Critical Review Paper Expansion Term Example | Topics and Well Written Essays - 2500 words

Critical Review Expansion - Term Paper Example Their views are important for international political thought, because they influenced present international political economy theories and helped paved the debate on political ideology, particularly shaping the discourse on the concept of â€Å"civil society† and the rise of nation-states vis-a-vis â€Å"civil society.† Kant, Rousseau, Locke and Hobbes have diverging views on the relationship between the government and civil society, as well as the notions of slavery, sovereignty, direction of international politics, and peace, but they share somewhat similar beliefs in the role of education and the state of nature of humanity. Locke and Hobbes have diverging views on the relationship between the government and civil society. Hobbes believes that Europe has changed as a civil society through the evolution of the social contract. The Commonwealth only exists because of the Covenant between the people and the government or the state. Hobbes says in the Leviathan: â€Å" Essence of the Common-wealth; which (to define it) is ‘One Person, of whose Acts a great Multitude, by mutual Covenants one with another, have made themselves every one the Author, to the end he may use the strength and means of them all, as he shall think expedient, for their Peace and Common Defense.’† This statement shows that the main goal of the government is to ensure peace and national defense. The covenant or social contract, however, for Hobbes is absolute, where the state incorporates the wills of the individuals; the state is the body and individuals are just parts of it: â€Å"The only way to erect such a Common Power† is â€Å"to confer all their power and strength upon one Man, or upon one Assembly of men, that may reduce all their Wills, by plurality of voices, unto one Will† (Hobbes). This statement underscores that the social contract binds all individuals. On the one hand, it enforces plurality of wills. On the other hand, it means the precedence of the state over civil society. Locke confirms the same views as Hobbes and argues that Europe also changed because of the need for the social contract. Unlike Hobbes, Locke believes that people take part of social contracts merely to help adjudicate disputes between individuals or groups. He says: â€Å"And this is done, where-ever any number of men, in the state of nature, enter into society to make one people, one body politic, under one supreme government†¦to make laws for him, as the public good of the society shall require†¦Ã¢â‚¬  (Locke, Two Treatises on Government). From here, it is clear that Locke believes that it is the people or civil society that legitimizes the state; while for Hobbes, it is the government that legitimizes the existence of a peaceful civil society. My criticism of Hobbes is that he overlooks that the people make the government. The social contract binds the people, but the people can unbind some laws too in order to make the contract fit their changing needs and issues. I agree more with Locke, who reminds governments of their servitude to the civil society. It does not mean, however, that the civil society will also abuse its rights and fully void the social contract without due justifications. Moreover, Locke and Hobbes diverge on the notion of sovereignty. Locke argues that civil

Dividend Policy in Publicly Traded Companies Essay

Dividend Policy in Publicly Traded Companies - Essay Example For a firm with good future growth and investment opportunities, investors want the firm to put the earnings in other investment opportunities. Where as for a non growth company, investors would prefer present dividend income rather future capital gains which are uncertain. [2] Dividend policy of a firm will divide the earnings into two parts as Dividends and Retained Earnings. Dividends are paid to the investors as cash for their share of the assets of the company. Where as Retained Earnings are used to fund the long term growth of the company, which are used to generate future earnings. The percentage of Dividends distributed and Retained Earnings are determined by the Payout Ratio of the Dividend Policy. Higher the Payout ratio, higher the Dividends and lower the Payout Ratio imply lower the Dividends. Usually growth oriented firms have lower payout ratio and higher Retention Ratio. That means large amount of earnings are retained to increase future earnings. The investors of low dividend paid companies will get their returns through capital gains. The relation between growth and Payout Ratio can be best understood by Dividends on one hand increase cash earnings of the investors and reduce the share on the assets of the firm. In the case of high tax on the earnings of the dividends by the government investors are more interested in firm to keep the earnings for future growth of the earnings. Otherwise for a low growth oriented firm investors want cash dividends as they can earn more return else where. According to Miller and Modigliani in a perfect market condition and in a no tax situation investors are indifferent to a company that pays dividend and another not pays dividend. What ever the investors lose in the form dividends are gained through capital appreciation. The investors believe that the dividends are put to earn further gains in the future. On the expectation of increased future earnings the prices of the stock increase giving the investors capital investors which they can make by selling the stock at higher price. But stock market history shows us that dividends are really matter for any particular stock. Most of the non dividend paying companies are invariably loss making dogs[4] These companies does not have earnings capacity in their business and are struggling even to pay the dividends shareholders. Investors think the company has lost the earning capacity. The selling pressure decreases the prices of those non dividend company shares. This is quite opposite to what the dividend theory of stock market as well as what Miller-Modigliani postulated. "One look at the JSE highest dividend yield share reveals the problem: It is Northern Engineering Industries Africa whose 3 000% dividend yield places it way ahead of second placed SA Reit at 70%."[5] The above example explains that the highest dividend paying Northern Engineering Industries has a higher price than the SA Reit, in spite of both the companies operate in the same industry. Higher dividends attract more and more investor interest in the stock. Thus the price of the shares increases on the future dividends as well as capital gains. Based