Corporate Finance Research Papers

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  • Topic: Subsidiary, Holding company, Conglomerate
  • Pages : 16 (5504 words )
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  • Published : July 9, 2008
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Name of the Researcher – Dr. Y. S. Vaishampayan

Abstract:
The Role of Subsidiary Companies from the Perspectives of Growth and Development THEME - Role of Competition, Flexibility and Trade in Economic Growth

This Research Paper throws light on the efforts of Indian corporations in their objectives of maximization of shareholders wealth. To achieve this, they have taken the route of subsidiarization. This Paper only takes the results achieved by Indian business corporations in fulfilling the objective of maximization of shareholders wealth, to some extent by studying the financial relationship between the holding companies and their subsidiaries. For achieving this objective, various strategies have been employed by different companies. Growth refers to expansion, rise, progress, success, and improvement of a specific organ through development. Growth may be achieved in vertical direction or horizontal direction or both ways at a time. To what extent corporation achieves this through the route of formation and development of subsidiaries, is being traced through a financial relationship established between the holding companies and their subsidiaries. In a nutshell, the researcher exploited the subject for this study in context of the following two questions: 1)Do subsidiaries help financially a holding company in achieving the primary target or objective of growth? 2)If yes, then how and to what extent?

These questions have been answered on the basis of collection of available data, analysis of facts, and conclusions drawn.

BRIEF INTRODUCTION OF THE RESEARCHER

NAME - DR. YASHAVANT S. VAISHAMPAYAN
INSTITUTE – SINHGAD INSTITUTE OF MANAGEMENT,
VADGAON (Bk.), PUNE – 411 041
RESIDENCE – G-15, GANESH PARK, MANIKBAG,
SINHGAD ROAD, PUNE – 411 051
PH. RESI. – 020 – 24352868
MOBILE – 9881364934
e-mail – yashogeeta@hotmail.com, vaishampayan_yashavant@vsnl.net

EDUCATIONAL QUALIFICATION – M.COM., PH.D. (FIN. MGT.)
TEACHING EXPERIENCE – OVER 11 YEARS OUT OF WHICH 8.5 YEARS WITH UNIVERSITY OF PUNE. PRESENTLY WORKING AS PROFESSOR (RESEARCH CELL), VISHWAKARMA INST. OF MGT., PUNE

The Role of Subsidiary Companies from the Perspectives of Growth and Development THEME - Role of Competition, Flexibility and Trade in Economic Growth

INTRODUCTION:
This research paper throws light on the efforts of Indian corporations in their objectives of maximization of profits. To achieve this, they have taken the route of subsidiarization. A higher level of financial objective that business corporations ought to pursue in the form of enhancing the welfare of shareholders and thereby, fulfill the social responsibility of business in reaching the goal of social welfare, needs further academic pursuit. This research paper only takes the results achieved by Indian business corporations in fulfilling the objective of maximization of shareholders wealth, to some extent by studying the financial relationship between the holding companies and their subsidiaries.

BACKGROUND:
The one and only important theoretical financial objective of any corporation is to ‘maximize the wealth of shareholders’. Academicians, practitioners and professionals agree that maximizing of the wealth of shareholders is the only objective every company should have in the long run . For achieving this objective, various strategies have been employed by different companies. The core of all these strategies is “growth”. Growth refers to expansion, rise, progress, success, and improvement of a specific organ through development. Growth may be achieved in vertical direction or horizontal direction or both ways at a time. If a company wants to grow, there are three ways in which this can be attained : •The acquisition by taking over of other companies,

Mergers between companies, and
The forming and development of new subsidiaries by a company.

MAXIMIZING SHAREHOLDERS’ WEALTH:
There is a shift in the...
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