Transfer pricing in global business and ethical issues
Habibullah Munira
Business ethics are the accepted principles of right
or wrong that govern the conduct of business transaction. An ethical strategy is
a course of action that does not violate these accepted principles. Ethics are an
important part of the business environment and the business corporations assume
ethical responsibilities. International managers carry the heavy task of formulating
organizational policies and standards by combining the law, the ethical business
principles, the local cultural values and the organizational standards. The ethics
from this perspective ask for the managers’ catalyst role to take fair actions from
a social point of view representing a guide in making and evaluating the business
decisions. Transfer pricing is the setting of the price for goods and services sold
between controlled (or related) legal entities within an enterprise. Legal entities
considered under the control of a single corporation include branches and companies
that are wholly or majority owned ultimately by the parent corporation. Transfer
pricing results in the setting of prices among divisions within an enterprise. In
principle, a transfer price should match either what the seller would charge an
independent, customer, or what the buyer would pay an independent arm's length supplier.
While unrealistic transfer, prices do not affect the overall enterprise directly,
they become a concern when they are misused to lower profits in a division of an
enterprise that is located in a country that levies high taxes and raise profits
in a country that is a tax haven that levies no or low taxes. Transfer pricing is
the major tool for corporate tax avoidance referred to as profit shifting. The paper
addresses the ethical issues arising and resulting with use of transfer pricing
Full Text
Split Impact on Companies Share Price
Khatri Namrata N.
A stock split refers to the division of stock. It may
either be split forward or in reverse. Stock split is the technique of psychological
pricing where new prices are more attractive to the incoming retail investors. This
paper focuses to study the effect of share split on company day to day return and
to study the fluctuation in return of the shares of the selected companies during
the pre-split and post-split. The data for the study is secondary and the analysis
of the data is done by using statistical technique like t- test. The analysis of
the data reveals that p-value of six companies is significant and there is significant
difference in mean return before and after split.
Full Text