According to the instruction Essay Example | Topics and Well Written Essays - 1750 words

According to the instruction - Essay Example The Bosman case came about for the reason that of a Belgium player going by the name Jean-Marc Bosman (Rafaeel, 1997). He had a contracted with the RFC liege. However, his contract had expired and opted for a transfer to the French side Dunkerque(Faridah.p78,2001).Due to the systems during the time Liege refused to let Bosman leave without transfer fee being paid in which Dunkerque was not willing to pay. However, Bosman argued that, being a European Union citizen, he was fully entitled to the freedom of movement within the premises of European Union to earn a living. In the contrary the system of transfer prohibited him from exercising his exact right of freedom of movement. Following these disagreements which arose from the transfer saga Bosman argued that changes in system and policy should be effected to allow players whose contract had ended with a certain club could freely move to another club without the payment of the transfer fee (Inuendo, 2003). The European court of justice held the proceedings and it found favour of Bosman and it was against Liege football club, the football association of Belgium and the UEFA. It emerged that two very vital decisions arose from the court declaration: For out of the contract players it was illegal to pay the fees for transfer of players where a player was shifting from one club to another or between one nations of the European Union to the other. Commencing those only players still on service with their club teams is required to pay the transfer fees. Moreover, the prohibitive ration were rendered to be against the law. It was free for the clubs to have as many foreign players in their teams as they wished from other countries within the European union sphere of influence.(Gary.p89,1997) The situation before the Bosman ruling was pathetic with the reference on the transfer of players and the quota systems. Before the ruling, a football player

Financial Leverage Essay Example | Topics and Well Written Essays - 2250 words

Financial Leverage - Essay Example Higher expected returns are associated with the firms that are having high financial leverage ratios when the economy of a country is normal. Whereas, when the economy of a country is in recession so firms having high financial leverage ratios will face risk of loss. On the other hand, firms having low financial leverage ratios are supposed to be less risky but higher expected returns are not associated with these firms. IMPORTANCE OR AIM OF THE STUDY The importance or aim of this study is to show that analysts use financial leverage ratios to accomplish two things: †¢First, they are a measure of the extent to which firms finance their assets through debt. †¢Second, they are the indicators of the financial risk of the firm. Analysis of a firm’s financial leverage ratios is essential to evaluate its long-term risk and return prospects. Leverage as a debt-financing indicator is important because whenever a firm’s rate of return on assets is in access of interest rate, the profits to equity investors are magnified in direct proportions to increases in leverage. The reverse also holds true-whenever the rate of return falls below the interest rate, the profits to investors decline with increases in leverage. In fact, if the firm is sufficiently levered, interest expenses may be so high that under adverse economic conditions the firm may not be capable of paying them-that is, financial risk is directly proportional to leverage. In conclusion it can be said that analysis of a firm’s financial leverage ratios is essential to evaluate its long-term risk and return prospects. Leveraged firms accrue excess returns to their shareholders so long as the rate of return on the investments financed by debt is greater than the cost of debt.