4.

Discuss the corporate governance practices of Japan, Germany, United Kingdom, and China.

Compare and contrast those practices to the ones in United States.

5.

Discuss the problems of corporate governance

6.

Discuss the mechanisms of corporate governance

Explain the economic changes in northern states of the United States in the early 1800s. How did industrialization, urbanization, the market revolution, and the transportation revolution change America? What were its effects on society and culture?

John files a return as a single taxpayer. In 2019, he had the following items: ∙ Salary of $30,000. ∙ Loss of $65,000 on the sale of Section 1244 stock acquired two years ago. ∙ Interest income of $6,000. In 2020, John again files a return as a single taxpayer and had the following items: Salary of $114,000 Loss of $55,000 on the sale of Section 1244 stock acquired three years ago. Capital gain of $22,000 on the sale of publicly traded stock purchased one year ago. Determine John’s AGI for 2019 and 2020 (assume these are the only transactions, no other carryovers etc...)

On January 1, 2019, Jasper Company acquired 400,000 of Huckleberry Company's 1,000,000 shares at a cost of $1,600,000 and began applying the equity method. At the time, Huckleberry Company's equity included $2,000,000 of capital stock and $2,000,000 of retained earnings. During year Year One, Huckleberry Company reported a $500,000 income, but did not pay any dividends. On January 2, 2020, Jasper acquired an additional 200,000 shared of Huckleberry at a price of $6 per share. At what time should Blue value its investment in Huckleberry on January 2, 2020?

$2,800,000

$3,000,000

$2,600,000

None of the above

Cities, States, and Businesses Lead the Way to Reduce Greenhouse Gases

Although the United States signed the original Kyoto Protocol, the U.S. Congress never ratified the agreement so the protocol has never been legally binding on the United States. The administration of President George W. Bush argued that there was no scientific consensus on global warming and that the costs of reducing greenhouse gases were simply too high. However, many state and local governments felt they had waited long enough for change at the federal level. In 2005, mayors from 141 cities and both major political parties gathered in San Francisco to organize their own efforts to reduce the causes and consequences of global warming. Their goal was to reduce greenhouse emissions in their own cities by the same 7 percent that the United States had agreed to in the Kyoto Protocol.

As of 2014, a total of 1,060 out of 1,139 mayors of U.S. cities had signed the U.S. Conference of Mayors Climate Protection Agreement. Among the reasons the mayors cited for supporting this agreement were concerns in their communities over increasing droughts, reduced supplies of fresh water due to melting glaciers, and rising sea levels in coastal cities. “The United States inevitably will have to join this effort,” Seattle mayor Greg Nickels said. “Ultimately we will make it impossible for the federal government to say no. They will see that it can be done without huge economic disruption and that there’s support throughout the country to do this.”

Similar actions are being taken at the state level. In 2005, then-governor of California Arnold Schwarzenegger stated at a press conference, “The debate is over . . . and we know the time for action is now.” In 2006, Governor Schwarzenegger signed the California Global Warming Solutions Act. The goal of the act was to bring California into compliance with the Kyoto Protocol by 2020, an effort that would require a 25 percent reduction in greenhouse gases for a state that, if a country, would be the tenth largest producer of greenhouse gases in the world. At the signing ceremony, the governor stated, “I say unquestionably it is good for businesses.” Indeed, a cost analysis by the California Air Resources Board in 2008 indicated that the law would add $27 billion to the economy of the state and add 100,000 jobs.

The California effort is gaining popularity around the country. In the northeastern United States, for example, nine states have joined together collectively to form the Regional Greenhouse Gas Initiative to control regional production of greenhouse gases. A similar group emerged in western North America when seven western states and four Canadian provinces joined together in 2007 to form the Western Climate Initiative. For both groups, the goal was to to regulate greenhouse emissions. By 2014, northeastern group continued to work together while the western group had a reduced membership that included only California and the four Canadian provinces.

A number of large businesses are also joining in efforts to reduce greenhouse gases. General Electric, for example, announced in 2014 that it had reduced its greenhouse emissions by 34 percent since 2004. In addition, the company has invested $12 billion for research and development of technologies that can reduce greenhouse gases and is planning to invest a total of $25 billion by 2020. In 2011, General Electric announced that its technology generated more than $100 billion in revenues, which confirmed that creating technology that would reduce greenhouse emissions was a profitable thing to do.

In 2013, the New York Times reported that a growing number of companies including Microsoft, ExxonMobil, and Google have developed long-term financial plans that include the cost of producing greenhouse gases. These companies recognize that the scientific evidence of human-caused global climate change continues to grow and that they will increasingly need to factor the costs of emissions into their budgets. Those companies that include plans to accommodate and reduce these costs are likely to profit from such planning.

From these stories, it is clear that progress on reducing greenhouse gases that cause global warming does not have to wait for national and international agreements to take effect. The public overwhelmingly understands that Earth is warming, states and cities are pushing forward with solutions that save money, and large corporations understand that reducing emissions can reduce costs and improve profits over the long term. In short, curbing greenhouse gases and global warming is not only good for humans and the environment, it can be good for business as well.

Critical Thinking Questions

1.What data might city mayors use to support their assertion that humans are causing global warming?

2.Why is it more effective for states and provinces to create regional partnerships to combat global warming rather than doing so alone?

A professor states that in the United States the proportion of college students who own iPhones is .66. She then splits the class into two groups: Group 1 with students whose last name begins with A-K and Group 2 with students whose last name begins with L-Z. She then asks each group to count how many in that group own iPhones and to calculate the group proportion of iPhone ownership. For Group 1 the proportion is p1 and for Group 2 the proportion is p2. To calculate the proportion you take the number of iPhone owners and divide by the total number of students in the group. You will get a number between 0 and 1.

• What would you expect p1 and p2 to be?
• Do you expect either of these proportions to be vastly different from the population proportion of .66?
• Would you be surprised if p1 was different than p2?
• Would you be surprised if they were the same or similar?
• What statistical concept describes the relationship between the first letter of someone's last name and whether or not they own an iPhone?

From the data for 46 states in the United States for 1992, Baltagi obtained the following regression results:

                                              LogC=  4.3- 1.34 log P +0.17 log Y

                                                    Se=(0.91)  (0.32)       (0.20)                                    R²=0.27

Where C= cigarette consumption, Packs per year

              P= real price per pack

              Y= real disposable income per capita

1. What is the elasticity of demand for cigarettes with respect to price? Is it statistically significant?
2. What is the income elasticity of demand for cigarettes? Is it statistically significant?
3. What is the overall significance of the regression? Which test do you use?  

From the data for 46 states in the United States for 1992, Baltagi obtained the following regression results:

                                              LogC=  4.3- 1.34 log P +0.17 log Y

                                                    Se=(0.91)  (0.32)       (0.20)                                    R²=0.27

Where C= cigarette consumption, Packs per year

              P= real price per pack

              Y= real disposable income per capita

1. What is the elasticity of demand for cigarettes with respect to price? Is it statistically significant?
2. What is the income elasticity of demand for cigarettes? Is it statistically significant?
3. What is the overall significance of the regression? Which test do you use?  

A professor states that in the United States the proportion of college students who own iPhones is .66. She then splits the class into two groups: Group 1 with students whose last name begins with A-K and Group 2 with students whose last name begins with L-Z. She then asks each group to count how many in that group own iPhones and to calculate the group proportion of iPhone ownership. For Group 1 the proportion is p1 and for Group 2 the proportion is p2. To calculate the proportion you take the number of iPhone owners and divide by the total number of students in the group. You will get a number between 0 and 1. What would you expect p1 and p2 to be? Do you expect either of these proportions to be vastly different from the population proportion of .66? Would you be surprised if p1 was different than p2? Would you be surprised if they were the same or similar? What statistical concept describes the relationship between the first letter of someone's last name and whether or not they own an iPhone?