Were the three witches the main cause of Macbeths downfall Essay Example For Students

Were the three witches the main cause of Macbeths downfall? Essay Although the witches were a main cause of Macbeths downfall, the blame cannot lie solely with them. Rather, the unfortunate events were the result of poor judgement, human weakness, and adverse circumstances. The three weird sisters, as they are referred to in the play, planted a seed in Macbeths mind. This seed was the idea he could become king. They did this by saying: all hail Macbeth, hail to thee Thane of Glamis. then all hail Macbeth, hail to thee Thane of Cawdor. and finally all hail Macbeth, that shalt be King hereafter. Macbeth was already Thane of Glamis but he was puzzled because the Thane of Cawdor was still alive. When Macbeth heard of the Thane of Cawdors treachery, and that he was to take his title he began to wonder if the witches had spoken the truth. The seed that the witches had planted was growing. We will write a custom essay on Were the three witches the main cause of Macbeths downfall? specifically for you for only $16.38 $13.9/page Order now However, although the witches planted the seed, Macbeth needed soil for it to grow in. This soil was his lust for power, wealth, and status. After he heard that he was to be Thane of Cawdor he stated, If chance will have me King, why chance may crown me without my stir. So he was suggesting that he might be able to take the throne without actually doing anything. Although at the time he murders King Duncan it is obvious that his greed has taken over. Lady Macbeth was another main cause of the tragedy. Macbeth was having doubts about the appalling thing he was considering, and Lady Macbeth convinced him it was the right thing to do. She called him a coward and told him I have given suck, and know how tender tis to love the babe that milks me: I would, while it was still smiling in my face, have plucked my nipple from its boneless gums, and dashed the brains out, had I so sworn as you have done to this. So in effect she was saying I would go so far as to kill my own child if I had sworn to it like you have sworn to this. Macbeths own weakness was to contribute towards his downfall. It was said in the play brave Macbeth well he deserves that name disdaining fortune, with his brandishd steel, which smokd with bloodied execution, like valours minion carvd out his passage, till he faced the slave: which he neer shook hands or, nor bade farewell to him, till he was unseamd him from the nave to the chops, and fixed his head upon our battlements. This was a statement from one of the soldiers fighting beside Macbeth praising his bravery and valour in battle. However, when it came to strength of character Macbeth was lacking. He let his wife make his earlier decisions for him by manipulating him with her words. He did not have enough strength of mind to make his own decisions about the actions he was about to commit. Although the  witches were a very large contributing factor to the downfall of Macbeth, they werent the only one. Had Macbeth not wanted to be king or lady Macbeth not have pushed him towards it then the outcome could have been somewhat different.

Lustreware - Medieval Islamic Pottery Technique

Lustreware - Medieval Islamic Pottery Technique Lustreware (less commonly spelled lusterware) is a ceramic decorative technique invented by 9th century C.E. Abbasid potters of the Islamic Civilization, in what is today Iraq. The potters believed that making lustreware was true  alchemy  because the process involves using a lead-based glaze and silver and copper paint to create a golden shine on a pot that contains no gold. Chronology of Lustreware Abbasid 8th c -1000 Basra, IraqFatimid 1000-1170 Fustat, EgyptTell Minis 1170-1258 Raqqa, SyriaKashan 1170-present Kashan, IranSpanish (?)1170-present Malaga, SpainDamascus 1258-1401 Damascus, Syria Lustreware and the Tang Dynasty Lustreware grew out of an existing ceramic technology in Iraq, but its earliest form was clearly influenced by Tang dynasty potters from China, whose art was first seen by those of Islam through trade and diplomacy along the vast trade network called the Silk Road. As a result of ongoing battles for control of the Silk Road connecting China and the West, a group of Tang dynasty potters and other craftsmen were captured and held in Baghdad between 751 and 762 C.E. One of the captives was the Tang Dynasty Chinese craftsman Tou-Houan. Tou was among those artisans captured from their workshops near Samarkand by members of the Islamic Abbasid Dynasty after the Battle of Talas in 751 C.E. These men were brought to Baghdad where they stayed and worked for their Islamic captors for some years. When he returned to China, Tou wrote to the emperor that he and his colleagues taught the Abbasid craftsmen the important techniques of paper-making, textile manufacture, and gold-working. He didnt mention ceramics to the emperor, but scholars believe they also passed along how to make white glazes and the fine ceramic pottery called Samarra ware. They also likely passed along the secrets of silk-making, but thats another story entirely. What We Know of Lustreware The technique called lustreware developed over the centuries by a small group of potters who traveled within the Islamic state until the 12th century, when three separate groups began their own potteries. One member of the Abu Tahir family of potters was Abul Qasim bin Ali bin Muhammed bin Abu Tahir. In the 14th century, Abul Qasim was a court historian to the Mongol kings, where he wrote a number of treatises on various subjects. His best-known work is The Virtues of Jewels and the Delicacies of Perfume, which included a chapter on ceramics, and, most importantly, describes part of the recipe for lustreware. Abul Qasim wrote that the successful process involved painting copper and silver onto glazed vessels  and then refiring to produce the lustrous shine. The chemistry behind that alchemy was identified by a group of archaeologists and chemists, led by who reported Spains Universitat Polità ¨cnica de Catalunya researcher Trinitat Pradell, and discussed in detail in the Origins of Lustreware photo essay. The Science of Lusterware Alchemy Pradell and colleagues examined the chemical content of glazes and the resulting colored lusters of pots from the 9th through 12th centuries. Guiterrez et al. found that the golden metallic shine only occurs when there are dense nanoparticulated layers of glazes, several hundred nanometers thick, which enhance and broaden the reflectivity, shifting the color of the reflected light from blue to green-yellow (called a redshift). These shifts are only achieved with a high lead content, which potters deliberately increased over time from Abbasid (9th-10th centuries) to Fatimid (11th-12th centuries C.E.) luster productions. The addition of lead reduces the diffusivity of copper and silver in the glazes and helps the development of thinner luster layers with a high volume of nanoparticles. These studies show that although the Islamic potters may not have known about nanoparticles, they had tight control of their processes, refining their ancient alchemy by tweaking the recipe and production steps to achieve the best high reflecting golden shine. Sources Caiger-Smith A. 1985. Lustre Pottery: Technique, tradition, and innovation in Islam and the Western World. London: Faber and Faber. Caroscio M. 2010. Archaeological Data and Written Sources: Lustreware Production in Renaissance Italy, a Case Study. European Journal of Archaeology 13(2):217-244. Gutierrez PC, Pradell T, Molera J, Smith AD, Climent-Font A, and Tite MS. 2010. Color and Golden Shine of Silver Islamic Luster. Journal of the American Ceramic Society 93(8):2320-2328. Pradell, T. Temperature resolved reproduction of medieval luster. Applied Physics A, J. MoleraE. Pantos, et al., Volume 90, Issue 1, January 2008. Pradell T, Pavlov RS, Gutierrez PC, Climent-Font A, and Molera J. 2012. Composition, nanostructure, and optical properties of silver and silver-copper lusters. Journal of Applied Physics 112(5):054307-054310.

Happiness Advantage Essay Example | Topics and Well Written Essays - 1250 words

Happiness Advantage - Essay Example However, for every success, goalposts are pushed further and further, and happiness is forced to the horizon. In a recent research that has been conducted in the area of positive psychology and neuroscience, there is evidence that in circumstance that the relationship between happiness and success works backward. Through this cutting –edge- science, it is now apparent that happiness is what produces success according to Achor. Dr. Achor argues that optimism and happiness gear to achievement and performance that result in competitive edge called ‘Happiness Advantage. The authors say, waiting to be happy limits the brain’s potential to success, while by positive minds results in more motivation, resilience, creativity, productivity and efficiency increase a person’s performance. The author says that is his discovery is based on a research he carried out in 500 companies worldwide and an interview with 1600 students in Harvard School (Achor 100). There are sev en main principles from the Happiness Advantage by Shawn Achor that produce happiness. These principles include Happiness Advantage, The Tetris Effects, The Zorro Circle, Social Investment, The Fulcrum and the Lever, Falling Up, and The 20-Second Rule. The author was raised in Waco, Texas, and he never anticipated leaving the city. As he applied in Harvard, he wanted to train as a volunteer firefighter. He was unexpectedly accepted in the school, and this made him feel honored and privileged. After pursuing his studies, he becomes a proctor, hired to assist undergraduates navigate through the academic success and happiness. The author explains that his life in Harvard changed the way his brain processed his experience. Many learners in Harvard saw the school as a privilege, but others did not see this as they mainly focused on competition, workload and stress (Achor 120). The students felt inundated by every small challenge instead of being motivated by the opportunities ahead

Is Spontaneous Order a Form of Social Justice for Hayek Essay

Is Spontaneous Order a Form of Social Justice for Hayek - Essay Example Is Spontaneous Order a Form of Social Justice for Hayek? Then from the literature review, the views of various authors related to theory of Hayek will be taken into account to link these terms up. Finally, after a thorough analysis the final conclusion will be presented to sum up the whole theory. The concept of â€Å"Spontaneous order† is an order that emerges with the volunteer actions of the individuals and not the one that is artificially created by the government. It is the key concept in free market tradition and classical liberal explained differently by different people. However, Hayek has explained the term as more creatively designed efficient market economies than any societal design could achieve (Petsoulas, 2001 – pp.2). This view is pointing towards the fact that market economies are emerged naturally from the business services and the individuals involved in the buying and selling of these goods and services to form and distribute them accordingly depending upon the individual decisions. Such economies cannot b e designed and created by any society manually. The idea of â€Å"Social justice† refers to the equal distribution of rights and duties among all individuals present within a given system. It is the key concept that is supportive of human rights and aims to achieve all aspects of a social system including the administrative law. A social system is said to be â€Å"just† only when all rules and regulations are abide equally by all the individuals present in it. Fair treatment should be attributed to all individuals and groups to promote the basic concept of merit. Distribution of costs and benefits should be equal among all without any favor. According to the Hayed, the social justice is nothing but a â€Å"Mirage† (Routledge and Paul, 1982). Hayek has referred to the social justice as the â€Å"worst use of word social† and it indicates a â€Å"semantic fraud†. Hayek has noticed that the term has "already distorted the thinking of a younger generat ion," citing David Miller's recent Oxford doctoral thesis, titled as "Social Justice.† (Routledge, 1988, pp.114-118) All the above evidences show that Hayek was not supportive of the idea of social justice because he viewed that the economic reward system is the result of unplanned market economies that arises from the individual actions and decisions. Such system occurs naturally as a result of spontaneous order rather than being created manually then there is no need to think about social justice or injustice as every individual has been assigned a particular place and position within the society and is working under the command of some central authority that directs them. Hayek was of the view that the spontaneous order comprises of individuals and organizations than there is no need of social justice (Hayek, 1993, pp.46). Spontaneous order aims to correct the errors that are residing within a given social system and help the individuals to struggle and meet their desired e xpectations. It plays a key role in building social relationships. Hayek has put forth the idea that a centralized legal system would not be able to enhance the effectiveness of social justice or well being as â€Å"only human conduct can be called as jus or unjust† (Miller, 1976, pp.17) (Macleod, 1983, pp.557). The economic systems are too complex to be regulated in any centralized legal direction (Hayek, 1973, 1976, 1979). Hayek has simply rejected the idea of the prevalence of social or distributive justice within the spontaneous o

Dessisons Thesis Statement Essay Example for Free

Dessisons Thesis Statement Essay One of the 6 decisions is friends. Friends can help you graduate from high school as well as prevent you from graduating as well. It could be just as bad having no friends as having the wrong kind of friends. Three reasons are you if you have smart and good friends you have a much higher chance of graduating, if you have bad friends that are always getting in trouble then you have a low chance of graduating or being successful in life, the last reason is having no friends could be as bad as having the wrong friends. If you have smart friend’s chances are you will do better in school and be successful in life. One reason is your friend won’t call you asking you to come to a party or go to the mall when you need to study because you most likely will be studying too. Another reason is they will get you into good habits like studying instead of bad habit like drugs and skipping school. The last reason is there might be a little friendly competition between you and your friends about grades and test scores. Those are three reasons why having smart friends can help you graduate and be successful in life. If you have bad friends that always get in trouble and do bad stuff then chances are you will do the same and do poorly in school and not graduate. One reason is they get you into bad Habits such as drugs, partying, and skipping school. Another reason is they will call you and tell you to come to a party while you’re trying to study and if you don’t go then they might make fun of you. The final reason is they will want you to skip school which will mean missed assignments which will make your grades go down which will make you do poorly in school and maybe not graduate. Those are three reasons why having bad friends who get in trouble can prevent you from doing well in school. If you have no friends it could be just as bad as friends that get in trouble. One reason is other kids might bully you which could make yourself esteem go way down which might make you care less about school. Another reason if you need help with homework you won’t have any friends to call for help. The final reason is if you’re having family problems you won’t have someone to talk to and help you get passed it and focus on school some again. Those are the three reasons why having no friends could be as bad as having fiends that get in trouble. Those are the three main reasons why friends can help you or prevent you from graduating high school and be successful in life. So make the choice keep partying and sliding by in school or have smart friends and fly right through school and graduate and have a successful life and provide your kids with a good life as well. You can do well in school and still have fun because your parents might give you more responsibility and let you do what you want more. So the best choice is have good, smart friends. But it’s your choice.

Accounting Report Essay -- GCSE Business Marketing Coursework

Accounting Report Anyone considering accounting needs to assess whether this career fits his or her interests, abilities, and aspirations. There are certain qualities and qualifications, however, that a person should consider before making a commitment to a particular career field. Selecting a career can take a lot of time, and many people do not choose until they are adults. Contributing to the difficulty in choosing a career is the vast number of vocations from which to choose. The field of accounting alone covers dozens of types of accountants and dozens of jobs. In trying to decide whether accounting is an appropriate career choice, a person should talk with bookkeepers and accountants that have years of experience. Ask questions about their daily work requirements, their likes and dislikes about accounting, and how they became interested in the profession. Questions such as these can give a person insight into the profession and help in considering accounting as a career. Accounting is a system used to provide financial information about a business or person. Accountants prepare and analyze financial records for individuals, companies, governments, or other organizations. Accounting is a basic need for every business, and the term business has been broadened to mean any operation that deals with money. That includes families and corporations, and also schools, theaters, art galleries, charitable organizations, and even some private persons. People sometimes call accounting â€Å"the language of business† because accounting data are used to detail firms activities. Accounting tells the history of a business or person in numbers. Over one million people are employed as accountants, and most can be found in private business and industry. â€Å"Nearly 40 percent of all accountants are certified, and about 10 percent are self-employed’(Caruna, 1). In addition to openings resulting from growth, the need to replace accountants who retire or transfer to other occupations will produce thousands of job opening annually in this large occupation. The Occupational Outlook Handbook states that the expansion of accountants is related to: â€Å"increasingly complex taxation, growth in both the size and the number of business corporations required to release financial reports to stockholders, a more general use of accounting in the management of business, and outsourcing of a... ...anning and control. â€Å"Other examples of consulting projects of CPA firms are: advising and developing a system for a stock exchange, assisting a new integrated financial management system for New York City, and helping several major railroads with resource planning† (Rosenthal, 22). A career in management consulting offers the opportunity to work with a company’s executives in applying the concepts of modern management and information technology. The final level of entry into public accounting is entrepreneurial services. In the book Careers in Accounting, it says that working in the entrepreneurial field â€Å"is a fast-growing and dynamic area that has been formed in most large firms in the last few years† (5). The person working in this area deals with the special requirements of a startup or growing company. Professionals in this group are involved in counseling and advising the emerging or middle-market company that may lack the resources to successfully handle planning, cost control, attracting capital, going public, or choosing the right information system or compensation plan. Audit, tax, and management consulting skills are all used to fill the needs of an emerging business.

Debt Policy at Ust Inc.

Executive Summary Holding nearly 80% of the market share in the smokeless tobacco industry, UST Inc. has been generating large and stable income. However, the leading company in a certain industry tends to react slowly to market share erosion by competing firms and lack of creativity in the introduction of new product, a situation UST Inc. is now undergoing. Concerning the declining sales growth and gradual loss of the market share, UST Inc. is now considering recapitalizing by issuing debt amounts to $1 billion.By recapitalizing, it can create a total $380 million interest tax shield to add up firm value and, at the same time, make shareholders better off by using the proceeds from the issuance of debt to buyback outstanding shares. Although declining sales growth and litigation problem might be hidden concerns for UST Inc. , after some analysis about the attributes of the company such as business risk, capital structure as well as payout policy, I still believe that UST Inc. s head ing toward the right direction. And we can also observe that, after the adjustment of capital structure, its traditional dividend payout policy will not be hampered in the near future. Analysis of Business Risks (from bondholder’s viewpoint) Bondholders only care about the ability of the company to make interest payments and whether they can get the face value when the bond matures. Therefore, we have to consider the factors that contribute to the amount and stability of future EBIT.In the situation of UST, several factors have more of an impact on the company’s business risk, such as sales growth, competition faced owing to other competitors’ erosion into their market share and the effect of litigation problem and government regulations. Since the smokeless tobacco are considered less harmful to health and increased prevalence of smoking bans, demand of smokeless tobacco has undergone a continued growth, which would contribute good prospect to UST since its pro ducts strategy focus primarily on smokeless tobacco.However, as a dominant player in the industry, UST seems to be less creative on the introduction of new product and react too slowly to other competitors’ erosion into their market share. So far, UST has been increasing the price of their product as a way to boost their annual earning, which gives other players a perfect chance to gain some market share by using price value strategy. Despite the steady decline of market share might turn into future concern for UST, it still holds 77% of the market share. Besides, UST has started to make effort in new product development and renew their marketing and promotion strategy.On the other hand, although litigation and legislation problems have impacts on sales of UST, these problems has been there for a long time, which means that it shouldn’t create new turbulence on the prospect of UST. To conclude, the attributes of UST are steadily growing EBIT(approximately 9% compounded ), dominant market share in the industry. Therefore, although there are some disadvantages toward their future earning power, such as increasing competition and litigation problems, bondholders shouldn’t care too much on them since the interest expense is still a minor portion of the total EBIT.The Timing of Recapitalization It is publicly known that, through leverage, companies can lower their WACC and receive benefit from interest tax shield in order to boost their firm value. This is exactly what UST Inc. is doing right now. By issuing debt and use the fund to buy back outstanding shares, it is boosting their stock price higher. I reckon that the reason they choose to do so at this specific time is because the company has been facing more and more vigorous competition these years and undergoing declining rate of sales growth.By adopting leverage recapitalization, UST can still make the stockholder better off even its sales growth is not high enough. Besides, UST’s d ebt to asset ratio is currently at a low level compare to other competitors in the industry. Therefore, they can adopt the recapitalization strategy without worrying too much about the default risk problem. Capital Structure after the Recapitalization From the pro forma income statement (exhibit 1) in the appendix, we can see that even if the bond is issued at a rating of BBB (higher cost of debt), the EBIT/interest coverage ratio is still 10. 21, which shows that UST as sufficient amount of EBIT to make the interest payments. And the marginal effect on UST’s firm value would be the total debt ($1 billion) multiplied by the corporate tax rate (38%), which is $380 million. Dividend Payout Policy From Exhibit 2, we can observe that, under current condition, the payout ratio is around 63%, which is the percentage UST has long been paying out in the past. Therefore, it is safe to draw the conclusion that the recapitalization will not hamper future dividend payment under current c ondition. However, we are not sure whether the market share and the growth of sales will continue to drop.If they do, it will become more and more difficult for UST to stick to their traditional â€Å"pleasing† payout policy. Likely, we are not sure whether the litigation problem will be more of a concern for UST in the future. Ultimately, despite the fact that the opponents’ erosion into UST’s market share and litigation problem are both hidden concerns, it takes time for both problems to pose a threat to UST’s traditional payout policy. Appendix Exhibit 1 Pro Forma Income Statement Exhibit 2 Dividend Calculation after the Buyback Program Corporate Finance Case Study Assignment Debt Policy at UST Inc. Debt Policy at Ust Inc. Executive Summary As the leading manufacturer in the moist smokeless tobacco industry, UST Inc. has long been recognized by its ability to generate high profit using low financial leverage. With a dominant market share of 77%, the company maintains a pricing power that allows it to institute annual price increases without losing costumers. However, UST’s market share was eroded significantly in recent years by price-value competitors who enter the market with lower prices. Although UST responded to these threat by introducing new products, market share still decreased by 1. 6% over past 7 years.In addition, UST is also exposed to an unfavorable legislative environment, in which the company is under advertising and product promotion restrictions. The increasing business risks force management of UST to consider a recapitalization plan in which UST borrows up to $1 billion to repurchase its stocks. The marginal effect of the recapitalization will be a $380 million increase in fi rm value, which is the present value of interest tax shield. Besides the recapitalization benefit, management also needs to notice the costs of recapitalization, which include higher bankruptcy costs and a potential of lower credit rating.UST has a high and constant dividend payout history since 1912. The recapitalization will expose more risks to shareholders since revenues will be used to pay interest before pay dividends. Thus, the recapitalization may hamper future dividend payments. Background Having long been the leading company in the moist smokeless tobacco industry, UST Inc. was famous for its product innovation, dominate market share, and pricing adjusting power. However, as the competition of the moist smokeless tobacco industry became more intense and the legislative environment became more unfavorable, UST is facing several business risks: . Lose of market share. Relying on its superior products and innovation ability, UST used to control most of the moist smokeless tob acco market and was able to increase the price of its products year by year without losing its customers. The historical pricing flexibility gave UST a robust earning performance and bumped up its stock prices. However, as the speed of product innovation became slower, UST is facing the threat of price-value competitors, who enter the market by charging a lower price. Although later UTS responded to the threat by introducing new products, the company’s market share still dropped from 86. % in 1991 to 77. 2% in 1998. 2. Increase exposure to legislative environment. Moist smokeless tobacco manufactures used to face fewer lawsuits than cigarette manufactures due to less scientific evidence liking smokeless tobacco to cancer. However, the legislative environment has become more unfavorable to smokeless tobacco manufactures since the industry has agreed on a ban on advertising in order to settle state Medicaid lawsuit. Also, UST was the only main manufacturer that signed an agreem ent on promotion restrictions that aim to reduce youth exposure.Recapitalization UST has been widely known for its conservative debt policy, which allows the company to generate high returns with very low financial leverage. However, as business risks such as market share erosion and unfavorable legislation exposure increase, UST has an incentive to change its capital structure in order to benefit from interest tax shield and maximize the firm value. Recapitalization will also benefit shareholders in a way of higher company stock price since the proceeds from debt will be used to repurchase outstanding stocks.Also, although UST has a very high gross profit margin and return on assets on its core business compared to other smokeless tobacco manufactures, the poor performance of its non-core operations such as market wine and premium cigars give UST a low to zero profit contribution. UST’s management needs to diversify its product line and bump up earnings by investing more in the non-core operations using debt funds. Marginal Effect of Recapitalization To analysis if UST should undertake the $1 million recapitalization, management needs to calculate the value of the firm before and after ecapitalization. In a market with taxation, the value of the levered firm equals to the value of the unlevered firm plus the present value of interest tax shield. Because management assumes that the new debt is constant and perpetual, the present value of interest tax shield equals to the amount of debt multiplied by the effective tax rate, which is 38%. Thus, the present value of UST’s future tax saving should be 38% * $ 1 billion, which is $380 million. At the end of 1998, the market equity of UST was $6,470. 8 million based on the average shares outstanding and year-end stock price.If UST borrows $1 billion debt immediately, the total value of the levered firm would be $6,470. 8 million unlevered value plus $380 million tax shield, which is $6,850. 8 million. B ecause firm value will rise to $6,850. 8 million immediately after the recapitalization announcement, original shareholders will capture the full benefit of interest tax shield since they are able to sell their stocks at a higher price. The new stock price is determined by dividing the value of the levered firm by the number of shares outstanding at the end of 1998.Since there were 185, 516,055 shares outstanding at year end 1998, the new stock price after the announcement of recapitalization would be $6,850. 8 million divided by 185, 516,055, which is $36. 93. Compared to the original stock price of $34. 88, each pre-existing shareholder will benefit $2. 05 from the increase in leverage. If taxation is the only issue that management should take into consideration, the marginal effect of raising debt will be increase in company value by $380 million.However, as financial leverage increases, default risk on debt also increases, thus leads to a potential increase in bankruptcy costs. UST has been maintained an A-1 credit for its low debt / capital ratio of 28. 2%, which is a competitive advantage over its competitors who are highly leveraged. If UST decides to increase its leverage ratio, it will cause rating agencies to revalue its capital structure and cash flow generating ability in order to assign an appropriate rating.The potential change in rating will significantly affect UST’s cost of capital. Thus, management should balance the tax benefit with the expected cost of bankruptcy to maximize form value. Besides its conservative debt policy, UST was also famous for its stable and constant dividend payout since 1912. The recapitalization may hamper future dividend payments since earnings should be used to pay off debt and interest expense before they are delivered as dividends to stockholders.Because debt is risk-free and debt holders have first claim on a company’s asset, levered equity often carries a higher risk premium than unlevered equity to compensate stockholders. The remaining balance of earnings after paying interest may also be retained for operating purpose. Thus, the possibility of an interruption of cash dividends payout may occur. Summary In summary, facing the increase business risks of losing market share and exposing to unfavorable legislations, the management of UST Inc. s considering changing the company’s capital structure by raising $1 billion debt and accelerating its stock buyback program. The benefit of recapitalization will be an increase in firm value of $380 million and increase in stock price by $2. 05 each share. However, management should also take into consideration the potential increase in bankruptcy costs and changes in credit rating. Last, the constant divided payout may be hampered by recapitalization since earnings need to be used to pay interest to debt holders first.