The Dividend Policy at Linear Technology

The Dividend Policy at Linear Technology Linear Technoloy(LT) is a company founded in 1981 by Robert Swanson. Its area of actvity is development, production and marketing for semiconductors used in various electronic applications used by the communication industry to the automotive industry. It mainly focuses on the analog segment within the integrated circuits industry and, by market capitalization, it is the seventh-largest company listed on the Philadelphia Stock Exchange Semiconductor Index (SOX). Regarding its customer portfolio, the communication industry accounted for 33% of Linears sales, computers 27%, automotive 6% and the rest of 34% was divided by the rest of the industries. Linear Technologys Payout Policy Linears payout policy is comprised out of two elements: dividend payout and stock repurchase. In general companies decide to payout dividends after transitioning from a high growth stage to mature and stable stage. (Grullon Michaely, 2004). Linear started paying dividends in 1992. This decision was based on good expectations regarding the analog circuits market and the fact that Linear had a top position in the industry. Also the CFO of the company points out that, since the IPO, the company had positive cash flows. Thus paying out dividends would signal a strong position in a risky market and the transition to a more mature state of the company. As observed by some investors the technological companies had been just reaching that stage when paying out dividends was possible. The initial price for a share was set at US$0.05. This amounted for 15% of the total earnings of the company in the fiscal year of 1994. The relative low level was based on two principles. The first principle w as that dividend payout demands a certain respect from investors so in order to send the right signal into the market and attract new investors, the company had to pay dividends. This in turn would mean a thoughtful payout ratio that the company could sustain over time thus leading to the second principle. This states that a low level for dividends would better suit the company in the event of less than expected earnings. In this case the company would not have to cut down or even stop paying dividends. Thus a bad signal to the investors is avoided. Since 1992, the payout ratio has been growing steadily, getting close to 25% in 2003. Considering that 2002 meant a decline in sales and earnings, the company board and its management is debating on whether to increase the ratio or to keep it into accordance with company earnings. The CFO of Linear is confident that the business prospects and the cost structure can support an increase and he expects that this increase will send a good si gnal to investors. From the repurchase point of view, as stated by Paul Coghlan, CFO of Linear, one primary reason that we buy back the stock is to offset the exercise of employee stock options. Another reason was also the market conditions. The low interest rates offered by Linears high-grade security investments encouraged the company to use the cash-at-hand to buy back shares thus making a better use of the cash balance. A third reason was that, despite a large cash balance the company did not have any acquisition plans. The company repurchased shares sporadically between 1993 and 2001, and quarterly since then but again without any obvious pattern. Considering both elements, the companys mixed payout policy attends to all shareholder requirements by increasing the level of dividends quarterly and by managing in a conservative way a large cash balance. What are Linears financing needs? LTs income statement and revenue growth seems to be relatively stable over the past 11 years (1992-2002) with the exception of the boom during the peak(2000-2001) of the IT bubble and the bust after the burst of this bubble(2002). However even in economic downfall LT still managed to obtain a positive net income and net cash flow. This is due to LTs limited costs set up and relatively low financing needs. It is stated that in the semiconductor industry, research development investments, capital investment in new fabrication facilities, and retaining top engineers are of crucial importance. LT focuses on analog semiconductors and as such has stable and modest research and development costs. The analog fabrication facilities investments are more durable and account to a relative investment of approximately 20million per year. Finally LT uses a bonus structure for its executive compensation, keeping salary expenses lower when sales revenues decline. Additionally LT expresses little des ire in excessive investments, cash is handled very conservative with investment strategy in predominantly short-term debt securities, however LT is looking at potential business opportunities in the Asian markets, , if LT was to proceed with this plan this would increase its financing needs substantially. All in all resulting in a relatively low financing need for LT with regards to internal factors. With regards to external factors LT could endure financing needs resulting from market risks and the unclear effect of the Iraq war on the American economy, this results in the need for LT to hold a higher cash reserve. We will address this issue more in depth in the subsequent part. Should Linear return cash to its shareholders? Some shareholders have recently expressed the desire for LT to return its cash, however this desire is not necessarily shared by all shareholders. Theoretically returning Cash to the shareholders can reduce agency conflicts because it reduces cash in hands of the firm which can be invested in bad projects. It also reduces the costs of underinvestment if LT decides not to invest this cash it holds. The agency conflict seems relatively small considering LTs investment behavior and thus would be of relatively little importance when considering if LT should return cash to its shareholders. However asymmetric information exists and shareholders are unaware whether or not LT will remand its current investment policy. Additionally returning cash to the shareholders can give positive signals to the market about the future prospects of the firm. This could be of great potential importance considering the industry in which LT operates and the recent economic downturn this industry experienced. Conversely, if LT was to hold on to the cash this would preserve their liquidity levels which would both allow the firm to invest in positive NPV projects without entering the capital market, and additionally create a cushion against potential economic or financial distress. Regarding the financial cushion aspect of holding cash, if LT returns cash to its shareholders it should not return the full 1,5billion, but considering the current economic situation should preserve at least $200mto cover unexpected expenses. In the past LT has not shown great interest in investing other than in short-term securities, however, LT has been looking for business opportunities in the Asian market, holding cash in the firm increases the firms potential to respond to such an opportunity when it comes along. Bearing in mind LTs sales earnings, cash flows, and investment practices, it becomes evident that current dividend payments are not at the level they could potentially be. As observed by Janus Ca pital, the largest single holder of LT stock, current dividend payments are merely a token relative to the level of cash LT holds, therefore it would be possible for LT to increase its current dividend level. The problem with dividend payments its inflexibility, once LT decides to increase its dividend payments it will be hard for them to return this to its current level at a later stage. Currently LTs dividend payments is at a competitive level with respect to its peers on the Philadelphia Stock Exchange Semiconductor Index (SOX) and other technology companies. As stated in the case even a penny increase in dividend level will move the payout ratio to a level above most other technology levels. This brings us to the question why a company would decide to payout dividends. Commonly corporations at a mature stage without many growth opportunities and a stable positive cash flow. As discussed earlier LT can be identified as a relatively stable and mature company with stable costs and relatively stable growth. However as a technology company, LT is sensitive to the market, which has become evident in its 2000-2003 results. During the IT bubble LT performed exceptionally well, but after the burst sales dropped with 47% relative to the year prior. However, looking at the figures of 2003 we can see that LTs sales recover quite quickly, ending 2003 with approximately $602m in sales, which is in line with 5 year sale average ($636m). It could therefore both be argued that growth is not stable for LT and thus dividend payments are relatively risky for LT with regards to market reaction when dividend payments are reduced. However, growth has always (with the exception of 2002) been positive and LT could thus be deemed relatively safe. (Graham et al, 2005) Usually repurchases are used when the firm holds an excess in cash e.g. to reduce agency conflicts and underinvestment. Dividend increases relate more to an excess in free cash flow. In the case of LT, the firm holds a n excess in cash but due to economic situation over the past two years does not have a relative high free cash flow. In this respect LT is looking to reduce excess cash, thus cash returns via repurchase would be more in line with firm performance. When considering how to return cash to the shareholder tax matters but in a second-order manner (Brav et al (2005)). This is due to the fact that value return to shareholders is financed after tax payments and thus the manner of returning value to shareholders with respect to taxes affects predominantly shareholders. Shareholders, under current tax system, pay relatively more tax on dividend than on repurchases. However, the tax argument is only applicable for those shareholders who are indifferent towards holding or selling their share, long term shareholders would prefer dividend payments regardless of tax difference. If new tax proposal would pass there would be no tax difference with capital gain for shareholders thus with regard to ta xes they would most likely prefer dividend payments. However repurchases reduce the number of outstanding shares and thus increase EPS and share prices. Even though share prices will increase with dividend increases also, when dividend payments are increased and the firm at a later stage, cannot pay these dividends or reduces them this results in a decrease of share price, where a non-continuum of repurchasing practices has no effect on later share prices. Additionally if the firm does not want to reduce or cancel dividend payments for this reason they might decide to split the stock, increasing the number of outstanding shares and thus decreasing the EPS. Therefore both shareholders and firms should only prefer an increase in dividend payments over repurchases when cash flows and growth rates are stable for the firm with little or no expected future change, even when tax rates are set to be equal. With regard to the option compensation for executives, the repurchases would induce m ore value than would dividend increase, which should be considered in an industry where there is talent competition. Concluding, LT should return some of its cash to its shareholder, however, not all cash should be returned, and preferably not through an increase of common dividend payouts. This will be further discussed in section 5 of this report. What are the tax consequences of keeping cash inside the firm? In the event that LT would decide to keep the cash within the company instead of paying out to its shareholders LT will endure certain costs with respect to taxes. The benefit of keeping the cash in the company means that LT will have the liquidity needed to enter in NPV projects when opportunities arise without needing to access the capital market for costly funding. However, with respect to taxes, not entering the capital market for funding can be deemed inefficient due to the tax deductibility of debt and interest payments on levering. At a 30% corporate tax rate the marginal value of a dollar is thus lower for a firm not using debt financing (Martà ­nez-Sola et al (2009)). This can be identified as an opportunity costs of keeping cash within the company instead of returning this to its shareholders. Being identified as a cost of returning cash to the shareholder and a benefit of keeping the cash in the company, liquidity allows LT to invest and thus potentially earn interest on the cash. LT maintains a conservative investment strategy and predominantly invests in short-term debt securities. This, as identified in the case, in recent years resulted in a low interest return to LT, encouraging LT to return more cash to its shareholders. However, considering that only capital gains are taxed, this at any positive interest rate assumed the gain achieved by interest payment will be higher than the reduction in tax rates. Taxes can only be effectively reduced by increasing the payments to employees or research development with the use of sales revenue (thus reducing free cash flow), not existing cash, or by the use of debt financing. If Linear were to pay out its entire cash balance as a special dividend, what would be the effect on value? One significant target of the dividend distribution is to show investors that Linear has a good position on the market, and to buy shares from Linear Technology is not comparable with the risk which is usually associated with the purchase of shares from technology companies. With a dividend Linear Technology wants to reach investors that have income goals besides of growth goals. In case of a dividend distribution demand for shares will rise. If investors know that a dividend from a certain amount will be paid, the share price increases by the dividend that will be paid. In case of a share price of $30,87 and a dividend of $5,01 the new share price will rise to $35,88. As the dividend will be paid at a certain point of time investors are ready to pay the amount of the dividend additionally to the share price of $30,87, as the dividend will be paid out. Depending on the time until the dividend is paid not the whole amount of dividend is added to the share price. If there is still a certain period of time until the dividend will be paid, only the net present value of the dividend, which is announced will be added to the share price. It also can be said that the closer the payment of the dividend gets, the more the amount of the total dividend payment is added to the normal share price. That also means that consequently the market value of equity also will rise. At the day ex-dividend the share price will drop below the level of the pre-announcement day, as the dividend as driver of the rising demand had been paid. The additional value of $5,01 that were relied to the dividend is not part of the share value any more. The dividend, as part of the equity, is paid to the shareholder. The EBT will go down now as interest income decreases. Because of the decreasing interest income also taxes are declining. As the reduction on interest income is higher this does not play such a decisive role. Special Dividend Repurchase Nr of outstanding shares 312,4 312,4 Share value 30,87 30,87 Market Value 9643,788 9643,788 Special Dividend Paid 5,01 New Shareprice 1 35,88 Nr of Shares repurchased 50,70 New outstanding shares 261,70 Loss of interest income 46,96 EBT 273,44 Earnings 189,49 Earnings Per share $ 0,72 Figure Effects of repurchase or special dividend What if Linear repurchases shares instead?. The repurchase of shares is another option besides of a dividend distribution. Advantages of repurchasing shares is the reduction of systematic risk and cost of capital. Information and rumours about repurchase of shares will increase the demand before the repurchase date and therefore makes the repurchase more expensive. Usually a premium of one until ten per cent has to be calculated. To calculate the number of new shares that can be purchased the cash balance has to be divided by the new share price. To calculate the new market value the new share price with the total number of shares has to be multiplied. Therefore also the earnings per share would increase. On the other hand it should be taken in mind that normally the increase in share price is not from a long-term perspective. Primarily firms in low concentrated industries can benefit from an increase of the share price from a long-term perspective and can outperform the market. In more concentrated industries there will be no statistically significant change. In general the repurchase of shares has a negative effect on the share prices of competitors. Therefore often competitors mimic the behaviour and also do a repurchase of shares. (Massa, Rehman, Vermaelen, 2007) In the study of Grullon and Michaely it is shown that within a 6-year period the repurchasing firm benefits from an essential reduction in systematic risk in comparison to non-repurchasing firms. A negative effect of repurchasing are decreasing investment opportunities. This does not play a decisive role in this case, as in both options there would be a reduction of cash flow. Also in case of stock options for employees the repurchase of shares is an efficient possibility to control the market. To repurchase shares at the point of time when employees sell their rights of stock options makes it neutral from a trading perspective. As Mr. Coghlan stated that Linear Technology wants to offset the exercise of employees stock options with the repurchase of stocks. From the company and management side flexibility is the main advantage for repurchasing in comparison to dividend distribution (Brav, Graham, Harvey, Michaely, 2005). The flexibility can be used to increase repurchases when stock prices are low. Also the higher tax burden in case of dividends can be taken as an argument for repurchasing instead of paying dividends, although in the study it is shown that taxes do not play a primary role and that repurchasing does not change the investors clientele. This point which is also taken as an argument for paying out a dividend by Linear Technology can therefore be de-emphasised. Why do firms pay dividends? When a firm generates free cash flows it has to decide what to do with them. It can reinvest in positive NPV projects, if they are present, and increase the value of the firm. This practice is very common for young firms that pursue rapid growth and sometimes invest 100 per cent of their cash in this way. More mature firms, that operate in more mature market, however, do not always have these opportunities and hold more cash than there are potential positive NPV-projects to exploit. Such a firm with excess cash can either retain it in reserves or pay it out to shareholders. Two payout choices are: repurchases and dividends. When firms pay-out they have several reasons for it. Although not entirely proven, dividends are a possible tool to signal good news to the market and to prevent managers from exploiting free cash flows for their own benefits. The most important reason why dividends are paid, however, is the firms dividend history. Furthermore some firms issue dividends to get acc ess to a new set of investors. Each of these reasons will be discussed next. With asymmetric information in the market, meaning that mangers hold better information regarding future prospects of the firm than investors, payout decisions may signal information. The common practice for dividend paying firms is to smooth dividends and only cut them under extreme cases, which are addressed later, will cause the market to also believe the company is not able to rebound its earnings in the near term. It also implies that once the company increases dividends it signals that the company is able to afford the higher dividend with increased earnings (Berk DeMarzo, 2007). Although most managers no longer see payout policy as a tool to separate its company from competitors, it could be a reason for some to initiate dividends (Brav, Graham, Campbell, Harvey, and Michely, 2005). Especially when dividends are already part of historical business practice in these firms, and as management is very reluctant to cut dividends they will keep them in place. Another reason for man agers to pay out dividends is its ability to prevent agency conflicts as the otherwise free cash flow is no longer in the hands of management. Most managers, however, do not view payout policy as a means to self-imposed discipline. Access to new set of investors is also a reason why management will issue dividends (CASE). As different clienteles hold different preferences in income and in taxes to be paid, some have a stronger preference for dividends than others (Berk DeMarzo, 2007). To attract for instance mutual funds and European investors companies have more success when they issue dividends. Dividends are also more likely to attract retail investors as they prefer dividends over repurchases (Brav, Graham, Campbell, Harvey, and Michely, 2005). Why has the rate of dividend initiations changed over time? There has been a general trend away from dividends from the late 1970s through the rest of the twentieth century. In 1978, over 66 percent of the AMEX, NYSE, and NASDAQ firms paid a regular dividend. By 1999, only 21 percent were dividend payers. Below several reasons are listed for this trend, including: changing firm characteristics, more stock option compensation, US tax law, and dividends inflexibility. Besides, in the late 1950s the starting point for most payout decisions was the payout ratio (Lintner, 1956), while recently this is no longer a common practice for most firms. Firms that were going public in the 1980s and 1990s were early in their lifecycle, with considerable more growth opportunities than current profits (CASE). There tend to be fewer firms in this lifecycle that issue dividends (Graham et al, 2004). In a large part, technology firms, as Linear Technology, were driving this trend. Many of these firms were just about to reach the stage at which they were able to pay dividends, the stage where they began to earn regular and more predictable cash flows (CASE). But even large technology firms, that held stable cash flows, tended to restrain from dividends. One reason for this was the heavy use of stock option compensation. With the majority of their pay in options, managers are not likely to pay dividends as it does not benefit them that much. Furthermore when dividends are issued instead of repurchases, the outstanding amount of stock is increased once options are exercised, resulting in a decrease in the earnings per share (CASE). Although US tax law changed in 2003, making it more attractive to issue dividends, they still are at a tax disadvantage compared to capital gains that can be deferred. Until 2003 issuing dividends was thus even at an even bigger disadvantage to other forms of pay-out (Brav, Graham, Campbell, Harvey, and Michely, 2005). This, however, does not explain the downward trend in dividends, but it does explain why dividend s have never risen in popularity amongst managers. Unlike repurchases, managers are very reluctant to cut dividends and tend to smooth dividends. Among others, they are in most cases even more willing to forgo positive NPV projects, raise external funds, sell assets, or lay off sincere amounts of employees before cutting dividends. The asymmetry between dividend increases and decreases probably leads firms to restrain from issuing before having to resolve to the previously described in general unfavorable practices. Today managers are not so strict on payout ratios anymore. Furthermore, the speed of adjustment, by correcting dividends to their target, is not as high as it once was. This could be a result of the declined benefits of being close to the target or the higher cost of adjustment (Brav, Graham, Campbell, Harvey, and Michely, 2005). What should Paul Coghlan recommend to the board? All in all, if LT pursues to maximize shareholder value, it would not be advisable to increase dividends. Considering the current economic turmoil and the inflexible nature of dividend payments, dividend payments become undesirable. Additionally investing in new business opportunities would be beneficial for both the firm and the current shareholders. Although LT has not identified any positive NPV projects yet, there are opportunities in Asia, and therefore it would be wise for LT to return only part of its cash to the shareholders. They can best do this via a more flexible way such as special dividend or repurchases. Holding cash in the firm allows for a better credit rating when entering the capital market, when LT encounters a positive NPV project it wishes to invest in it can finance it partly by cash held and partly by debt financing. There is no ideal set up for cash returns but deriving from the advice of Rollins given in the case, it could be beneficial for LT to hold 1/4 of its cash as a cushion for economic turmoil, invest 1/4 of its cash in short-term securities to generate interest, hold 1/4 to be used in case of encountering good business opportunities, and return 1/4 to its shareholders via repurchases or a special dividend. This would still result in a $375m return for its shareholders.

Hinayan and Mahayn

Introductory Comparison of Hinayana and Mahayana Alexander Berzin Berlin, Germany, January 2002 [edited transcript] The Terms Hinayana and Mahayana The terms Hinayana (Lesser Vehicle or Modest Vehicle) and Mahayana (Greater Vehicle or Vast Vehicle) originated in The Prajnaparamita Sutras (The Sutras on Far-Reaching Discriminating Awareness, The Perfection of Wisdom Sutras). They are a rather derogatory pair of words, aggrandizing Mahayana and putting down Hinayana. Alternative terms for them, however, have many other shortcomings, and so therefore I shall use these more standard terms for them here. See: The Terms Hinayana and Mahayana. ] Hinayana encompasses eighteen schools. The most important for our purposes are Sarvastivada and Theravada. Theravada is the one extant today in Sri Lanka and Southeast Asia. Sarvastivada was widespread in Northern India when the Tibetans started to travel there and Buddhism began to be transplanted to Tibet. There were two main divisions of Sarvasti vada based on philosophical differences: Vaibhashika and Sautrantika. Hinayana tenet systems studied at the Indian monastic universities such as Nalanda, and later by the Tibetan Mahayanists, are from these two schools.The lineage of monastic vows followed in Tibet is from another Sarvastivada subdivision, Mulasarvastivada. [See: A Brief History of Buddhism in India before the Thirteenth-Century Invasions. ] Buddhas and Arhats There is quite a significant difference between the Hinayana and Mahayana presentations of arhats and Buddhas. Both agree that arhats, or liberated beings, are more limited than Buddhas, or enlightened beings, are. Mahayana formulates this difference in terms of two sets of obscurations: the emotional ones, which prevent liberation, and the cognitive ones, which prevent omniscience.Arhats are free of only the former, whereas Buddhas are free of both. This division is not found in Hinayana. It is purely a Mahayana formulation. To gain liberation or enlightenmen t, both Hinayana and Mahayana assert that one needs nonconceptual cognition of the lack of an impossible â€Å"soul. † Such a lack is often called â€Å" selflessness,† anatma in Sanskrit, the main Indian scriptural language of Sarvastivada and Mahayana; anatta in Pali, the scriptural language of Theravada.The Hinayana schools assert this lack of an impossible â€Å"soul† with respect only to persons, not all phenomena. Persons lack a â€Å"soul,† an atman, that is unaffected by anything, partless, and separable from a body and a mind, and which can be cognized on its own. Such a â€Å"soul† is impossible. With just the understanding that there is no such thing as this type of â€Å"soul† with respect to persons, one can become either an arhat or a Buddha. The difference depends on how much positive force or so-called â€Å" merit† one builds up.Because of their development of the enlightening aim of bodhichitta, Buddhas have built up far more positive force than arhats have. Mahayana asserts that Buddhas understand the lack of an impossible â€Å"soul† with respect to all phenomena as well as with respect to persons. They call this lack â€Å"voidness. † The various Indian schools of Mahayana differ regarding whether or not arhats also understand the voidness of phenomena. Within Mahayana, Prasangika Madhyamaka asserts that they do. However, the four Tibetan traditions explain this point differently regarding the Prasangika assertion.Some say that the voidness of phenomena understood by arhats is different from that understood by Buddhas; some assert the two voidnesses are the same. Some say that the scope of phenomena to which the voidness of phenomena applies is more limited for arhats than it is for Buddhas; some assert it is the same. There is no need to go into all the details here. [See: Comparison of the Hinayana and Mahayana Assertions of the Understandings of Voidness by Arhats and Buddha s. ] Further Points Concerning Buddhas and ArhatsThe assertions of Hinayana and Mahayana concerning arhats and Buddhas differ in many other ways. Theravada, for instance, asserts that one of the differences between a shravaka or â€Å"listener† striving toward the liberation of an arhat and a bodhisattva striving toward the enlightenment of a Buddha is that shravakas study with Buddhist teachers, while bodhisattvas do not. The historical Buddha, Shakyamuni, for instance, did not study with another Buddha. He studied only with non-Buddhist teachers, whose methods he ultimately rejected. In the fact that Buddha’s understanding and attainment id not arise from reliance on a Buddhist teacher, Theravada asserts that a Buddha’s wisdom surpasses that of an arhat. In addition, bodhisattvas work to become universal Buddhist teachers; shravakas do not, although as arhats they certainly teach disciples. Before passing away, Buddha himself deputed his arhat disciple Sharipu tra to continue â€Å"turning the wheel of Dharma. † According to Theravada, however, Buddhas excel arhats in being more skillful in methods for leading others to liberation and in the breadth of their conduct of teaching.This is the meaning of a Buddha’s being omniscient. However, according to this presentation, a Buddha would not know everyone’s address and would have to ask such information from others. According to the Vaibhashika school of Hinayana, Buddhas are actually omniscient in knowing such information, but they only know one thing at a time. According to Mahayana, omniscience means knowing everything simultaneously. This follows from its view that everything is interconnected and interdependent; we cannot speak of just one piece of information, totally unrelated to the rest.Hinayana says that the historical Buddha achieved enlightenment in his lifetime and, like an arhat, when he died, his mental continuum came to an end. Therefore, according to Hina yana, Buddhas teach only for the rest of the lifetime in which they achieve enlightenment. They do not emanate to countless world systems and go on teaching forever, as Mahayana asserts. Only Mahayana asserts that the historical Buddha became enlightened in a previous lifetime many eons ago, by studying with Buddhist teachers. He was just demonstrated enlightenment under the bodhi tree as one of the twelve enlightening deeds of a Buddha.The precursor of this description of a Buddha is found in the Mahasanghika School of Hinayana, another of the eighteen Hinayana schools, but is not found in either Sarvastivada or Theravada. [See: The Twelve Enlightening Deeds of a Buddha. ] Concerning Buddhas, another major difference is that only Mahayana asserts the three corpuses or bodies of a Buddha – Nirmanakaya, Sambhogakaya, and Dharmakaya. Hinayana does not assert them. Thus, the concept of a Buddha is significantly different in Hinayana and Mahayana. [See: Identifying the Objects of Safe Direction (Refuge). The Pathway Minds Leading to Liberation and Enlightenment Hinayana and Mahayana both assert that the stages of progress to the purified state, or â€Å"bodhi,† of either an arhat or a Buddha entail developing five levels of pathway mind – the so-called â€Å"five paths. † These are a building-up pathway mind or path of accumulation, an applying pathway mind or path of preparation, a seeing pathway mind or path of seeing, an accustoming pathway mind or path of meditation, and a path needing no further training or path of no more learning.Shravakas and bodhisattvas who attain a seeing pathway of mind both become aryas, highly realized beings. Both have nonconceptual cognition of the sixteen aspects of the four noble truths. [See: The Five Pathway Minds: Basic Presentation. See also: The Sixteen Aspects and the Sixteen Distorted Ways of Embracing the Four Noble Truths. ] Both Hinayana and Mahayana agree that a seeing pathway mind rids both arya shravakas and arya bodhisattvas of doctrinally based disturbing emotions, while an accustoming pathway mind rids them of automatically arising disturbing emotions.The former are based on learning the set of assertions of one of the non-Buddhist Indian schools, while the latter arise automatically in everyone, including animals. The list of disturbing emotions that shravaka and bodhisattva aryas rid themselves of is part of a larger list of mental factors. Each of the Hinayana schools has its own list of mental factors, while Mahayana asserts yet another list. Many of the mental factors are defined differently in each list. Both Hinayana and Mahayana agree that the course of progressing through the five pathway minds entails practicing the thirty-seven factors leading to a purified state.A â€Å"purified state† or â€Å" bodhi† refers to either arhatship or Buddhahood. These thirty-seven factors include the four close placements of mindfulness, the eight branches of an arya pathway mind (the eightfold noble path), and so on. They are very important. In anuttarayoga tantra, the thrity-seven are represented by Yamantaka’s thirty-four arms plus his body, speech and mind, as well as by the dakinis in the body mandala of Vajrayogini. The thirty-seven are a standard set of practices. The specifics of each practice, however, are often different in Hinayana and Mahayana. See: The Theravada Practice of the Four Close Placements of Mindfulness. See also: The Four Close Placements of Mindfulness According to Mahayana. ] Both Hinayana and Mahayana assert that the scheme of stream-enterer, once-returner, non-returner and arhat refers to stages of an arya shravaka’s path, but not to the path of an arya bodhisattva. Thus, stream-enterers have nonconceptual cognition of the sixteen aspects of the four noble truths, which include nonconceptual cognition of the lack of an impossible â€Å"soul† of persons.We should not think that stream-e nterer is a beginner level. So if someone claims to have achieved the state of a stream-enterer, be suspicious. Hinayana does not provide an extensive explanation of the bodhisattva pathway minds. Mahayana, however, explains that an arya bodhisattva’s path to enlightenment entails progressing through the development of ten levels of bhumi-mind. These levels of mind do not pertain to the path of shravakas. Both Hinayana and Mahayana agree that traversing the bodhisattva path to enlightenment takes more time than traversing the shravaka one to arhatship.Only Mahayana, however, speaks of building up the two enlightenment-building networks – the two collections – for three zillion eons. â€Å" Zillion,† usually translated as â€Å"countless,† means a finite number, though we would be unable to count it. Shravakas, on the other hand, can attain arhatship in as short as three lifetimes. In the first lifetime, one becomes a stream-enterer, in the next lif etime a once-returner, and in the third lifetime, one becomes a non-returner, achieves liberation, and becomes an arhat. This is quite tempting for many people.The assertion that arhats are selfish is like bodhisattva propaganda. It is basically meant to point out an extreme to avoid. The sutras record that Buddha asked his sixty arhat disciples to teach. If they were truly selfish, they would not have agreed to do so. Arhats, however, can only help others to a more limited extent than Buddhas can. Both, however, can only help those with the karma to be helped by them. Bodhisattvas It is important to realize that the Hinayana schools do assert that before becoming a Buddha, one follows the bodhisattva path.Both Hinayana and Mahayana have versions of the Jataka tales describing the previous lives of Buddha Shakyamuni as a bodhisattva. Starting with King Siri Sanghabodhi in the third century CE, many Sri Lankan kings even called themselves bodhisattvas. Of course, this is a little tri cky to untangle because there was some Mahayana present in Sri Lanka at the time. Whether this idea of bodhisattva kings preexisted a Mahayana influence is hard to say, but it did happen. Even more surprisingly, in the fifth century CE, the elders at theSri Lankan capital Anuradhapura declared Buddhaghosa, a great Theravada Abhidharma master, to be an incarnation of the bodhisattva Maitreya. Mahayana asserts that there are a thousand Buddhas in this â€Å"fortunate eon† who will start universal religions, and there have been and will be many more Buddhas in other world ages. Mahayana also asserts that everyone can become a Buddha, because everyone has the Buddha-nature factors that enable this attainment. Hinayana does not discuss Buddha-nature. Nevertheless, Theravada does mention hundreds of Buddhas of the past.One Theravada sutta even lists twenty-seven by name. All of them were bodhisattvas before becoming Buddhas. Theravada asserts that there will be innumerable Buddhas in the future as well, including Maitreya as the next one, and that anyone can become a Buddha if they practice the ten far-reaching attitudes. The Ten Far-Reaching Attitudes Mahayana says that the ten far-reaching attitudes are practiced only by bodhisattvas and not by shravakas. This is because Mahayana defines a far-reaching attitude or â€Å"perfection† as one that is held by the force of a bodhichitta aim.According to Theravada, however, so long as the ten attitudes are held by the force of renunciation, the determination to be free, bodhichitta is not necessary for their practice to be far-reaching and act as a cause for liberation. Thus, Theravada asserts that both bodhisattvas and shravakas practice ten far-reaching attitudes. Aside from the different motivating aims behind them, the other main difference between a bodhisattva’s and a shravaka’s practice of the ten is the degree of their intensity.Thus, each of the ten far-reaching attitudes has three st ages or degrees: ordinary, medium, and highest. For example, the highest practice of generosity would be giving one’s body to feed a hungry tigress, as Buddha did in a previous life as a bodhisattva. The list of the ten far-reaching attitudes also differs slightly in Theravada and Mahayana. The Mahayana list is: * generosity * ethical self-discipline * patience * joyful perseverance * mental stability * discriminating awareness * skill in means

Summer: David Updike

It is the simple childhood activities like e games of inns or baseball that gives him the feeling of youth. To parallel Homers feel Eng, Update describes the summer nights filled with an endless amount of stars making the e sky seem infinite with â€Å"no bounds† ( pig 359, Summer). As children, the sense of bounds ray is constantly being learned and discovered. This small view into Homers pastimes allows t he reader to catch a glimpse of Homer's childlike side. As the story continues, Homer takes an interest in Sandra, the girl next door.He no longer plays games to pass the time, instead he spends his days thinking ABA t her. Soon he notices notices every detail about her, her inability to get a tan despite being outdoors, or the way she walks. However, as young man, to approach Sandra and tell her how he really feels takes large amounts of courage. When Homer is around her, he is always very cautious not letting on too much about how he feels. For the time being, Homer is li ving in absolute bliss. With a â€Å"merciless succession of beautiful days† (pig 301, Summer), it seems like e nothing can wrong.Time slows down and everything is perfect, especially with Sandra. Unfortunately all good things come to an end. As summer comes to an end, H emmer realizes that he will have to say goodbye to Sandra without her knowing his try u feelings for her. Time isn't the only thing running out for Homer, the glorious summer day s have also begun to fade â€Å"leaving the sky a hard and unbroken blue† (pig 361 Summer). Despite the feelings of sadness, all it takes is one small touch from Sandra to assure him t hat â€Å"his love [had] been returned† (pig 363, Summer).The simplicity of the action was neon ugh to make him tauter and realize that even though he might not have expressed himself full y, the message he was trying to convey was still understood and returned. Childhood to adulthood is a transition that all individuals experience. Updat e Illustrates this change through the example of first love. Homer's hesitance to express hi s feelings to Sandra is just one type of growth that helps shape an individual to be who the y are as an adult. Update then uses setting, symbolism, and events to parallel Homers fee lings throughout the month.

Is Ocean Biodiversity Important - 1442 Words

As you may know, one of the best ways for me to study a particular subject is by trying to explain it to someone else. What I am about to tell you this time, however, is not going to be a review for an exam but it is something that I am deeply passionate about: ocean biodiversity. In the most basic sense, biodiversity is the variety of life in the world or in a particular habitat. Why is ocean biodiversity important and how does it play a role in our lives? Boris Worm, a marine research ecologist and associate professor at Dalhousie University in Canada, and his associates explains that, â€Å"local species richness enhance ecosystem productivity and stability†¦ marine ecosystems provide a wide variety goods and services, including vital food resources for millions of people, flood control and waste detoxification† (Worm). In their research study, they discovered that higher diversity of marine plants results in greater ecosystem stability and eighty percent more biomass. On the other hand, fisheries with limited diversity saw significant loss in water quality and catch yield. World Ocean Review believes that ocean biodiversity, makes habitats more resilient to environmental change†¦ and it plays a vital role in the production of plant biomass (primary producers) which is the basic food source for all life in the ocean† (Worm). You know from science class that primary producers form the base and the most important part of the food web. This is why ocean biodiversity is essentialShow MoreRelatedThe Circumstances Of Marine Biodiversity1012 Words   |  5 PagesDanshan Yin Environmental Studies 100 12/02/14 The Circumstances of Marine Biodiversity in China As biodiversity indicates the complex relationship between numerous species and the environment, and embodies the diversity of biotic resources, the issues of declining biodiversity have drawn people’s attention in recent decades. 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