Follow these procedures: If requested by your instructor, please include an assignment cover sheet. This will become the first page of your assignment. In addition, your assignment header should include your last name, first initial, course code, dash, and assignment number. This should be left justified, with the page number right justified. For example: |DoeJXXX0000-1 1 | Save a copy of your assignments: You may need to re-submit an assignment at your instructor’s request. Make sure you save your files in accessible location. Academic integrity: All work submitted in each course must be your own original work.
This includes all assignments, exams, term papers, and other projects required by your instructor. Knowingly submitting another person’s work as your own, without properly citing the source of the work, is considered plagiarism. This will result in an unsatisfactory grade for the work submitted or for the entire course. It may also result in academic dismissal from the University. | | | |SKS7000-8 |Dr. Milton Kabia | | | | |Doctoral Comprehensive Strategic Knowledge Studies |GardBSKS7000-8-5 | | | | Faculty Use Only Legal Environment of Business By Brian Gard
The XYZ Construction Inc. that performs road construction and bridges is planning to offer the initial public offering in a few months and are looking at the economic and legal factors. Moreover, the owners of XYZ Construction Inc. are concerned about the economic and legal factors that could affect the organization, particularly as the company transitions in a few months from private to public ownership with their IPO. They would like you to develop a document for them that describes and analyzes essential economic and legal factors for their horizontal construction company.
Herman created a study of the macroeconomics of construction companies. Moreover, the findings of the study with the financial constraint of over-leverage and under-leverage taken into account can provide a new insight into the adjustment behaviour of capital structure; how firms in the construction industry adjust towards the target capital structure over the business cycles, which as mentioned has been ignored by the previous studies, in particular in the emerging countries. The following are investigated in this study: (1) How do firms adjust towards the target capital structure over the business cycles?
We suggest a financing needs-induced adjustment framework to examine the dynamic process by which firms adjust their capital structures. We find that most adjustments occur when firms have above-target (below-target) debt with a financial surplus (Byoun). (2) Does financial constraint of over-leverage and under-leverage relative to the target capital structure affect the adjustment behaviour of capital structure of firms in the construction industry? The traditional capital structure theories have a pro-cyclical implication both for the level and adjustment process of firms’ capital structure.
Similarly, if global capital market integration effectively and substantially eliminates arbitrage opportunity, then, the pay-off for US-based MNCs seeking financing in the international capital markets under varying domestic macroeconomic conditions could only come at a marginal cost. The empirical results revealed that macroeconomic factors have significant influence on firms’ financing decisions; however, the impact is statistically different for MNCs relative to DCs. Importantly, the results shows strong evidence of relatively faster adjustment for MNCs than DCs.
The results have wide implications including resource allocation, agency costs, and effective integration of global capital markets (Camara, 2012). (3) Do macroeconomic conditions affect the adjustment behaviour of capital structure of firms in the construction industry? The speed of capital structure adjustment toward target leverage, we find evidence that firms adjust their leverage toward target faster in good macroeconomic states relative to bad states. This evidence holds whether or not firms are subject to financial constraints (Dougls &Tian).
(4) Is the effect of macroeconomic conditions on capital structure counter-cyclical or pro-cyclical over the business cycles (HSIEN-HUNG HERMAN 2011)? During expansions, risk-sharing improves, with increases in managerial wealth facilitating substitution of equity for debt. In calibrated simulations, (counter) cyclical variation in leverage is only exhibited by less constrained firms. All firms exhibit financial accelerator effects. However, the effect is decreasing in financial flexibility. The model’s predictions regarding financing and investment are consistent with empirical evidence (Amnon & Christopher).
The XYZ Construction Inc. microeconomics considerations should be relative to bidding of projects. Moreover, the results show that there is a relationship between bid price and bidding success. The bidders in general bid low for time periods before a winning bid and they are less competitive in time periods after a winning bid. However, by considering the individual bidders’ characteristics that relate to differences in bidding competitiveness, it is shown that there is remarkable heterogeneity among the bidders in bid pricing decision for pre- and post-winning periods.
Nevertheless, the statistically significant bidding trends before and after a winning bid strengthen the notion that systematic changes in bidding behaviour over time do occur in reality in response to changes in firm capacity level. Originality/value – This empirical investigation provides strong evidence on the systematic changes in bidding behaviour over time in response to changes in firm capacity level, supporting the need to incorporate firm capacity level in the future development of a suitable theoretical framework on construction bidding (Oo,Lo & Teck-Heng).
Legal considerations relative to leasing of equipments should take into account the duration of the lease period, the rights and responsibilities of both the lesser and lessee in the lease of the equipment including the amount to paid and payment terms due to the lesser, the market value and insurance costs of the equipment, the tax responsibilities and implications, warrantees and security deposits, penalties for early cancellation of the lease or lessees renewal options.
Legal issues in e-contracts which is usually proactively used in e-commerce, or B2B platforms involves the offer and acceptance an offer, click wrap contracts where term a and conditions are automatically agreed upon even without reading the terms, and digital signatures which confirms a person’s identity in a contractual agreements. This enables for e-contracts to be legally binding and acceptable (Shah & Agree, 2010). XYZ needs to also look at the workforce of immigrants hired. As of March 2006, almost 24 percent of all construction workers in the country were foreign bom (U.
S. Census Bureau 2006). Most immigrant construction workersare Hispanic, and many U. S. -bom Hispanics also work in construction. In March 2006, a little more than 24 percent of the construction workforce was Hispanic, a fourfold increase since 1980 (U. S. Census Bureau 2006; Center for Construction Research and Training 2002, chart 16b). Seventy percent of the 1. 4 million Hispanic construction workers in the United States in 2000 were born outside the United States, and 57 percent were not U. S. citizens (Center for Construction Research and Training 2002, section 16).
In Florida, immigrants and Hispanics are an even larger percentage of the construction workforce. As of March 2006, immigrants were 34. 7 percent of construction workers, and Hispanics constituted 31. 7 percent of the Florida construction workforce (U. S. Census Bureau 2006). O’Connor et al. (2005) surveyed fifty young Latino construction workers. This study was concerned with both their youth and their ethnic status, which previous research identified as being associated with higher risks of injury.
The article concludes that these workers had received very little health and safety training, particularly those with less English language ability (Nissen, Angee & Weinstein 2008). Labor also has impact on legal through wages and workforce. Moreover, Joseph Rose states that labor relations can have a disruptive effect on the economy, as evidenced by a history of protracted labor disputes over wages. The often chaotic nature of labor relations is a byproduct of external and internal sources of instability.
The industry is vulnerable to market forces, e. g. , cyclical and seasonal fluctuations in demand, as well as the decentralized nature of collective bargaining which produced an imbalance of bargaining power in favor of unions. The persistence of unstable labor relations led to the recognition that the existing legal framework was ill-suited to the unique characteristics and needs of the construction industry (Rose, 2011). References Amnon L, Christopher H. Why does capital structure choice vary with macroeconomic conditions?.
Journal Of Monetary Economics [serial on the Internet]. (n. d. ), [cited June 9, 2013]; 541545-1564. Available from: ScienceDirect. Byoun, S. (n. d). How and When Do Firms Adjust Their Capital Structures toward Targets ? Journal Of Finance, 63(6), 3069-3096. Camara, O. (2012). Capital Structure Adjustment Speed and Macroeconomic Conditions: U. S MNCs and DCs. International Research Journal Of Finance & Economics, (84), 106-120. Douglas O. , C. , & Tian, T. (n. d). Macroeconomic conditions and capital structure adjustment
speed. Journal Of Corporate Finance, 1673-87. doi:10. 1016/j. jcorpfin. 2009. 02. 003 HSIEN-HUNG HERMAN, Y. (2011). Adjustment behaviour of capital structure over the business cycles: evidence from the construction industry of Taiwan. Construction Management & Economics, 29(4), 329-340. doi:10. 1080/01446193. 2011. 562910 Nissen, B. , Angee, A. , & Weinstein, M. (2008). Immigrant Construction Workers and Health and Safety. Labor Studies Journal, 33(1), 48-62. Oo, B. , Lo, H. , & Teck-Heng Lim, B. (2012).
The effect of bidding success in construction bidding. Engineering Construction & Architectural Management (09699988), 19(1), 25. doi:10. 1108/09699981211192553 Rose, J. (2011). INTEREST ARBITRATION AND THE CANADIAN CONSTRUCTION INDUSTRY. Labor Law Journal, 62(4), 217-226. Shah, A. & Nagree, P. (2010). Legal issues in E-commerce. Retrieved from http://www. nishithdesai. com/Research-Papers/Legal_issues_ecom. pdf U. S Census Bureau. 2006. Current population survey 2006, annual social and economic supplement. Available from http://www. census. gov/cps/.