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Dramatic Tension

How to use word selection and


strong grammatical structures to
build drama that grabs and holds
readers.
The World in Three Acts
The same basic writing structure:

Journalism
TV Commercials
Novels
Screenplays
Literature
Act 1
Introduce the characters or key elements

Act II
Develop the characters, introduce the
conflict, develop the conflict

Act III
Resolve the conflict, provide a solution
and/or conclusion
Romeo & Juliet
Romeo meets Juliet and falls in love because she
looks better than her sister, even though they’re from
warring families.
They secretly marry, but people find out and start
trying to expose them, while Juliet’s father unwittingly
plots to marry her to another man.
Juliet tries to escape her family by faking her death,
but the plan to inform Romeo fails. Romeo comes to
believe Juliet is dead, so goes to her fake deathbed and
commits suicide. Juliet wakes up, discovers Romeo’s
death and then kills herself for real.
Bankers & Consultants Video
Act I
Bankers think of themselves as the most elite professionals
on Wall Street because they are paid a lot and like to
show off their money. Consultants believe they have
more rewarding careers overall.
Act II
Members of the two groups confront each other on the
street and stage a rapping contest to see who can
humiliate other best in rhyme to a beat.
Act III
Bankers defeat the consultants by demonstrating their
supreme confidence in themselves in an amusing mix of
rap rhymes and finance business slang.
Seven Samurai
 Bandits threaten a village, which has no weapons
and little fighting skill to defend itself.
The villagers cannot easily hire samurai to defend them,
because they have little money and, in the past, samurai
have raped their daughters. They decide to find samurai
who work cheaply, and after they succeed, the samurai
arrive only to be disappointed that they are not warmly
greeted by locals.
The samurai and villagers learn to trust each other
and thereby defeat the bandits.
Typical M&A Deal
Act 1
Company A buys company B to gain company B’s
revenue and assets.
Act II
Company A had to pay an amount that some say
was too high and others say was a good deal.
The new merged company will face challenges
x,y and z in their industry.
Act III
People in a position to know and who have a
track record of being right say the merger was a
good idea, or say it was a bad one.
Sources of Dramatic Tension in Financial Writing

Conflict – winners and losers, follow the money,


past versus future

Surprise – you thought this, but that

Importance – first, most, last, least, best, worst


Words, the atoms of structure
 Verbs and nouns
 Concrete vs abstract
 Specific vs vague
 Simple vs complicated
 Familiar vs unfamiliar
 Layman's terms vs jargon

Business & Finance Writing Winter 2010 9


Homework Review
The US economy grew its fastest rate since 2003, the
fourth quarter GDP report on Friday revealed. Pick up in
business investment mainly contributed to annualized
rate of 5.7 percent growth. The faster than expected
growth and the acceleration from 2.2 percent in the third
quarter raised the hopes that a sustainable recovery is
under way.
The US economy grew its fastest rate since
2003, the fourth quarter GDP report on Friday
revealed. Pick up in business investment
mainly contributed to annualized rate of 5.7
percent growth. The faster than expected
growth and the acceleration from 2.2 percent
in the third quarter raised the hopes that a
sustainable recovery is under way.
The US economy grew a better-than-
expected 5.7 percent, the fastest since 2003,
driven mainly by an increase in business
investment.
Fourth-quarter growth was more than double
the previous three month period’s 2.2 percent,
the government reported Friday, raising
expectations for a sustainable recovery.

The US economy grew its fastest rate since its fastest rate
since 2003, the fourth quarter GDP report on Friday
revealed. Pick up in business investment mainly
contributed to annualized rate of 5.7 percent growth.
The faster than expected growth and the acceleration
from 2.2 percent in the third quarter raised the hopes
that a sustainable recovery is under way.
 On Wednesday, January 18th, Japan’s
Nikkei average dropped over 10 percent
after Toyota Motor announced to halt
sales and produces some of its most
popular vehicles which include the best-
selling auto in America, Camry in U.S due
to the fix sticking gas pedals that could
make the cars accelerate without warning.
 On Wednesday, January 18th, Japan’s
Nikkei average dropped over 10 percent
after Toyota Motor announced to halt
sales and produces some of its most
popular vehicles which include the best-
selling auto in America, Camry in U.S due
to the fix sticking gas pedals that could
make the cars accelerate without warning.
 Japan’s Nikkei average plunged over 10
percent today, the biggest drop since the
start of the financial crisis, after Toyota
Motor halted sales and production of some
of its most popular vehicles.

 The decline, led by a 14% plummet in


Toyota shares, comes as the nation’s
biggest carmaker expanded a global
vehicle recall that includes its best-selling
Camry model in the U.S.
 Toyota Motor recalled for the eight models, includes Camry,
affecting 2.5 million vehicles.

 On the other hand, Honda Motor said on Wednesday its profits for
the for quarter period increase 9 percent, \150billion in the quarter,
more than \10billion a year earlier.

 Paolo de Guzman, an auto analyst for consulting firm in NOK said
Toyota is one of the symbolic auto sectors in Japan and since
market anticipates that Toyota’s a \400 billion group operating loss
and a \300 billion group net loss for the business year ending in
March, investors pessimistic about business recovery and worry
about the double-dip recession for Japanese market.

 Toyota Motor will maintain its forecast of a return profit for the 12
months to March 31st. However, Toyota’s image of safe and high
quality will be damaged for a while.
 Daiichi Life Acquires Life Insurance Unit of
UOB in Thailand

 Daiichi Life Co. agreed Wednesday
with United Overseas Bank Ltd. to buy its
life insurance subsidiary in Thailand for
428 million Singapore dollars
(US$306.2million) to expand business in
Southeast Asia. The transaction is the first
acquisition by the second-largest Japanese
life insurer after it demutualized last
October.
 Daiichi Life Co. agreed Wednesday
with United Overseas Bank Ltd. to buy its
life insurance subsidiary in Thailand for
428million Singapore dollars
(US$306.2million) to expand business in
Southeast Asia. The transaction is the first
acquisition by the second-largest Japanese
life insurer after it demutualized last
October.
 Daiichi Life Co. paid 428million Singapore
dollars (US$306.2million) for the life
insurance unit of United Overseas Bank
Ltd. to expand its business in Southeast
Asia.
 Or even…
 Daiichi Life Co. bought the life insurance
unit of United Overseas Bank Ltd., the
Japanese insurers first acquisition since
demutualizing last October, to expand its
business in Southeast Asia.
 UOB, Singapore's third-largest bank by
assets, started writing life insurance in
1996 and operates in Singapore, Thailand
and Indonesia. As of December 31, 2009,
UOB Thai Life had about 60,000
policyholders with 80,000 policies and net
asset of S$244million. Daiichi Life will
distribute protection and savings products
through multiple channels it will succeed
from Thai Life.

Daiichi Life expects to benefit by selling
protection and savings products to
UOB Thai Life customers.
The unit of UOB, Singapore's third-largest
bank by assets, had about 80,000 policies
and net assets of S$244million as of last
year.

 Allan Cheng, UOB’s chief executive said, “The life unit is
a small contributor for us in the very competitive
industry and we decided to concentrate on our core
banking business by divesting the business.” UOB is
expected to receive a premium above the unit’s book
value, said one person familiar with the transaction.

 With the acquisition, Daiichi Life will accelerate its
growth strategy overseas with capital raised by
demutualization, specifically in the rapidly growing
Southeast Asian markets. The deal could spur
demutualization and M&A activity of other major
Japanese life insurers seeking opportunities outside the
saturated market.
 Kraft of the United States merges with Cadbury of the United
Kingdom to create the world’s largest confectioner pushing Mars of
the US out of the number-one place. At first rejected, Cadbury
accepted Kraft’s new, sweetened takeover bid on 19 January 2010.

 Kraft dangled 9% more cash than previously offered and slashed an
earlier move to create more shares to be offered to leverage the
deal. (A higher number of shares offered to leverage a deal dilutes
per share value of book value.) Kraft proposed and Cadbury agreed
to reduce the number of new shares to be offered to leverage the
deal from 370m to 265m, down some 30%.

 The deal consolidates US, British, European, Indian and Chinese
confectionary markets. One poison pill was union resistance; unions
fear that Cadbury factories may move to eastern Europe.


 Kraft has done its due diligence; Buffet, a controller of a
large number of Kraft shares (he supports the bid),
demanded that Kraft not be giddy about the low price
and offer too much; Kraft used kid gloves to protect
Cadbury’s wide goodwill and 186-year reputation (Kraft
106 years old.). The deal catapults the group to be the
number one confectionary in sales surpassing Mars.
Dividend yield

 Annual dividends per share divided by the


share price and expressed as a
percentage.
Index Weight

 The amount of shares outstanding that is


used in the calculation of an index.
The weight of a given share within an
index can tell you how much price moves
for that share will affect the index.
Outperform/Underperform

 To perform better than. Usually refers to


performance that is better than an
index or average that includes rival
securities or assets.
Float

 The number of shares available to the public. Float is


calculated by subtracting the shares held by insiders,
and those deemed stagnant shareholders, from the total
shares outstanding. Stagnant shareholders include
Employee Stock Ownership Plans, employee benefits
trusts, board members, directors, executives,
corporations not actively managing money, government
ownership, and venture capital companies.
Price earnings ratio

 A stock's price divided by earnings per


share. The ratio tells you how much
investors are willing to pay for the right to
a share of the company's future
earnings.
Market capitalization

 The number of shares outstanding


multiplied by the stock price. Market
capitalization is often used to compare the
size of companies.
Common stock

 A security that represents ownership in a


corporation. Holders of common stock exercise
control by electing a board of directors and
voting on corporate policy. Common
stockholders are on the bottom of the priority
ladder for ownership structure. In the event of
liquidation, common shareholders have rights to
a company's assets only after bondholders,
preferred shareholders and other debtholders
have been paid in full.
Preferred stock

 Shares that have a higher claim on the assets and


earnings than common stock. Preferred stock generally
has a dividend that must be paid out before dividends to
common stockholders and the shares usually
do not have voting rights.
The precise details as to the structure of preferred
stock is specific to each corporation. However, the best
way to think of preferred stock is as a financial
instrument that has characteristics of both debt (fixed
dividends) and equity (potential appreciation). Also
known as "preferred shares".
Initial Public Offering (IPO)
The first time an issuer sells stock to the
public and is listed on an official exchange.
Short selling
 Selling a borrowed security in anticipation
of gaining by buying it back at a lower
price before returning it to the lender.