The Optimal Capital Structure under the Conditions of Employment: An Application of Theory X and Theory Y

The traditional theories governing the capital structure decisions completely ignore the human side of the enterprise (e.g. attitude to work). The objective of this paper is to identify the optimal mix of Theory X and Theory Y type employees to be employed by an organization in order to maintain (i.e. unaffected by the type of employees at work) the optimal level of capital structure. The classification of an employee into Theory X and Theory of Y is made based on the organizational contribution conditional on motivation rather than merely considering the attitude to work. Internal motivation of an employee (i.e. inherently likes or dislikes) alone cannot be identified as the criterion of recognizing employees under Theory X and Theory of Y. Level of attainment of needs within the organization, psychological state of mind and cultural dimension (i.e. individualism-collectivism) of the individual attached to the organization are the main behavioural criteria that distinguish between Theory X-type and Theory Y-type employees. This paper shows that the optimal capital structure is unaffected by the employment mix at the optimal level of Theory X and Theory Y type employees employed by an organization. The firms’ managers must therefore consider the behavioral aspects of employees (e.g. attitude to risk) when making organizational decisions such as financial decisions. For example, mismatches in the capital structure can be explained by a careful analysis of behavioral aspects of employees. By making necessary adjustments to the current employment mix, the firm could eliminate the mismatches in the firm’s capital structure

Is Reviewing Valuations a Tool for Curtailment of Professional Opinions?: A Perspective of a Reviewer Based on Valuations for Secured Lending Purpose

This paper delves into the pivotal role of valuation reviews in mortgage lending, dispelling misconceptions prevalent among private practice valuers. Drawing on the International Valuation Standards Framework, the study emphasizes the importance of qualified and ethical valuers in producing credible reports. Leveraging the author's extensive experience in the state sector and as a valuation reviewer for leading banks, the paper provides insights into fourfold review techniques—Administrative (Compliance) Review, Desk Review, Field Review, and Technical Review. These techniques ensure the accuracy, appropriateness, and adherence to Generally Accepted Valuation Principles, as per International Valuation Standards. In addition, the paper explores the technical background of mortgage valuations, highlighting nine key principles followed by valuers and examining Sri Lanka Valuation Standard-07. This paper also includes ten compelling case studies, covering diverse scenarios such as legal principles, wasting assets, building limits, accuracy of calculations, and valuation challenges associated with cattle farms and apartment buildings under construction. The paper reinforces the crucial role of valuation reviews in maintaining the integrity of mortgage valuations and the inclusion of ten case studies adds practical insights, covering a spectrum of scenarios and reinforcing the argument for adherence to regulatory standards and client requirements

Community participation in small city water supply schemes in Sri Lanka

Community participation is a new approach adopted to address many fundamental issues prevailing in implementation and O&M in small city water supplies. Lack of funds to improve the WS systems, high percentage of non-revenue water resulted in imbalance between expenditure and revenue, schemes expansions without proper technical assessment, water rights and competition in water use, consumer unawareness towards the safety of WS schemes and water sources were resulted to unsatisfactory performance in technical, financial and management of the majority of small city WS systems. Mobilizing of communities in small city WS is not easy due to its magnitude and heterogeneous society. This is more difficult in schemes where augmentation and expansion are taking place, as commitments are completely different between existing and new consumers. However, with all these constraints, pilot level Kegalle small city scheme in Sri Lanka has made remarkable achievements in solving these issues and emphasized the adaptability of community participation approaches in small city WS schemes

Development of Beta (β) Carotene Enriched Drinking Yoghurt by Incorporating Carrot (Daucus carota) Pulp and Orange (Citrus sinensis) Juice

Beta (β) carotene is a natural antioxidant which is omnipresent in yellow, green vegetables and fruits. The main objective of this study was to develop a β carotene enriched drinking yoghurt by incorporating carrot pulp and orange juice. The mixing ratio of carrot pulp, orange juice and yoghurt base was selected by analyzing the data gathered from a preliminary sensory trial with respect to appearance, colour, taste, mouth feel, and overall acceptability of drinking yoghurt samples. The product was developed according to the selected best formula and was subjected to analysis of chemical composition and shelf life evaluation. The sample containing 10% carrot pulp, 10% orange juice and 80% yoghurt base was selected as the best formula. Coliform, yeast and mold were absent after 35 days. The β-carotene content, antioxidant capacity and pH of the developed product were 0.495±0.001 mg/100 g, 55.245±0.008% and 4.416±0.005 respectively. Collectively these results suggest that, the developed drinking yoghurt has 35 days of shelf life with high nutritional value including pro-vitamin A which is a natural antioxidant.Keywords: β-carotene, vitamin A, natural antioxidant, drinking yoghurt, carrot pul

Study of water usage in rural areas

Study of water usage in rural area

Information Flow Interpretation of Heteroskedasticity for Capital Asset Pricing: An Expectation-based View of Risk

The Heteroskedastic Mixture Model (HMM) of Lamoureux, and Lastrapes (1990) is extended, relaxing the restriction imposed on the mean i.e. μt-1=0 . Instead, an exogenous variable rm, along with its vector βm, that predicts return rt is introduced to examine the hypothesis that the volume is a measure of speed of evolution in the price change process in capital asset pricing. The empirical findings are documented for the hypothesis that ARCH is a manifestation of time dependence in the rate of information arrival, in line with the observations of Lamoureux, and Lastrapes (1990). The linkage between this time dependence and the expectations of market participants is investigated and the symmetric behavioural response is documented. Accordingly, the tendency of revision of expectation in the presence of new information flow whose frequency as measured by ‘volume clock’ is observed. In the absence of new information arrival at the market, investors tend to follow the market on average. When new information is available, the expectations of investors are revised in the same direction as a symmetric response to the flow of new information arrival at the market

The Stochastic Implications of Permanent Income Hypothesis for US Speculative Traders: Implications for Consumption-Based Asset Pricing

This paper examines the stochastic implications of permanent income hypothesis for speculative prices from a sample of economic data from 1967 to 2017 in the United States. One of the standard assumptions of the Consumption-Based Capital Asset Pricing Model (CCAPM)—the time separability of utility—is relaxed in the model specification of Mankiw and Shapiro (1985) and finds that the expected change in earnings has no obvious connection with stock price changes for monthly and yearly data. This finding, while accepting the excess sensitivity of consumption to income, suggests that the past consumption—unconstrained by expected change in income of that period—influences the utility of future consumption. Disposable income and consumption expenditure are highly autoregressive and non-stationary for monthly, quarterly, and yearly time series. The hypothesis that disposable income follows a random walk is clearly rejected for three-time horizons and the consumption is excessively sensitive to income for monthly and yearly data. The rejection of income follows a random walk due to liquidity constraint for quarterly data. The results of impulse response functions question the OLS/AR type of (univariate) regressions used to test the randomness of disposable income and the excess sensitivity. Equity price changes are, however, found to be completely independent from disposable income for frequent observations of income, which suggests that the use of consumption as a variable in capital asset pricing is a subjective assessment. Furthermore, the empirical evidence shows that the equity price changes cannot be effectively forecasted by the predictable change in disposable income

Information Flow Interpretation of Heteroskedasticity for Capital Asset Pricing: An Expectation-based View of Risk

The Heteroskedastic Mixture Model (HMM) of Lamoureux, and Lastrapes (1990) is extended, relaxing the restriction imposed on the mean i.e. μt-1=0 . Instead, an exogenous variable rm, along with its vector βm, that predicts return rt is introduced to examine the hypothesis that the volume is a measure of speed of evolution in the price change process in capital asset pricing. The empirical findings are documented for the hypothesis that ARCH is a manifestation of time dependence in the rate of information arrival, in line with the observations of Lamoureux, and Lastrapes (1990). The linkage between this time dependence and the expectations of market participants is investigated and the symmetric behavioural response is documented. Accordingly, the tendency of revision of expectation in the presence of new information flow whose frequency as measured by ‘volume clock’ is observed. In the absence of new information arrival at the market, investors tend to follow the market on average. When new information is available, the expectations of investors are revised in the same direction as a symmetric response to the flow of new information arrival at the market

STUDIES ON THE VEGETATIVE PROPAGATION OF Gymnema sy/vestry (MASBEDDA)

Gymnema is a woody, extensively branched perennial vine well known as a medicinal plant withanti-diabetic properties. The extract of leaves contains gymnemic acid and a mixture oftriterpene-glycosides known as gymnemosides, which were found effective in reducing bloodsugar by acting indirectly through the stimulation of insulin secretion ofthe pancreas. Further, itwas found that, it reduces the serum cholesterol levels, stimulate circulatory system and alsoused in treating snakebites. Thus, Gymnema has a ready demand in local and foreign market ofherbal products, causing over exploitation of natural habitats, at the face of the lack of systemiccultivation. In this background, the current study was carried out to develop a cost effectiveprotocol for the rapid multiplication of Gymnema.It was a challenging task to find out sufficient amount of planting material, since Gymnema is avery rare species of plant. After an extensive survey, few authentic mother vines were identifiedfrom two locations in Matara district and one location in Monaragala district. The l't and theimmediate phase of propagation studies were conducted on vegetative propagation, since thecollection of seeds was extremely difficult. Three types of stem cuttings (2-3 nodal cuttings withleaves) i.e.; softwood (green, terminal portions), semi-hardwood (middle portion) and hardwood(basal portion) were used with hormone treatments and different potting mixtures. Applicationof Secto (NAA 0.3% + Thiram 0.2% in WP form) resulted 80% success in root formationfollowed by 50% success with the application of Clonex (3-IBA, 3mg/L in paste form)compared to 10% success observed in the control.It could be clearly observed from the results that, Gymnema can be vegetatively propagated bythe use of stem cuttings of specially the semi-hardwood type. Auxin based commercial rootinducing hormone mixtures can be effectively utilized to improve the success of root formationin Gymnema. A potting medium with desirable properties i.e. high moisture holding capacitywhile maintaining good aeration can further enhance the success of vegetative propagation.Thus, it can be concluded from the results that, the mass propagation of Gymnema can beachieved within a reasonably short period of time (less than one year) by using the techniquedeveloped.