Examples of government-linked company in the following topics:
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- Government-owned companies are either partially or fully owned by a government and have both a distinct legal form and commercial presence.
- The term government-linked company (GLC) is sometimes used to refer to private or public corporate entities in which an existing government owns a stake through a holding company.
- One rationale for calling a company a GLC is whether or not a government owns an effective controlling interest (>50%); another possible definition defines as a GLC any corporate entity that has a government as a shareholder.
- A notable example of an SOE is the Saudi national oil company, Saudi Aramco, which the Saudi government bought in 1988.
- The Saudi government also owns and operates Saudi Arabian Airlines, as well as many other companies.
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- Corporate governance is the system by which companies are directed and controlled.
- Corporate governance is the system by which companies are directed and controlled.
- As a rule, compliance with these governance recommendations is not mandated by law, although the codes linked to stock exchange listing requirements may have a coercive effect.
- An issue raised in the U.S. since the 2005 Disney decision is the degree to which companies manage their governance responsibilities.
- Corporate governance deals with the conflicts of interests in a company.
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- Government regulation was justified on the theory that telephone companies, like electric utilities, were natural monopolies.
- Independent companies asserted that they could, indeed, compete with AT&T.
- The law allowed long-distance telephone companies such as AT&T, as well as cable television and other start-up companies, to begin entering the local telephone business.
- It said the regional monopolies had to allow new competitors to link with their networks.
- Countless Internet service providers sprung up to link households to the Internet.
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- Contractual saving institutions are insurance companies and pension funds.
- Insurance companies provide protection for people who buy insurance policies.Insurance policy prevents financial hardship, such as a medical emergency, car accident, or the death of a family member.Insurance companies are financial intermediaries because they link the funds from the policyholders to the financial markets.Policyholders make periodical payments to the insurance company called premiums.Insurance company will invest the premiums in the financial
- Second type of insurance company is property and casualty insurance companies.They are organized as either a stock company or mutual company, and they insure against theft, floods, illness, fire, earthquakes, and car accidents.These companies tend to purchase liquid, short-term assets because these companies cannot accurately predict the amount of future claims.Insurance companies charge premiums that correspond to the chance of the event occurring.For example, a homeowner in California would pay a higher premium for earthquake insurance than a homeowner in the Midwest of the United States because California experiences more earthquakes.
- Employers have three reasons to offer pension plans to employees.First, the pension fund managers can more efficiently manage the fund, lowering the pension funds' transaction costs.Second, the pension funds may offer benefits such as life annuities.A life annuity is a worker contributes money into the annuity until he retires.Then the worker receives regular payments every year from the annuity until his death.Life annuities could be expensive if a worker buys them individually.However, a large employer with many employees can request discounts from pension plans.Finally, the government does not tax the pension fund as workers invest funds into it, allowing the fund to grow faster.Nevertheless, government usually imposes taxes on withdrawals from a pension fund.If the employer offered higher wages and no pension plans to the employees, then the government taxes the greater income, reducing the amount an employee could invest into a retirement plan.
- Federal and state governments regulate the pension funds.Regulations require the managers of the pension funds to disclose all investments.That way, employees know which securities the pension fund managers have invested in.Regulations help prevent fraud and mismanagement.Unfortunately, a pension fund will bankrupt, when the company where the employees work bankrupts.Consequently, Congress created the Pension Benefit Guaranty Corporation that insures pension fund benefits up to a limit if the company cannot meet its obligations.Some economists believe a pension fund disaster will occur for state and local government retirees after 2012.Many state and local governments offered generous defined-benefit plans to public employees, and they have not placed enough money aside to fund the pension plans.
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- In the last 40 years, savers and borrowers have become linked through the international financial markets.
- For example, a Japanese bank transfers funds from savers in Japan to lend to a company that builds a new factory in China.
- Unfortunately, international banks pose many problems for government regulators.
- International banks transcend the functions of a domestic bank because they link savers and borrowers across different countries.
- International banks link savers and borrowers from different countries across the world, crossing international borders.
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- This chapter explains how financial markets link the savers to the borrowers.
- Savers link to the borrowers through two routes: financial intermediaries and direct finance.
- Common financial intermediaries include banks, mutual funds, and insurance companies.
- Second route links savers to the borrowers through direct finance.
- On the other hand, if you directly invested in a company that bankrupts, then you could lose all of your investment.
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- Levels of executive pay have been controversial in recent times, with only tenuous links between executive pay and company performance.
- Typically, the chief executive officer (CEO) directs the fortunes of the company.
- It is typically a mixture of salary, bonuses, shares of and call options on the company stock, benefits, and perquisites, ideally configured to take into account government regulations, tax law, the desires of the organization and the executive, and rewards for performance.
- Portfolio company executives take a pay cut but are routinely granted stock options for ownership of 10% of the portfolio company, contingent on a successful tenure.
- During the financial crisis of 2008, many CEOs led their companies into insolvency and bankruptcy yet were still given huge pay packages.
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- Inflation linked bonds (linkers) are those in which the principal amount and the interest payments are indexed to inflation.
- Treasury Inflation-Protected Securities (TIPS) and I-bonds are examples of inflation linked bonds issued by the U.S. government.
- First the liquidator is paid, then government taxes, etc.
- Some companies, banks, governments, and other sovereign entities may decide to issue bonds in foreign currencies because it may appear to be more stable and predictable than their domestic currency.
- Bond of National Loan issued by Polish National Government in 1863.
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- There are two types of government-initiated monopoly: a government monopoly and a government-granted monopoly.
- There are instances in which the government initiates monopolies, creating a government-granted monopoly or a government monopoly.
- In a government-granted monopoly, the government gives a private individual or a firm the right to be a sole provider of a good or service.
- Additionally, the Dutch East India Company provides a historical example of a government-granted monopoly.
- The state-owned petroleum companies that are common in oil-rich developing countries (such as Aramco in Saudi Arabia or PDVSA in Venezuela) are examples of government monopolies created through nationalization of resources and existing firms.
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- Bremmer states, "In this system, governments use various kinds of state-owned companies to manage the exploitation of resources that they consider the state's crown jewels and to create and maintain large numbers of jobs.
- They use select privately owned companies to dominate certain economic sectors.
- The definition of free enterprise is a business governed by the laws of supply and demand, where the government has no involvement in its decisions or actions.
- This is an example of capitalism in which government policies generally target the regulation and not the money.
- Economists usually emphasize the degree to which government does not have control over markets (laissez faire), as well as the importance of property rights.