Company policy

Consider the following questions:

1. Is it necessary for a company to have its own policy?
2. Does a well-defined policy contribute to the success of the company in the business world?
3. What elements/ issues should be included in the policy of a firm?
4. Who decides upon the policy of the firm?

Corporations How Corporations Raise Funds For Investment

1. By investing in new issues of a companys stock, shareholders provide the funds for a company to begin new or expanded operations. However, most stock sales do not involve new issues of stock. Instead, when someone who owns stock decides to sell some or all of their shares, that stock is typically traded on one of the national stock exchanges, which are specialized markets for buying and selling stocks. In those transactions, the person who sells the stock not the corporation whose stock is traded receives the funds from the sale.

2. An existing corporation that wants to secure funds to expand its operations has three options:

It can issue new shares of stock, using the process described earlier. That option will reduce the share of the business that current stockholders own, so a majority of the current stockholders have to approve the issue of new shares of stock. New issues are often approved because if the expansion proves to be profitable, the current stockholders are likely to benefit from higher stock prices and increased dividends. Dividends are corporate profits that some companies periodically pay out to shareholders.

The second way for a corporation to secure funds is by borrowing money from banks, from other financial institutions, or from individuals. To do this the corporation often issues bonds, which are legal obligations to repay the amount of money borrowed, plus interest, at a designated time. If a corporation goes out of business, it is legally required to pay off any bonds it has issued before any money is returned to stockholders. That means that stocks are riskier investments than bonds. On the other hand, all a bondholder will ever receive is the amount of money specified in the bond. Stockholders can enjoy much larger returns, if the corporation is profitable.

4. The final way for a corporation to pay for new investments is by reinvesting some of the profits it has earned. After paying taxes, profits are either paid out to stockholders as dividends or held as retained earnings to use in running and expanding the business. Those retained earnings come from the profits that belong to the stockholders, so reinvesting some of those profits increases the value of what the stockholders own and have risked in the business, which is known as stockholders equity. On the other hand, if the corporation incurs losses, the value of what the stockholders own in the business goes down, so stockholders equity decreases.

(Source: https://www.the-unitedstatesofamerica.com/admin/rechterframes/2704.htm)

1. Match the words with the correct definition:

2. Build the word family of the following:

expanded (par. 1):..

transactions (par. 1):.

approve (par. 2):.

specified (par. 3):

reinvesting (par. 4):

e.g.: to expand, expander, expanding, expanse, expansibility, expansible, expansion, expansionism, expansionist, expansive

Look up the meaning of the following phrasal verbs. Add more phrasal verbs with pay. Make sentences of your own to illustrate their meaning.

to pay out (par. 2)

to pay off (par. 3)

4.1. Relative pronouns. Indefinite Pronouns/Adjectives. Demonstrative pronouns and adjectives

Relative pronouns

Read the following examples and look for others in the text:

someone who owns (par. 1)

which are specialized (par. 1)

the corporation whose stock is traded (par. 1)

corporation that wants (par. 2)

bonds which are(par. 3)

Who/ whom (who)/ whose: used for persons:

The secretary who wrote that report was fired.

The secretary whose report was bad was fired.

The secretary whom (who) you know was fired.

Which: used for things

The report which you read was a bad report.

The report whose content was boring was written by Mary.

That: used both for persons and things

The secretary that wrote the report.

The report that you read..

Indefinite Pronouns/ Adjectives Some, any, no

Read the following examples:

Some companies pay (par. 2)

to pay off any bonds it has issued before any money is returned(par. 3)

some of the profits (par. 4)

Some: pronoun or adjective

Used: in affirmative sentences: We have to visit some subsidiaries. (adj.) They must also visit some. (pron.)

Any: pronoun or adjective

Used:

• in negative sentences: He hasnt any work to do.
• after hardly, scarcely, barely: There are barely any suggestions to be made in this matter.
• in interrogative sentences: Does he have any chance to win?
• to express doubt; after if: If he meets any of you, he will surely help you.
• To express no particular one, practically every: Any suggestion you have may help.

No: adjective

Used: in affirmative sentences, to express negative meaning: There are no bankruptcies to be mentioned.

Some/ any/ no/ every +  thing// body// one: something, somebody/ someone..

Other indefinite pronouns: each, all, another, (the) other(s), little, much, few, many, one, either (of), neither (of)

Observation: The indefinite pronouns anybody/ anyone, anything, everybody/ everyone, everything, nobody/ no one, nothing, somebody/ someone, something: used with the verb in the singular

Demonstrative pronouns and adjectives

some of those profits (par. 4)

that option will reduce(par. 2)

Find the other demonstrative pronouns/ adjectives from the text and underline them.

This/ that

These/ those

This book here is different from that book there. (adj) I take this and not that. (pron.)

These people here will meet those people there. (adj.) These are engineers and those are businessmen. (pron.)

Such

Used in the following structures:

such + a/an + noun: such a business/ such an office..

such + noun (pl.): Such products are..

such + noun (pl.) + as: You have to consider such conditions as..

4.2. Complete the following sentences using:

• some, any, no
• suitable relative/ demonstrative pronouns/ adjectives

Be careful: although there are some other words too, that fit into the blank spaces, you must use only the required pronouns/ adjectives

The man 1. is waiting  next to 2. car is my business partner. say about him that he is the greatest specialist in car marketing from our company. There is 4. difficult problem 5. he can(not) find a solution for. When the company faces tough situations he raises his hand in the middle of 6. meeting and he asks 7. question he is famous for: Can I be of 8. help? 9. 10. dont know him, would think he is mocking, but we all know the fact 11. he speaks as seriously as he can. Nobody is offended by 12. way of behaving since we can rely on him in 1 serious case 14. appears. I dont know 15. idea was to hire him but he/ she did a good job.

Trends

upward movement: a rise to rise

an increase to increase, to go up

a climb to climb

a jump to jump

downward movement:  a fall to fall

a drop to drop

a decline to decline

a decrease to decrease

use of prepositions:   The percentage rose from.to.

The amount stood / stayed  at

The figure rose by ..

There was a rise of.

contrast

contrast words or phrases: but, although, despite, in spite of the fact that, whereas, however, nevertheless

in contrast (to). ..while.

On the other hand.  against.

On the contrary compared to..

In comparison (to)

similarity

both..and.

likeX.

the same.

X is similar to..

Neither nor..

Similarly..

Writing: Write about the company policy of a firm you choose, using the expressions above.