed worth of $36. 50 per share. Rorer benefited from the announcement of this deal and gained about $632 million in new value. However, RP’s non-voting common shares decreased 4. 4 percent, or $175 million, in value. The fact is, all in all, that RP has a huge liability due to the CVRs.In the worst case scenario, the share price falls below $26. 00 and the liability would thus be ($49. 13 – $26. 00) * 41. 8 million = $966. 83 million, which is the maximum amount of RP’s liability. The maximum liability was perfectly hedged, providing RP a delta neutral position. This is possible through adjusting the ratio of CVRs and RPR equity, in the case of price changes of these CVRs. Extra question RP would prefer the share price to stay higher than $49. 13 until 1993, and $53. 06 until 1994. This is because in these cases RP would not be obliged to pay CVR-holders the cash payments.Thus if the share price would be higher than $49. 13 in the expiration date of the CVRs, RP would not extend the maturity of the Contingent Value Rights. I have calculated the value of the CVRs in case the maturity is extended until 1994. The calculations are in the Exhibit C, and the value of a CVR is thus $5. 57 and the aggregate value is $232. 89 million. In 1993, if the share price is S(uud) = $43. 70, the CVRs’ maturity might be extended, because now there would be a possibility of the share price to increase to $52. 32 and the extension would have been preferable.

Current and Future Market Trends Essay

When thinking of wireless phone or internet service, the first company that probably comes to mind is Verizon Wireless. Verizon officially became a force to be reckoned with in the wireless market in 2000 when Verizon communications and Vodafone merged. Verizon states, â€Å"Verizon Communications Inc., headquartered in New York, is a global leader in delivering broadband and other wireless and wire line communications services to mass market, business, government and wholesale customers.† Since entering the market in 2000, Verizon has made itself popular by offering service in more areas than any other wireless network. Market Structure Within economics, four types of market structures exist. The four types are: monopoly, monopolistic competition, perfect competition, and oligopoly. Colander (2008) describes market structure as, â€Å"the physical characteristics of the market within which firms interact.† Verizon Wireless’ market structure can be defined by a combination of monopolistic competition and oligopoly. Colander (2008) defines monopolistic competition and oligopoly as, â€Å"a market structure in which there are many firms selling differentiated products and few barriers to entry—and oligopoly — a market structure in which there are only a few firms and firms explicitly take other firms’ likely response into account. The wireless industry is smaller that people think and not much competiton exists. For example: Cingular and AT&T are both wireless carriers, but Cingular is a part of AT&T. Essentially, when a consumer spends money with Cingular, it still goes to AT&T. Using an oligopoly structure has worked well for Verizon in the past and currently. Current and future market trends should not have any affect on the market structure of Verizon. New Companies Competition in the wireless industry has always been tough. It seems as though every month or few weeks, a new phone or new service is being unveiled by a well-know company or a company trying to get started. Besides  Alltell, Verizon is usually the company the competition seeks to compete with. To compete with Verizon most companies offer a service similar to Verizon for a cheaper price, or they offer a similar phone for a cheaper price. Verizon would not be affected heavily by any new companies entering the market, because Verizon is already established and consumers are already familiar with the brand. Aside from that, Verizon offers a number of services and slogans to keep their consumers interested. Some of the slogans used are: America’s largest and most reliable network, #1 in customer loyalty, and the worry free guarantee. Verizon does not have to worry about the competition, the competition should worry about Verizon. Prices One of the downsides to having wireless services and phones is the price. Since the introduction of cell phones, the price of phones and the price of service have risen significantly. On average, a contract for cell phone service with two lines would cost anywhere from $160 – $250, depending on the services the customer chooses. That price does not include the price of the phone which could be anywhere from $50 – $900. The prices to maintain the convenience of a cell phone are ridiculous, but it is a necessity that most individuals find it hard to live without. The current and future trend of the wireless industry shows the price of services and phones increasing. With that being said, despite the prices of phones and service, consumers will continue to pay the prices set by Verizon and other wireless companies. Technology Cell phones and services have definitely evolved over the years. Technology is one of the leading factors when consumers consider purchasing a phone or selecting a company as their wireless provider. Most cell phone users use text messaging, check email, and log onto social networking sites like facebook and myspace from their mobile phones. Like any other invention cell phones have evolved and become an important part of our lives. Televisions went from just being in homes to our cars. Computers were usually found in places such as: homes, offices, and libraries. Now cell phones are the more modern version of computers. Verizon has always made note of the changing trends when it comes to technology and the company has always delivered excellent products the consumer wants or needs. Productivity To maintain the position as the largest and most reliable wireless carrier, Verizon Wireless must spend money. The costs range from building the network, to maintaining the network. Costs include employees, equipment and technology needed to keep the company on top. The company makes decisions based on what the benefit will be in the long run. These decisions are made by researching trends and technology in the wireless market and changing tastes of the consumer. The company knows the catalyst of success is a strong network. The law of diminishing marginal productivity states as more of a variable input is added to an existing fixed input, eventually the additional output one gets from that additional input is going to fall (Colander 2008). I was not able to get information specific from Verizon Wireless that would help me graph out this law. The company has over 86,000 employees and made 56.8 billion dollars in profit for 2008 (about us 2009). Each year bonuses are given to employees based on individual performance and company performance. Last year the bonuses were based on the fact that the company made 12% in profits. In today’s economic times, the e profit achieved was outstanding and was above any other profits made in the wireless industry for 2008. Cost Structure Wages and Benefits Employees of Verizon Wireless are compensated well. The employees salary along with the benefits provided are above others employed in the wireless industry, according to David Brown an analyst at Verizon Wireless human resources. At Verizon Wireless a broad-banded structure is used to organize jobs and manage pay. There are six bands that range from A to F. Depending on the skills of the individual, he or she is usually hired in on the F band, which is a customer service representative, or assistant. The duties are usually task oriented. The next band is E, which is a coordinator or analyst, who are proven to work independently, usually on projects and technical functions. D band consists of level one managers, supervisors etcetera. C through A bands are the higher levels of management and CEO. Jobs are assigned to bands based on similar roles and levels of responsibility. The jobs themselves can be quite different in terms of what people do. Jobs in the same band are similar in terms of their impact on our business results, the decision-making authority of the employees who hold them, and the knowledge and skills required. VZW classifies a job as either salaried exempt or salaried non-exempt. Verizon Wireless provides medical, dental and vision benefits to employees at a reduced cost, but also provides at no cost an education benefit up to 8,000 per year, 401k contribution matching up to 6% and yearly performance bonuses as well as profit sharing if enrolled in 401k and a long term incentive program that is also based on company performance. Employees are a vital asset to Verizon Wireless and the salaries along with the benefits are designed to maximize performance. Cost Structure Fixed and Variable Costs Fixed costs are defined as costs that are spent and cannot be changed in the period under consideration (2008). Fixed costs for Verizon Wireless include buildings, warehouses used, and upkeep of cellular sites. Variable costs, or costs that change, include workers employed, contracts for equipment production, new technology etcetera. Verizon Wireless is a firm that sells produced goods to individuals, businesses and government (2008). The company’s main output is technology. The fixed costs dived by the variable costs equal the average costs of the company. As was stated earlier, last year Verizon Wireless made a 12% increase in profits from the year before. Most of the revenue occurred in the 4th quarter of the year with the release of the BlackBerry Storm touch screen device. The device was the answer to the I phone distributed by AT&T. Over 100,000 devices were sold on the first day of release alone. The cost of the device was 199.99, which is around 2 million dollars made in one day. The demand for the devices increased, and the company met the demand with more phones. According to the March 2009 newsletter given to the company for 4th quarter earnings, the CEO Lowell McAdam advised that Storm sales were the factor that  significantly raised the company’s profits and set the bar for future ventures. Price Elasticity of Demand The relation between the shift in quantity and shift in price of a product is known as price elasticity. â€Å"Price elasticity of demand is the calculation of the percentage change in quantity demanded divided by the percentage change in price† (Colander, 2008). Verizon Wireless has to make an effort to stay in synch with the pricing and offerings by their competition. Verizon Wireless must implement services and products that incorporate modern technology and are ground-breaking to compete in the wireless market and affordable in today’s economy. Impact of Government Regulations Verizon Wireless realizes the importance in ensuring that all regulations that are established by the Federal Communications Commission. Abiding by these regulations will guarantee that Verizon Wireless will keep providing long-standing benefits for the taxpayer and customers. Verizon Wireless trusts that the present structure â€Å"of auctioning spectrum licenses, with clearly defined, exclusive-use and flexible rights, is the right approach to spectrum policy† (Verizon Wireless, 2009). Although clear benefits towards allowing unlicensed use of spectrum is visible, that advance will not create the revenue for the United States Treasury or the best value for American economy. Broadband is one of the services provided by Verizon Wireless. Over the past ten years Broadband services have been used commercially. During that time the government has acknowledged the significance of implementing market-based motivations to persuade broadband usage and investment. â€Å"Rather than applying more-stringent regulations to telecommunications services and infrastructure, the FCC generally has applied an old wires, old rules; new wires, new rules philosophy towards broadband services and networks† (Verizon Wireless, 2009) By doing this, customers will reap in the benefits form the government’s decision to enhance incentives for broadband service providers to invest in better and superior broadband networks and services. â€Å"Investment and deployment in next-generation broadband networks – such as Verizon’s FiOS network – is happening at a remarkable pace, and consumers  now have more choices than ever before† (Verizon Wireless, 2009). Competitors Verizon Wireless has a substantial amount of competition in the wireless industry. Verizon competes with wireless companies such as T-Mobile, Sprint and AT&T. Verizon Wireless became the largest wireless service provider by beating out AT&T. Nonetheless, Verizon’s landline industry is affected by the large opposition of modern technology and tends to confront challenges from various other competitors with high speed internet and cable companies such as Time Warner Cable. Verizon Wireless has to make an effort to stay in synch with the pricing and offerings of its competitors. The Wireless industry is so competitive, equipment can outdate within a few months. Companies must develop wireless devices that are affordable as well as reliable. Supply and Demand Analysis Even with today’s economic challenges, many opportunities to create innovative new products to meet customer demand still abound. In a bold new step the company introduced its line of netbooks, mini lightweight laptop computers that consumers can take with them anywhere. The netbooks have all the functionality of a laptop, with the convenience of a smaller wireless device. The smaller size and the low price the netbooks are offered, is what today’s consumers are demanding. Tapping into this market gives Verizon Wireless a piece of the notebook and laptop market that was only accessible in the past by offering mobile broadband cards. The added revenue from this market keeps Verizon Wireless ahead of the competition. Verizon Wireless also has the opportunity to expand its coverage globally with the 3G UMTS, Quad Band GSM networks. This means that business travelers as well as consumers will now have access to roam on more networks in over 250 countries across the globe. Verizon Wireless strives to produce the best most reliable wireless voice and data coverage in the industry. In order to obtain that goal the company will have to gain customers faster than the competition, widen the revenue lead and lead in profitability. As long as Verizon stays on the right track, the company should not have any issues presently and in the future. Reference Page Colander, D (2008).Economics, Fifth Edition. McGraw-Hill/Irwin, New York, New York, 10020 Verizon Wireless. (2009). Corporate History/investor relations. Retrieved June 26th, 2009 from www.verizon.com.

Why Is Water the Universal Solvent

Water is known as the universal solvent. Here is an explanation of why water is called the universal solvent and what properties make it good at dissolving other substances. Chemistry Makes Water A Great Solvent Water is called the universal solvent because more substances dissolve in water than in any other chemical. This has to do with the polarity of each water molecule. The hydrogen side of each water (H2O) molecule carries a slight positive electric charge, while the oxygen side carries a slight negative electric charge. This helps water dissociate ionic compounds into their positive and negative ions. The positive part of an ionic compound is attracted to the oxygen side of water while the negative portion of the compound is attracted to the hydrogen side of the water. Why Salt Dissolves in Water For example, consider what happens when salt dissolves in water. Salt is sodium chloride, NaCl. The sodium portion of the compounds carries a positive charge, while the chlorine part carries a negative charge. The two ions are connected by an ionic bond. The hydrogen and oxygen in the water, on the other hand, are connected by covalent bonds. Hydrogen and oxygen atoms from different water molecules are also connected via hydrogen bonds. When salt is mixed with water, the water molecules orient so that the negative charge oxygen anions face the sodium ion, while the positive-charged hydrogen cations face the chloride ion. Although ionic bonds are strong, the net effect of the polarity of all the water molecules is enough to pull the sodium and chlorine atoms apart. Once the salt is pulled apart, its ions become evenly distributed, forming a homogeneous solution. If a lot of salt is mixed with water, it wont all dissolve. In this situation, dissolution proceeds until there are too many sodium and chlorine ions in the mixture for water to win the tug-of-war with undissolved salt. The ions get in the way and prevent the water molecules from completely surrounding the sodium chloride compound. Raising the temperature increases the kinetic energy of the particles, increasing the amount of salt that can be dissolved in the water. Water Doesnt Dissolve Everything Despite its name as the universal solvent there are many compounds water wont dissolve or wont dissolve well. If the attraction is high between the oppositely charged ions in a compound, then the solubility will be low. For example, most of the hydroxides exhibit low solubility in water. Also, nonpolar molecules dont dissolve very well in water, including many organic compounds, such as fats and waxes. In summary, water is called the universal solvent because it dissolves the most substances, not because it dissolves every single compound.