Validity, reliability and generalization
Result of calculation that I estimated from historical data is not describe the future cash flows, but some of the result I assumed as constant over the life of the contract (project), foe example the risk-free interest rate or RADR the validity of this figure is variables and has assumptions. It is clearly arguable.
The lot of contract (projects) incorporating uncertainty as well as flexibility, the risk and return characteristics are changing with the period of implementation of the contract. Therefore, a single risk-adjusted discount rate is not appropriate in calculating the value, but I use the single discount rate, because if I would use several discount rates for estimation the contract value this process could be extremely sophisticated. The main purpose of this research is to create the simplicity and the transparency method of estimation the across-border contract, and to make it easy for average manager to recognize the value of contract, and make decision about accept or reject the contract.
THEORIES
Principal-Agent Problems
The ownership of corporate wealth and control over become more widely dispersed. Ownership of business without control and control of business without ownership are the logical questions of business development. The separation of functions to control is the problems of apart from ownership and apart from management. The “control” Adolf A. Berle & Gardiner C. Means recognize as force “of the individual or group who have the actual power to select the board of directors…”[1]. The control is defined a wide variety of situations and conditions. Can be distinguished the five major types of control: (1) control through almost ownership, (2)majority control,(3) control through a legal device without majority ownership, (4) minority control or control through a legal device, (5) management control. The fists three are forms of control linking on legal base and the right to vote a majority of voting stock. The last two are the minority and management control.
(1) Control through almost complete ownership.In this case may be batter called this situation the private business, in which are the single individual or small group owners. They are in position of control, this means that they are having the legal powers of ownership and use of them, and in position to elect and dominate the management. The ownership and control are combined in the same hands.
(2) Majority control. The separation of ownership and control involves ownership of majority of the business. The ownership of a majority of the business by a single individual or small group gives to this group all the legal power of control such a sole enterprise and particular to select the board of directors. The concentration control of majority (in the “legal device”) means that the minority have lost most of the powers of control over the business of which they are part owners. The separation of ownership and control for minority in this case is well complete, but majority the two functions are combined. A group of individuals cannot combine their capital effectively in a single enterprise without a loss of control by members of this group. The granting of control to a majority of enterprise is a natural and generally acceptable step. Most interest of minority owner is parallel of interest of majority and this loss of control is not serious problem for minority. When the interest of majority and minority are in opposed and the interest of the minority are not protected by low are the minority owners might have problems. The separation of ownership and control has passed beyond of the separation represented in majority control. In most case control is maintained with relatively small proportion of ownership.
(3) Control through a legal device without majority ownership.To maintain control of a business without ownership of a majority usually use the device of “pyramiding”. This involves the owning of a majority of the business of one company which in turn holds a majority of business of another company. It might be the smaller proportion but it is provide to use this situation as method of control legally entrenched. The owner of a majority of the business of the company at the apex of pyramid can have complete control of the entire property and a sole owner even through his ownership interest is less than one per cent of the whole. Same pyramiding has been employed in building up of the public utility system. The legal control can be maintained with an extremely small investment. Through it, legal control can be effectively divorced from legal ownership and factual power. Same ways of securing legal control through direct or indirect ownership of the voting majority.This is the organizing a voting trust. The voting trust separates control from all ownership interest. Control through a voting trust is differing from the other forms of legal control, and from the forms of factual control. The voting trust, making an effective device for maintaining control without ownership. This methods of control involves little ownership interests. The legal control, factual control apart from legal control may involve different degrees of ownership, but all this method of control must involved a legal status.
(4) Minority control. Minority control exist when an individual or small group hold stock interest in position of dominate in company. Often said that this group has the “working control” of the company. This control usually exists when “working control” group is combined minority interest to control a majority of the votes at the annual elections. Minority control may be maintained over a period of years. In case where the exist same kind of control it could be change the company costs. This is a serious problem on minority control. That is why in this case the company may have that the management may be antagonistic to minority. Most strikes are illustration of this fight for control.
(5) Management control. This type of control is when ownership is widely distributed that no individual or small group has a minority interest large enough to dominate the affairs of the company. The factual control sometimes is not found in the any single group and such situation is providing the management control of the company. This situation might be existing when the stock is widely distributed. The controlling minority can depend on cooperation with management and controlling management may have to accede in a measure to the demands of a strong minority in order to maintain its measure of control, but a minority and a management could combine as “control”. In such it is possible to say that control is divided between two parties and could refer this situation as» joint control”. Management control appears in many forms and relatively defined and relatively stable legal position, loosely defined and somewhat more precarious factual situations.
The Principal-Agent problems to control of the enterprise possible to distinguish three function: that of having interests in an enterprise that of having power over it and that of acting with respect it. The divergence between ownership and management is part one between position and action.