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Capital Structure: Theory and Taxes

Capital Structure: Theory and Taxes: PureMeds is a highly profitable pharmaceutical company that places great importance on funding research and development projects. According to finance research, the expected capital structure for PureMeds:

a.would show a high market-value leverage level

b.would show a high book-value leverage level

c.would contain a high long-term debt level

d.would contain a high total debt level

e.would show a low financial leverage level

ANS:                        PTS:   1                    REF:   12.1              

OBJ:   TYPE: application of concepts

     2.   If the bankruptcy laws of a country change such that debtors are afforded increased protection, then over the long-term, market-value of financial leverage:

a.

should tend to increase

b.

should tend to decrease

c.

will remain unchanged

d.

will only be affected in countries with heavy reliance on capital markets versus banks for corporate financing

e.

will only be affected in developing countries

ANS:                        PTS:   1                    REF:   12.1               OBJ:   TYPE: fact retention

     3.   Given an increase in personal tax rates on both dividends and interest income, companies should:

a.

decrease retained earnings and increase leverage levels over time

b.

increase retained earnings and decrease leverage levels over time

c.

decrease retained earnings and decrease debt financing over time

d.

increase dividend payments to investors and increase leverage levels over time

e.

cannot say without knowing the values of the tax rates

ANS:                        PTS:   1                    REF:   12.1              

OBJ:   TYPE: application of concepts

     4.   Devard, CFO of Buymore, Inc., must create a financing plan for a proposed acquisition offer. Buymore’s existing shareholders would likely consider the purchase to be “good news” if:

a.

Buymore issued new shares to finance the acquisition

b.

current Buymore shares were accepted as payment for the acquisition

c.

Buymore employed a debt-financed cash tender for the acquisition

d.

Buymore offered to exchange debt holdings for equity holdings in the new corporation

e.

the entire remaining balance of cash reserves were used for the acquisition

ANS:                        PTS:   1                    REF:   12.1              

OBJ:   TYPE: application of concepts

     5.   In a frictionless capital market, if the market value of a levered firm’s outstanding securities differs from the market value of an otherwise identical all-equity firm’s outstanding securities, M & M demonstrate that:

a.

investors are willing to pay a premium price for shares of levered firms

b.

investors will require “too high” an expected return on levered equity

c.

investors are maximizing personal profits

d.

the market value of levered equity is given by capitalizing operating income at a rate equal to the firm’s WACC

e.

an arbitrage opportunity exists

ANS:                        PTS:   1                    REF:   12.3               OBJ:   TYPE: fact retention

     6.   Two firms, Top-Dog and Under-Dog, generate $20000 in net operating income each year. Top-Dog has a capital structure consisting of 100% equity, whereas Under-Dog uses 50% debt and 50% equity. Under-Dog must pay $10000 in interest on its debt each year. If the tax on corporate profits is 30%, what is the value of the tax shield for Under-Dog each period, employing the M&M “modified” model?

a.

$9850

b.

$2300

c.

$3000

d.

$1700

e.

cannot be computed with the information provided

ANS: 

PTS:   1                    REF:   12.4               OBJ:   TYPE: application of concepts

     7.   Consider the following hypothetical situation: In a given year, the corporate tax rate is 35% and personal tax rates on interest income and income from stock are 40% and 20%, respectively (assume the same tax rate applies to dividends and capital gains). If BestCo uses 100% equity to finance its operations, no dividends are paid and all profits are plowed back as retained earnings. Alternatively, BestCo can finance its operations with some proportion of debt. Suppose BestCo earns a net operating profit of $300000. Which of the following statements is true?

a.

Shareholders are worse off if the company finances part of its operations with debt.

b.

The introduction of a 35% tax on corporate profits causes an immediate increase in the market value of BestCo if it is all-equity financed.

c.

The tax code offers an incentive to increase firm value by increasing equity issues.

d.

The tax code offers firms an incentive to use leverage.

e.

The tax code offers individuals an opportunity to capitalize on dividend income.

ANS: 

PTS:   1                    REF:   12.4               OBJ:   TYPE: application of concepts

     8.   Firms in the __________ industry(ies) use a great deal of debt.

a.

computer software

b.

computer software and pharmaceutical

c.

aerospace

d.

aerospace and retailing

e.

utility and auto manufacturing

ANS:                        PTS:   1                    REF:   12.1               OBJ:   TYPE: fact retention

     9.   __________ firms use almost no debt in their capital structure.

a.

Aerospace

b.

High-tech

c.

Aerospace and pharmaceutical

d.

Aerospace and retailing

e.

Utility

ANS:                        PTS:   1                    REF:   12.1               OBJ:   TYPE: fact retention

   10.   If a firm has $6.5 million in debt, $27.8 million in equity, a tax rate of 35%, and pays 7% interest on debt, what is the firm’s PV of the interest tax shields?

a.

$202200

b.

$327200

c.

$8.5 million

d.

$2.275 million

e.

$418910

ANS: 

PTS:   1                    REF:   12.4               OBJ:   TYPE: application of concepts

   11.   What do you need to know to calculate the gains from using leverage for individual companies?

a.

tax rate on corporate profits

b.

market value of a firm’s outstanding debt

c.

personal tax rate on income from debt

d.

personal tax rate on income from stock

e.

all of the above

ANS:                        PTS:   1                    REF:   12.4              

OBJ:   TYPE: application of concepts

   12.   In attempting to develop a model, M & M showed that capital structure could not affect the firm value in a world with __________.

a.

perfect markets

b.

target leverage zones

c.

homemade leverage

d.

arbitrage

e.

none of the above

ANS:                        PTS:   1                    REF:   12.3               OBJ:   TYPE: fact retention

   13.   When M & M assume that capital markets are frictionless it means __________.

a.

no taxes

b.

no transaction costs

c.

investors can borrow and lend at the same rate that corporations can

d.

all of the above

e.

none of the above

ANS:                        PTS:   1                    REF:   12.3               OBJ:   TYPE: fact retention

   14.   M & M Proposition II says that the WACC is not influenced by changing the mix of debt and equity because changes in leverage cause an offsetting change in the __________.

a.

WACC

b.

required return on equity

c.

target leverage zones

d.

secured debt hypothesis

e.

none of the above

ANS:                        PTS:   1                    REF:   12.3               OBJ:   TYPE: fact retention

   15.   The logic of the Modigliani and Miller’s proposition 1 crucially depends on investors having __________.

a.

risk neutral preferences.

b.

mean-variance preferences.

c.

Neither of these preference types are essential.

ANS:                        PTS:   1                    REF:   12.3               OBJ:   TYPE: critical thinking

   16.   Using M&M propositions with corporate taxes and the following information, what is the value of the levered firm?  NOI = $80000; Corporate Taxes = 40%; the firm borrows $750000 at a rate of 8%.

a.

$900000

c.

$618461

b.

$856211

d.

$839518

ANS: 

PTS:   1                    REF:   12.3               OBJ:   TYPE: application of concepts

   17.   The relationship of corporate income taxes, personal income taxes on equity investments, and personal income taxes on interest income should have a predictable change in debt ratios; which of the following predicts increasing debt ratios?

a.

Higher corporate income taxes, higher personal taxes on equity investments, lower personal taxes on interest income

b.

Lower corporate income taxes, higher personal taxes on equity investments, lower personal taxes on interest income

c.

Higher corporate income taxes, lower personal taxes on equity investments, lower personal taxes on interest income

d.

Higher corporate income taxes, higher personal taxes on equity investments, higher personal taxes on interest income

ANS:                        PTS:   1                    REF:   12.3               OBJ:   TYPE: fact retention

   18.   Financial leverage

a.

Increases expect EPS and Increases EPS volatility

b.

Increases expect EPS and Decreases EPS volatility

c.

Decreases expect EPS and Increases EPS volatility

d.

Decreases expect EPS and Decreases EPS volatility

ANS:                        PTS:   1                    REF:   12.1               OBJ:   TYPE: fact retention

   19.   According to M&M’s Proposition II the expected return on a levered firm’s equity

a.

Falls to the debt-to-equity ratio

b.

The levered firm’s equity expect return does not change with the debt-to-equity level

Rises with the debt-to-equity ratio

c.

Rises with the debt-to-equity ratio

d.

Proposition II does not address the leveraged firm’s expected return on equity

ANS:                        PTS:   1                    REF:   12.2               OBJ:   TYPE: fact retention

   20.   Using M&M propositions with corporate taxes and the following information, what is the value of the levered firm?  NOI = $70000; Corporate Taxes = 40%; the firm borrows $450000 at a rate of 8%.

a.

$705000

b.

$510000

c.

$520000

d.

$320000

ANS: 

PTS:   1                    REF:   12.3               OBJ:   TYPE: application of concepts

MATCHING

Match the following relationships:

a.

M&M theory

b.

managerial opportunism theory

c.

trade-off theory

     1.   capital structure is the result of market timing

     2.   firms balance costs and benefits of debt

     3.   firm value does not depend on capital structure

     1.   ANS:                        PTS:   1                    REF:   12.2 – 12.3    

OBJ:   TYPE: fact retention | TYPE: application of concepts    

NOT:  Managerial opportunism and trade-off theory are introduced in chapter 13

     2.   ANS:                        PTS:   1                    REF:   12.2 – 12.3    

OBJ:   TYPE: fact retention | TYPE: application of concepts

     3.   ANS:                        PTS:   1                    REF:   12.2 – 12.3    

OBJ:   TYPE: fact retention | TYPE: application of concepts

Match the following statements:

a.

increases the tax gain from leverage

b.

decreases the tax gain from leverage

c.

Proposition I

d.

Proposition II

e.

Pecking order model

f.

Homemade leverage

     4.   a reduction in the corporate tax rate

     5.   higher debt increases the cost of equity

     6.   a reduction in personal taxes on interest income

     7.   explains why firms want financial slack

     8.   says capital structure cannot affect firm value

     9.   investors can unwind firms’ capital structures

     4.   ANS:                        PTS:   1                    REF:   12.2 – 12.3     OBJ:   TYPE: fact retention

NOT:  Pecking order is introduced in chapter 13

     5.   ANS:                        PTS:   1                    REF:   12.2 – 12.3     OBJ:   TYPE: fact retention

     6.   ANS:                        PTS:   1                    REF:   12.2 – 12.3     OBJ:   TYPE: fact retention

     7.   ANS:                        PTS:   1                    REF:   12.2 – 12.3     OBJ:   TYPE: fact retention

     8.   ANS:                        PTS:   1                    REF:   12.2 – 12.3     OBJ:   TYPE: fact retention

     9.   ANS:                        PTS:   1                    REF:   12.2 – 12.3     OBJ:   TYPE: fact retention

SHORT ANSWER

     1.   In the late 1990s Ford Motor company held a large cash balance that was often called a war chest. In terms of the pecking order hypothesis, discuss why Ford might have been willing to maintain large cash balances over this period of time. At the end of this period, Ford decided that it no longer had a need for these excess funds for investment opportunities and it made a large payout to existing shareholders. How does this corporate behavior fit with the pecking order hypothesis?

     2.   Consider two firms in the same industry that operate in frictionless markets. Both firms, DebtHungry and Ner-aBorrower, have identical net operating income of $240000 per year. The riskiness of each company’s assets suggests a fair weighted average cost of capital of 10 percent.

a.

What is the value of each company?

b.

If DebtHungry has borrowed $600000 at a required rate of return of 4 percent, what is the fair required rate of return on the firm’s equity?

c.

Given that the expected rate of return on an investment at the corporate level in Ner-aBorrower is 10 percent, explain how you create an investment identical to an equity investment in Ner-aBorrower with only an investment in DebtHungry’s equity and riskless debt (that earns 4 percent).

d.

Suppose the actual market value of Ner-aBorrower is $3.0 million. Explain how you can exploit this mispricing via arbitrage.

ANS: 

     3.   Couglin Inc. has net operating income of $120000 per year. Couglin uses no debt in its capital structure and the required rate of return to equity holders is 12 percent.

a.

Calculate the value of the unlevered firm if the firm has a marginal tax rate of 0%.

b.

Calculate the value of the unlevered firm if the firm has a marginal tax rate of 30%.

c.

Interpret the difference in your findings to parts a. and b.

d.

If your answer to part a. is less than your answer to part b, can we increase firm value by taking on debt? If so, will these benefits always continue as we add more and more debt?

     4.   Kylie Surfboards Ltd. runs a successful enterprise on the Northeastern coast of Australia. Kylie Surfboards has a tax rate of 40 percent and a before tax cost of debt of 7 percent on $4000000 of debt.

a.

What is Kylie Surfboard’s PV of interest tax shields?

b.

Would your answer change if you expected the company to be unwound in ten years when Kylie retires?

ANS: 

     5.   Your firm, FloThru, has a net operating profit of $700000, or $455000 after corporate taxes. FloThru’s tax rate is 35 percent and the personal tax rates on interest and income from stock are 40 percent and 20 percent, respectively.

a.

If FloThru paid the entire $455000 in after-tax income as a dividend, what is the after-tax cash flow to the shareholders?

b.

If operations were financed entirely with debt (so that all of the net operating income escaped corporate taxes), how much cash flow would bondholders receive after paying the required personal tax?

c.

Considering only taxation issues, should the firm finance its operations mostly through debt or mostly through equity given the information above?

d.

Suppose that in part a. above the $455000 in after corporate tax income was retained by the firm. How would that affect your answer to part c.?

ANS: 

     6.   The equation , shows the gains from leverage. Discuss how the traditional M&M findings can be obtained as special cases by using different tax rate assumptions.

     7.   Consider a firm with $5000000 in total debt, a corporate tax rate of 30 percent, and a personal tax rate on interest income of 40 percent. According to the gains from leverage equation , at what personal tax rate on income from stock should the firm be indifferent to using more or less borrowing? If the firm’s total borrowings were twice as large, how does you answer change?

ANS: 

     8.   Within industries, what is the relationship between profitability and leverage? How does this line up with the trade-off model?

     9.   Why do firms with high-value intangible assets use less debt than firms that invest in more tangible assets?

   10.   What is the best single predictor of new equity issues?

ANS: 

The best single predictor of new equity issues is the recent trend in the stock price. Companies tend to issue common shares following unusually large increases in the stock price and essentially refuse to issue new equity after share prices have fallen.

PTS:   1                    REF:   12.2               OBJ:   TYPE: critical thinking

   11.   What are the assumptions of the pecking order hypothesis?

   12.   In the M & M world without corporate and personal taxes, will replacing a security that has a high required rate of return (equity) with one that requires a lower return (debt) lower the average cost of capital?

   13.   What do you conclude as an investor if a firm sells stock and uses the proceeds to repurchase some of its outstanding bonds?

ANS: 

PTS:   1                    REF:   12.1               OBJ:   TYPE: critical thinking

   14.   What is the relationship between the value of a firm and its capital structure in the M & M world without taxes?

ANS: 

   15.   What is the relationship between the value of the firm and its capital structure in the M & M world with corporate taxes?

ANS: 

   16.   What is the relationship between the value of the firm and its capital structure in the M & M world with corporate and personal taxes?

ANS: 

   17.   What is the asymmetric information assumption?

ANS: 

   18.   If the D corporation has a market valuation of equity equal to $103800, a 15% required rate of return on equity, and 3000 shares of stock, what is the market value of a share of common stock?

ANS: 

   19.   Upon introduction of corporate and personal income taxes, why are interest rates not bid up immediately to compensate investors for taxes due?

ANS: 

   20.   Do companies with large amounts of depreciation, investment tax credits, R & D expenditures, and other nondebt tax shields employ less debt financing?

ANS: 

   21.   If a firm operates in a perfect capital market, has a required return on its outstanding debt of 8%, a required return on its common stock of 14%, and a WACC of 12%, what is the firm’s debt-to-equity ratio?

ANS: 

   22.   An unlevered corporation has net income of $60000 and a required rate of return of 14%. What would the value of this firm be if it borrowed $140000 to buy back some of its stock? Assume a corporate tax rate of 40%.

ANS: 

   23.   If a company with no debt decides to change its capital structure and add $20000 in debt to repurchase $20000 in common stock, how much would the value of the company change if it has a 40% corporate tax rate?

ANS: 

   24.   Assume that capital markets are perfect. If a firm finances its operations with $40000 in common stock with a required return of 17% and $16000 in bonds with a required return of 7%, what would happen to the required rate of return on the common stock if the firm issues $15000 in additional bonds at 7% to retire $15000 worth of equity?

ANS: 

   25.   The personal tax rate on debt is 21% and the personal tax on equity is 10%. The corporate tax rate is 15%. There is a firm, initially with no debt and market value $3 billion. This firm decides to issue $200 million of perpetual risk-free debt paying the riskfree interest rate of 3%. The proceeds from the sale of debt are used to buy back shares at a price appropriately reflecting the gains from leverage. What is the new value of the remaining equity in the firm?

ANS: 

   26.   There are two firms, Beautiful Widgets (BW) and Glamorous Thingamajigs (GT). Each has expected Net Operating Income (NOI) of $5 million each year forever, and the NOI to BW will always be exactly the same as that to GT, whether it ends up above or below the expected amount. After any interest payments, all income is paid out to equity holders. BW is all equity (stock). GT has some equity, along with $20 million (market value and face value) in perpetual debt. GT’s debt pays riskfree 6% interest each year, while BW has expected return on its equity of . There are no taxes, and the rest of the Modigliani-Miller assumptions hold.

a.

What is the value of BW equity?

b.

What is the value of GT equity?

c.

What is the expected cash flow to GT equity holders each year?

d.

What is the expected return on GT stock

ANS: 

   27.   There are two firms, Hello and olleH. Each has expected Net Operating Income (NOI) of $18 million each year forever, and the cash flow to Hello will always be exactly the same as that to olleH, whether it ends up above or below the expected amount. Hello is all equity (stock). olleH has some equity, along with $100 million in debt (market value and face value). olleH’s debt pays 5% interest at the end of each year, and olleH has expected return on its equity of 6.5%. There are no taxes, and the rest of the Modigliani-Miller assumptions hold.

a.

What is the expected cash flow to olleH equity holders each year?

b.

What is the value of olleH equity?

c.

What is the value of Hello equity?

d.

What is the expected return on Hello stock?

e.

Your friend, whom you admire greatly, has $6000 of olleH stock. You would like to put your spare cash of $6000 toward an investment with exactly the same risk and expected return. However, you don’t wish to be a copycat, so you will buy some Hello stock financed partly with your cash and partly with borrowing. How much borrowing do you do and how much Hello stock do you buy?

ANS: 

     1.   Clearly state proposition I of Modigliani and Miller. Intuitively, how can one rationalize the apparent patterns in financial leverage choices and this proposition?

ANS: 

     2.   Identify and explain the three key empirical patterns of the pecking order hypothesis.

ANS: 

     3.   How is arbitrage used to prove that the use of leverage has no impact on the firm’s

total market value?

ANS: 

     4.   Explain Miller’s claim that capital structure shouldn’t matter, even in the presence of corporate and personal taxes.

ANS: 

 

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Assume the production of a particular good is characterized by significant economies of scale

“Assume significant economies of scale characterize the production of a particular good. In addition, three different versions of the good can be produced, and large segments of the population prefer different versions. In this case, the preferred market structure for this good would be:

Choose one answer.

a. perfect competition.

b. monopolistic competition.

c. monopoly.

d. oligopoly.

The kinked demand curve model best reflects. Choose one answer.

a. mutual interdependence among sellers.

b. price rigidities in oligopolistic markets.

c. a game theory approach to price-output decisions.

d. All of the above

Assume at the firm’s profit-maximizing level of output P = AVC. In this case, the firm will be:Choose one answer.

a. earning a positive economic profit.

b. earning economic profit = 0.

c. breaking even.

d. incurring an economic loss.

A successful and stable cartel can be established if there are.Choose one answer.

a. a few firms producing a storable product.

b. many firms producing a perishable product.

c. many firms producing a storable product.

d. a few firms producing a perishable product.

A perfectly competitive firm will maximize profits (or minimize losses) so long as price (marginal revenue) is: Choose one answer.

a. greater than marginal cost.

b. greater than average total cost.

c. greater than average fixed cost.

d. greater than average variable cost.

In the Baumol model, the total quantity sold will usually be larger than. Choose one answer.

a. if companies were interdependent.

b. if perfect competition prevailed.

c. if total costs were minimized.

d. if profit were maximized.

An industry characterized by a small number of dominant firms that face downward-sloping demand curves is best described as:Choose one answer.

a. monopolistically competitive.

b. an oligopoly.

c. a monopoly.

d. perfectly competitive.

Which of the following distinctions helps to explain the difference between relevant and irrelevant cost?Choose one answer.

a. historical cost vs. replacement cost

b. sunk cost vs. fixed cost

c. variable cost vs. incremental cost

d. accounting cost vs. direct cost

Simulation analysis choose one answer.

a. does not permit the calculation of expected value and standard deviation.

b. permits the calculation of expected value and standard deviation.

c. does not consider probabilities.

d. is too complex to ever be used in actual business situations.

Which of the following is the best example of a monopolistically competitive market?Choose one answer.

a. The wheat market.

b. The restaurant market.

c. The electricity market.

d. The market for automobiles.

A perfectly competitive firm has the cost function: TC = 1000 + 2Q + 0.1 Q2What is the lowest price at which this firm can break even?Other things being equal, the higher the cost of capitalChoose one answer.

a. the lower the NPV of the project.

b. the higher the IRR of the project.

c. the higher the NPV of a project.

d. The cost of capital has no effect on the NPV of the project.

A real option can present management with the opportunity to. Choose one answer.

a. postpone a project.

b. abandon a project.

c. vary output.

d. All of the above.

An industry characterized by a small number of dominant firms that face downward-sloping demand curves is best described as: Choose one answer.

a. an oligopoly.

b. monopolistically competitive.

c. perfectly competitive.

d. a monopoly.

Assume the firms in a monopolistically competitive industry initially are earning positive economic profits. Which of the following will not occur over time?Choose one answer.

a. The number of substitutes available in the industry will increase.

b. New firms will enter.

c. Demand for the existing firms’ output will become more inelastic.

d. The firms’ economic profits will be reduced.The following are possible examples of price discrimination except choose one answer.

a. prices in export markets are lower than for identical products in the domestic market.

b. subscription prices for a professional journal are higher when bought by a library than when bought by an individual.

c. a product sells at a higher price at location A than at location B, because transportationcosts are higher from the factory to A.

d. senior citizens pay lower fares on public transportation than younger people at the same time.

Assume that as the firms in a perfectly competitive industry expand output, the prices of productive inputs increase. All else constant, this would cause the individual firms’ marginal cost curves to ________ and the market supply curve to become ________.Choose one answer.

a. shift up; steeper

b. shift up; flatter

c. shift down; steeper

d. shift down; flatter

In order that price discrimination can existChoose one answer.

a. different demand price elasticities must exist in different markets.

b. markets must be interdependent.

c. markets must be capable of being separated.

d. demand price elasticities must be identical in all markets.

e. Both A and C

Suppose the firms in a monopolistically competitive market are incurring economic losses. What will happen to move the market to its long-run equilibrium?Choose one answer.

a. Firms will continue to exit the market until economic losses are equal to zero.

b. The demand functions of all the firms remaining in the market will become relatively more elastic.

c. More close substitutes will appear in the market until economic profits are zero.

d. The firms that dropped out of the market will reenter once the level of economic losses is zero.

A proposed project should be accepted if the net present value isChoose one answer.

a. larger than the internal rate of return.

b. negative.

c. smaller than the internal rate of return.

d. positive.

 

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The immediate cause for the Texan Americans’ declaration of independence on March 2, 1836

The immediate cause for the Texan Americans’ declaration of independence on March 2, 1836 was that… the Texan "war party" sabotaged the efforts of Stephen F. Austin and other "peace party" leaders who were then negotiating with the Mexican government for greater autonomy. the new president, General Antonio Lopez de Santa Ana, cut short Stephen F. Austin’s negotiations with the Mexican government and appointed a military commandant for Texas. Mexican troops commanded by General Antonio Lopez de Santa Ana destroyed the American garrison defending the Alamo. Texans prisoners at Goliad were massacred by Mexican troops commanded by General Antonio Lopez de Santa Ana. ________________________________________

Question 2  Which of the following does not help to explain the diminishing effectiveness of Reconstruction in the South? Northerners tired of the expense and violence that supporting Reconstruction engendered. Racism among moderate Republicans led them to ascribe Republican defeats in the South to the incompetence of black politicians. A severe depression in 1873 distracted Northerners from the social and racial issues of Reconstruction. The expanded presence of federal troops and officials from 1875 to 1877 brought about an escalation in southern terrorist retaliation. _______________________________________Question 3 (Multiple Choice Worth 2 points) Which of the following statements most accurately characterizes one effect of Enlightenment on America. American thinkers agreed with John Locke’s idea that political authority was divinely ordained. Cotton Mather and the Boston physician Nicholas Boyleston fought against smallpox inoculation. Some ministers combined Lockean political principles with Calvinist theology in order to attack the role of bishops and vest power in the laity. European Enlightenment ideas had little impact on Americans until 1750. _______________________________________

Question 4 (Multiple Choice Worth 2 points) In the election of 1864, Lincoln… won by a slim margin, thanks to the votes of Union soldiers. was swept to victory by Sherman’s victory at Atlanta. won despite the fact that three out of every four Union soldiers voted against him. lost the popular vote to McClellan, but won the electoral vote. ________________________________________

Question 5 (Multiple Choice Worth 2 points) The Compromise of 1850 did not include which of the following? Abolition of the slave trade in the District of Columbia. Adoption of a strong fugitive slave law. The organization of the New Mexico and Utah territories on the basis of popular sovereignty. Abolition of slavery in the Oregon Territory. ________________________________________

Question 6 (Multiple Choice Worth 2 points) The Puritans in late sixteenth-century England… denied the concept that everyone had a callingâ from God. incorporated into their religion many of the traditional Roman Catholic practices, such as burning incense and praying to dead saints. championed literacy so that everyone could read and interpret the Bible. gave final authority over religious doctrine to bishops and synods. ________________________________________

Question 7 (Multiple Choice Worth 2 points) In early nineteenth-century America… the rise in political status of ordinary white men was accompanied by a decline in the political rights of women and free blacks. most newly organized free states granted the right to vote to adult black men who owned specified amounts of freehold property. Pennsylvania and New York allowed all free adult black males to vote. women were granted the right to vote only in New Jersey in 1807. ________________________________________

Question 8 (Multiple Choice Worth 2 points) The First Continental Congress… was summoned by Patriot leaders to protest the Coercive Acts in 1774. united representatives from all the British colonies of North America for the first time. failed to enact a declaration of independence drafted by John Adams but accepted Joseph Galloway’s more moderate Plan of Union. failed to pass a declaration of rights and grievances because it was judged too mild. ________________________________________

Question 9 (Multiple Choice Worth 2 points) Between 1800 and 1860 white planters moved to the lower South to… transform the West into a free labor society. recreate the conditions of slavery. invest in agricultural development. flee antislavery laws in the upper South. ________________________________________

Question 10 (Multiple Choice Worth 2 points) Which of the following statements most accurately characterizes immigration during the 1840s and 1850s? Most immigrants settled in the South to take advantage of jobs in industry and agriculture. Most of the Irish who arrived were poverty-stricken peasants. The largest group of immigrants came from eastern and southern Europe. The poorest immigrants came from Wales and Scotland. ________________________________________

Question 11 (Multiple Choice Worth 2 points) The Mayflower Compact… was the first âconstitutionâ adopted in North America. was the Pilgrims’ declaration of independence from England. proclaimed the Pilgrims’ new religious denomination, known as the Separatist Church. pledged the settlers of the Plymouth Colony to create a democratic form of government. ________________________________________

Question 12 (Multiple Choice Worth 2 points) In their petitions to Congress in the 1830s, abolitionists frequently called for… appropriating funds to compensate slave owners for emancipating their slaves. abolishing slavery in the District of Columbia. ending the Atlantic slave trade. impeaching any president who condoned slavery and barring slave owners from serving in Congress. ________________________________________

Question 13 (Multiple Choice Worth 2 points) Before becoming president, Thomas Jefferson viewed the westward migration of Americans with… apprehension because he believed the country was growing too large to be governed as a single republic. disapproval because he sympathized with the plight of the Indians who would be displaced by white settlement of the West. disdain because, as a cultured aristocrat, he considered the settlers to be uncouth rabble who would only cause trouble with the Indians and destroy the West’s natural environment. unqualified approval because he celebrated the pioneer farmer and hoped to see the West developed by independent yeomen. ________________________________________

Question 14 (Multiple Choice Worth 2 points) The three-day Battle of Gettysburg resulted in… a decline in northern popular support for the war. Democratic victories in state and local elections in Ohio, New York, and Pennsylvania. Lee’s loss of over half his Army of Northern Virginia. the Confederate elections of 1863 to turn sharply against supporters of Jefferson Davis. ________________________________________

Question 15 (Multiple Choice Worth 2 points) The Whiskey Rebellion was significant for all of the following reasons except… the Whiskey rebels were acting in the tradition of the Patriots of 1765 and the Shaysites of 1786, only now they also waved banners proclaiming the French Revolutionary slogan âLiberty, Equality, Fraternity.â Washington used force to put down the first strong challenge to the federal government’s authority in order to make and enforce a law. by suppressing the revolt, Washington deterred secessionist movements on the frontier. when he learned that Thomas Jefferson covertly supported the insurgents, Washington publicly broke with him, precipitating open party conflict. ________________________________________

Question 16 (Multiple Choice Worth 2 points) On the eve of European colonization of the Americas, most Western Europeans lived in… small, relatively isolated, rural communities. booming new cities and towns. the older cathedral cities. the castles that dotted the countryside. ________________________________________

Question 17 (Multiple Choice Worth 2 points) The plantation elite were characterized by all of the following criteria except… roughly three thousand families comprised of the plantation elite category. plantation elites owned more than 1,000 slaves. plantation elites owned huge tracts of fertile land. plantation elites were both traditional aristocrats from the Old South and market entrepreneurs of the New South. ________________________________________

Question 18 (Multiple Choice Worth 2 points) Which of the following statements most accurately characterizes the American party system by the early 1840s? As the 1840 election demonstrated, the Whigs held the edge in party discipline and mass loyalty. The two parties offered virtually the same social and economic platform but employed differing campaign styles to attract voters. the practice of Americans voting for a particular party along ethnic and religious lines began to emerge. The Democrats had a major advantage in their wealth and the cohesiveness of their leadership and support. ________________________________________

Question 19 (Multiple Choice Worth 2 points) The Glorious Revolution in England and America… had little impact on either England or North America apart from deposing the Stuarts and barring Roman Catholics from the English throne. contributed significantly to the creation of a new empire based on commerce, with a curb on royal monopolies, encouragement of enterprising merchants, and development of the American colonies as a source of wealth. created democratic governments in Massachusetts, New York, and Maryland, but not in England. represented a major step toward democracy in both England and the North American colonies. ________________________________________

Question 20 (Multiple Choice Worth 2 points) One social change resulting from the Industrial Revolution in early nineteenth century America was that members of the upper class… came to hold the same cultural and religious values as wage earners in contrast to the elitism that in the eighteenth century had kept the gentry and the "common people" apart. openly distanced themselves by values and lifestyle from wage earners in contrast to the shared cultural and religious values that had united the gentry and ordinary folk in the eighteenth century. became more hypocritical, pretending to share cultural and religious values with wage earners, but actually behaving very differently. tended to claim that they had risen "from rags to riches" and to flaunt their crude taste and rough manners in contrast to "gentlemanly" values of the eighteenth-century elites. ________________________________________

Question 21 (Multiple Choice Worth 2 points) The ancestors of the Native American peoples… always lived in the Western Hemisphere. migrated by sea from Polynesia. migrated by sea from China. migrated by land from northeastern Asia. ________________________________________

Question 22 (Multiple Choice Worth 2 points) Which of the following statements most accurately characterizes the British colonial frontier before 1750? Hundreds of British colonists moved into the area west of the Appalachians. The Iroquois covenant chain broke down, and the confederacy’s power diminished. A lack of natural transportation routes kept the British east of the Appalachians. The French abandoned their fur-trading forts in the Ohio region. ________________________________________

Question 23 (Multiple Choice Worth 2 points) The Northwest Ordinance of 1787… prohibited slavery in the Northwest Territory. funded an exploratory party to locate the Northwest Passage. provided for the eventual creation of eight to ten new states in the Northwest Territory. required compulsory elementary education in each new township in the Northwest Territory. ________________________________________

Question 24 (Multiple Choice Worth 2 points) The Stamp Act Congress held in New York in 1765… was a failure because the nine colonies represented could not agree on a unified policy. protested loss of American rights and liberties and declared that only elected representatives could impose taxes on colonists. formulated a set of resolves that threatened rebellion against Britain. accepted the constitutionality of the Sugar Act but not the Stamp Act. ________________________________________

Question 25 (Multiple Choice Worth 2 points) At the same time that Parliament imposed the Stamp Act, it also passed the Quartering Act, which required… Americans to vacate their houses or take in British troops on the demand of any commander. colonial governments to provide barracks and food for British troops. that Americans convicted of treason be hanged and âquarteredâ; that is, cut into four pieces by the hangman. that collectors of the stamp tax receive a commission of one-quarter of the revenue they took in. ________________________________________

Question 26 (Multiple Choice Worth 2 points) The Treaty of Guadalupe Hidalgo… was rejected by the US Senate. prohibited slavery in all territories ceded by Mexico, including Texas. ceded Alta, California; New Mexico; and Texas north of the Nueces River to the United States, in addition to requiring Mexico to pay reparations of more than $50 million. purchased more than one-third of Mexico’s territory for $15 million. ________________________________________

Question 27 (Multiple Choice Worth 2 points) Most colonists’ reaction to the Navigation Acts was to… comply with its laws out of fear of reprisals. welcome these measures as a way of strengthening the bonds of empire, which would protect them from the French and Spanish. bribe customs officials to ignore the regulations. resent and resist the trade restrictions. ________________________________________

Question 28 (Multiple Choice Worth 2 points) The Fifteenth Amendment… prohibited state governments from using property requirements to disqualify blacks from voting. gave the full vote to all adult African Americans. prohibited state governments from using literacy tests and poll taxes to prevent blacks from voting. forbade states from denying any citizen the right to vote on the grounds of race, color, or previous condition as a slave. ________________________________________

Question 29 (Multiple Choice Worth 2 points) The movement toward secession in the winter of 1860-1861 was most rapid in… the Upper South. South Carolina. Virginia. Georgia. ________________________________________

Question 30 (Multiple Choice Worth 2 points) Benjamin Franklin… received an unusually thorough education in England, which put him in touch with Enlightenment ideas unknown to most Americans. was a fervent advocate of the Enlightenment but claimed to be equally influenced by the Bible. was the son of a devout Philadelphia Quaker. founded a club of mutual improvement in Philadelphia to discuss moral and political questions. ________________________________________

Question 31 (Multiple Choice Worth 2 points) All of the following are rights guaranteed by the first ten amendments to the Constitution except… the right to a jury trial. the right to vote. the right to bear arms. freedom of speech. ________________________________________

Question 32 (Multiple Choice Worth 2 points) A peace treaty was not signed until nearly two years after the surrender at Yorktown because… the American negotiators sought delays so that state governments could coordinate their demands. France and Spain stalled, hoping for some major naval victory or territorial conquest. members of Parliament could not reach agreement on the concessions that they were willing to make. the usual delays in transatlantic communications prolonged the process. ________________________________________

Question 33 (Multiple Choice Worth 2 points) The Spanish Franciscan missionaries… tried to impose cultural assimilation and forced labor along with religious conversion of indigenous peoples. became large landowners who collected tribute from the Indians. outlawed slavery in the Spanish colonies. adapted to native culture almost completely. ________________________________________

Question 34 (Multiple Choice Worth 2 points) Which of the following statements most accurately characterizes the relationship between church and state in post-revolutionary America? Most citizens accepted the principle of separation of church and state. The Baptist Church led the campaign for state protection and funding of all Christian denominations. Most religious denominations served their links to the states. By 1787, the Anglican Church of Virginia was the only example of an established church in any state. ________________________________________

Question 35 (Multiple Choice Worth 2 points) Mob violence against abolitionists… was confined to border and southern cities such as Baltimore, St. Louis, New Orleans, and Nashville. was sometimes led by well-to-do "gentlemen of property and standing." targeted only the free black communities and the homes of prominent abolitionist spokespersons. never resulted in the death of an abolitionist spokesperson or free black. ________________________________________

Question 36 (Multiple Choice Worth 2 points) By 1840 the South was on the cutting edge of the Market Revolution because… it produced and exported 1.5 million bales of raw cotton, over two-thirds of the world supply. planters were using European immigrants as industrial workers. planters were building factories to process cotton. southern society was dominated by free labor. ________________________________________

Question 37 (Multiple Choice Worth 2 points) The Missouri Compromise of 1820… resulted from the conciliatory efforts of Congressman James Tallmadge of New York. provided for Maine to enter the Union as a free state in 1820, and Missouri to enter as a slave state the following year. prohibited slavery in the Louisiana Territory south of latitude 36°30´. convinced the aged and retired Thomas Jefferson that the peaceful extinction of slavery by mutual agreement was now in sight. ________________________________________

Question 38 (Multiple Choice Worth 2 points) The abolitionist William Lloyd Garrison… attacked the US Constitution because it condoned slavery. was a minister who came to his antislavery convictions through the evangelical crusades of the 1820s. demanded the immediate abolition of slavery, with federally funded compensation for former slaveholders. criticized the colonizationists for moving too slowly in their efforts to emancipate slaves. ________________________________________

Question 39 (Multiple Choice Worth 2 points) Martin Van Buren’s most significant contribution to American political history in the 1820s was his… pioneering work in making party discipline an effective tool for governing in a democracy. behind-the-scenes efforts to settle the confused election of 1824 by putting John Quincy Adams in the White House and making Henry Clay secretary of state. development of the techniques of mass electioneering that brought about Andrew Jackson’s election in 1828. 1827 book Democracy in America, which showed how democracy could work in American society. ________________________________________

Question 40 (Multiple Choice Worth 2 points) During their first couple of years in the Jamestown colony, the English migrants… doubled the size of their population. produced an agricultural surplus–enough to trade with the Native Americans. lived remarkably disease-free. suffered from famine and diseases that killed more than half the population. ________________________________________

Question 41 (Multiple Choice Worth 2 points) George Washington’s success as a general is most accurately explained by… his political astuteness and ability to act decisively. his strong personality, which enabled him to override the decisions of Congress. a lack of any competitors among the other Patriot officers. his willingness to overlook the actions of discontented soldiers, which endeared him to his troops. ________________________________________

Question 42 (Multiple Choice Worth 2 points) In the aftermath of the nullification crisis, President Jackson responded to southern concerns about the tariff by… insisting that high protective tariffs were in the national interest. attempting unsuccessfully to have Congress repeal the Tariff of 1832. persuading Congress to pass new legislation enacting a compromise tariff to gradually reduce duties. ignoring the issue. ________________________________________

Question 43 (Multiple Choice Worth 2 points) A successful, full-scale revolt was nearly impossible for colonial-era slaves to achieve primarily because… even the Indians would refuse to help them if they escaped. whites were armed and, except in coastal South Carolina, outnumbered slaves. whites enlisted Native Americans to track down rebellious slaves. revolt would endanger the slaves’ communities and families. ________________________________________

Question 44 (Multiple Choice Worth 2 points) A famous Native American who wanted to unite the tribes east of the Mississippi into a confederation during the late 1700s, and was killed in the War of 1812, was: Sitting Bull Tecumseh Geronimo

 

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Potential social, economic, and cultural implications associated with the Baby-Friendly Hospital Initiative

It is well-documented that breast milk is the best choice for newborns and infants, providing protection against many common causes of infant morbidity. Exclusively breastfed newborns and infants have lower rates of otitis media, respiratory infection, gastroenteritis, urinary tract infection, conjunctivitis, and thrush than those who receive only partial or no breastfeeding.1, 2 Breastfeeding has also been found to reduce the risk of type 1 and type 2 diabetes, childhood leukemia, overweight and obesity, and necrotizing enterocolitis.3-5 There is also evidence that breastfeeding is positively and significantly associated with a child’s intelligence (as measured by IQ score) at all ages, even when birth weight and such parental factors as intelligence, educational level, social class, and age are statistically controlled for.6 Although obstacles to long-term follow-up have hindered efforts to document the maternal benefits of breastfeeding, there is evidence that breastfeeding for one year or more reduces the mother’s risks of breast and ovarian cancers, cardiovascular disease, and type 2 diabetes.4 An analysis of data from the National Institute of Child Health and Human Development ABSTRACT: The Baby-Friendly Hospital Initiative (BFHI) is a program developed by the World Health Organization (WHO) and the United Nations Children’s Fund (UNICEF) to promote breastfeeding in hospitals and birthing facilities worldwide. Since the program was launched in 1991, breastfeeding initiation, duration, and exclusivity have increased globally, a trend largely attributed to changes in hospital policies and practices brought about by the BFHI. This article provides an overview of these practices and policies, the institutional benefits of achieving BFHI certification, and the process through which health care facilities can do so. All nurses—whether they work in maternity care or another nursing specialty in a hospital, ambulatory, or community setting—can play a role in promoting societal health through their support of long-term breastfeeding as recommended by the WHO and UNICEF. Keywords: Baby-Friendly certification, Baby-Friendly Hospital Initiative, breastfeeding, breastfeeding policy Nurses can support public health through promotion of long-term breastfeeding. Beyond Maternity Nursing: The BabyFriendly Hospital Initiative AJN ▼ August 2017 ▼ Vol. 117, No. 8 37 Centers for Disease Control and Prevention (CDC), and 2007 dollars to estimate the potential health and financial benefits of breastfeeding. The analysts concluded that if the proportion of U.S. mothers who followed the medical recommendation of exclusively breastfeeding their infants for at least six months after birth were to rise from 12.3% to 90%, it would prevent more than 900 deaths per year and save the United States approximately $13 billion in annual health care expenditures.12 Despite evidence of the pediatric and maternal benefits of breastfeeding, however, many countries, including the United States, have low levels of breastfeeding, with the CDC reporting that only 22.3% of U.S. mothers were exclusively breastfeeding through six months in 2016.13 This article describes the Baby-Friendly Hospital Initiative (BFHI) developed by the World Health Organization (WHO) and the United Nations Children’s Fund (UNICEF) to promote breastfeeding throughout the world. It discusses the hospital policies the BFHI advocates and factors that contribute to breastfeeding success. It explains the BFHI certification process (in which hospitals that complete the process are designated as “Baby-Friendly”), institutional benefits associated with certification, and the practices through By Regina Cardaci, PhD, RN, NP, CNM on more than 1,300 families found an association between breastfeeding and positive changes over time in “maternal sensitivity,” or heightened responsiveness to infant cues.7 Likewise, exclusive breastfeeding is inversely associated with postpartum depression.4, 8, 9 While depression during the third trimester (as measured by the Edinburgh Postpartum Depression Scale) is associated with lower rates of breastfeeding, exclusive breastfeeding at three months postpartum is associated with significantly decreased depression scores.8 Such findings, which suggest that breastfeeding may reduce depressive symptoms, underscore the importance of recognizing prenatal depression as a risk factor for early breastfeeding cessation and of offering extensive breastfeeding support to new mothers who show signs of depression. Achieving breastfeeding self-efficacy within the first week postpartum is positively correlated with both breastfeeding exclusivity and duration through six months postpartum.10, 11 Taken together, the benefits of breastfeeding are enormous. A 2010 cost analysis used pediatric disease data collected by the Agency for Healthcare Research and Quality, 2005 breastfeeding rates (the most recent available at that time) calculated by the Photo by Montgomery Martin / Alamy Stock Photo. 38 AJN ▼ August 2017 ▼ Vol. 117, No. 8 ajnonline.com which all nurses can support long-term breastfeeding and associated societal health. THE INTERNATIONAL BFHI Launched in 1991 by UNICEF and the WHO to increase support for breastfeeding in facilities that provide maternity care, the BFHI is the global standard for hospital support of breastfeeding. Mothers who deliver at institutions that follow BFHI practices are more likely to initiate breastfeeding and continue breastfeeding their infants for at least six weeks postpartum than mothers who deliver at institutions that do not.14-17 The BFHI was founded on 10 evidencebased practices for promoting breastfeeding (see The Ten Steps to Successful Breastfeeding). Institutional factors can promote or impede breastfeeding. Perrine and colleagues analyzed data from the Infant Feeding Practices Study II, which surveyed 1,457 women who had given birth to a single healthy child in a U.S. hospital between 2005 and 2007 and intended to exclusively breastfeed for periods ranging from less than one month to more than seven months.18 The women answered survey questions during their third trimester and approximately every month after giving birth for about 10 months. Initially, more than 85% of the women surveyed planned to breastfeed exclusively for three months or longer, but only 32.4% of the women met their intended breastfeeding goal, and 15% had stopped exclusively breastfeeding before hospital discharge. When the researchers investigated hospital practices, they found that the percentage of women who breastfed for as long as they intended rose with the number of BFHI practices the hospital followed. When hospitals followed none or only one of the Ten Steps to Successful Breastfeeding (Ten Steps), only 23.4% of the women met their intended breastfeeding goal, compared with 46.9% of the women whose hospital followed six of the Ten Steps. Successful breastfeeding was nonsignificantly associated with breastfeeding within one hour of giving birth, not giving the infant a pacifier, and rooming-in (mothers and infants remaining together throughout the hospital stay), and cessation or disruption of breastfeeding was significantly associated with administering formula to healthy breastfeeding infants.18 Similarly, a Hong Kong study found that policies prohibiting hospitals from accepting free formula from manufacturers reduced in-hospital formula supplementation and increased both in-hospital exclusive breastfeeding and breastfeeding duration.19 Unfortunately, institutional adherence to BFHI guidelines is not optimal even among hospitals that have achieved BFHI certification. In a study of 915 mothers who gave birth at four BFHI-accredited birthing facilities in Maine, only 34.6% of the mothers reported that their hospital followed all seven of the BFHI practices the researchers investigated, and 28.4% reported receiving a gift pack containing formula—a practice prohibited by the BFHI because of its association with breastfeeding cessation.15 In a study from the United Kingdom that included 1,130 mothers, fewer than 18% were happy with the breastfeeding information they received during pregnancy from health care professionals, fewer than 50% reported receiving adequate information on how to find breastfeeding support after birth, and more than 92% of those who stopped breastfeeding by six weeks postpartum said they would have liked to have continued beyond that point.20 THE BREASTFEEDING REPORT CARD National breastfeeding data are collected by the CDC and documented in the Breastfeeding Report Card, which provides information on breastfeeding practices in all states, the District of Columbia, and Puerto Rico. This report card is published every two years, most recently in 2016 ( pdf/2016breastfeedingreportcard.pdf).13 The report card indicators are based on the breastfeeding goals outlined in the U.S. Department of Health and Human Services (DHHS) Healthy People 2020 initiative. For health care facilities, the aims are to reduce the proportion of newborns who receive formula in the first two days of life and to increase the proportion of live births that occur in facilities that provide The Ten Steps to Successful Breastfeeding Every facility providing maternity services and care for newborn infants should: 1. Have a written breastfeeding policy that is routinely communicated to all health care staff. 2. Train all health care staff in the skills necessary to implement this policy. 3. Inform all pregnant women about the benefits and management of breastfeeding. 4. Help mothers initiate breastfeeding within a half-hour of birth. 5. Show mothers how to breastfeed, and how to maintain lactation even if they should be separated from their infants. 6. Give newborn infants no food or drink other than breast milk, unless medically indicated. 7. Practice rooming-in—allow mothers and infants to remain together—24 hours a day. 8. Encourage breastfeeding on demand. 9. Give no artificial teats or pacifiers (also called dummies or soothers) to breastfeeding infants. 10. Foster the establishment of breastfeeding support groups and refer mothers to them on discharge from the hospital or clinic. From the World Health Organization, Division of Child Health and Development. Evidence for the Ten Steps to Successful Breastfeeding. Geneva, Switzerland; 1998. AJN ▼ August 2017 ▼ Vol. 117, No. 8 39 recommended care for lactating mothers and their infants. The results of the last report card are positive, showing that U.S. breastfeeding levels continue to rise incrementally, with 2013 rates exceeding those of 2011 for the proportion of newborn infants who started to breastfeed (more than 81% versus 79%), were breastfeeding at six months (nearly 52% versus 49%), and were breastfeeding at one year (nearly 31% versus 27%).13, 21 But despite these improvements, Healthy People 2020 targets for breastfeeding duration and exclusivity are not yet being met (see Table 1). In 2013, the Healthy People 2020 targets of at least 60.6% of infants still breastfeeding and at least 25.5% of infants still exclusively breastfeeding at six months were met in only 12 and 16 states, respectively.13 In addition to breastfeeding rates, the report card includes data on such “breastfeeding support indicators” as the percentage of live births that occur in institutions receiving Baby-Friendly designation, the number of international board-certified lactation consultants per 1,000 live births, and the number of La Leche League leaders per 1,000 live births. In 2015, the CDC reported that policies and practices of maternity units had improved nationally since 2007, but that more work was needed to ensure that all women receive breastfeeding support and education during their hospitalization.22 According to this report, the percentage of U.S. hospitals that incorporate the majority of practices recommended in the Ten Steps increased from 29% in 2007 to 54% in 2013, but of the 3,300 maternity hospitals in the United States, only 289 had been certified as Baby-Friendly.22 BABY-FRIENDLY CERTIFICATION When institutions achieve Baby-Friendly status, not only does it help them meet Healthy People 2020 targets and improve national health outcomes, but the certification process can strengthen the organizations’ leadership and increase staff competence. When a hospital commits to the work involved in achieving this designation, it can stimulate new ways of thinking among all nursing staff, the maternity team, and the facility’s administration. In addition, with BabyFriendly certification, a facility meets the Joint Commission’s maternity care standards for exclusive breastfeeding.23 Baby-Friendly certification is awarded when a facility has successfully implemented the Ten Steps and the International Code of Marketing of Breast-Milk Substitutes.17 The 13-page BFHI Self-Appraisal Tool, which a facility uses to appraise its current practices as part of the certification process, breaks down each of the Ten Steps into several substeps in the form of yes-no questions. For example, step 1—”Have a written breastfeeding policy that is routinely communicated to all health care staff”—is followed by 11 substeps, such as, “1.1 Does the facility have a written breastfeeding/infant feeding policy that establishes breastfeeding as the standard for infant feeding and addresses all Ten Steps to Successful Breastfeeding in maternity services?” (The BFHI Self-Appraisal Tool is available online at It is important to note that these policies should take effect on pediatric units, EDs, medical-surgical units, ambulatory surgical units, outpatient units, and any others in which a mother or infant may be admitted for care.17 Training of maternity nursing staff is formal, consisting of 20 hours of instruction, including 15 sessions required by UNICEF and the WHO and five hours of supervised clinical experience to ensure clinical competence.24 Other health care providers (physicians, midwives, physician assistants, and advanced practice RNs) involved in labor, delivery, maternity, or newborn care require at least three hours of breastfeeding management education and should thoroughly understand the benefits of exclusive breastfeeding, the physiology of lactation, and which medications are safe Objective 2020 Target, % Current Rate, %a Increase the proportion of infants who are breastfed • Ever • At six months • At one year • Exclusively through three months • Exclusively through six months 81.9 60.6 34.1 46.2 25.5 81.1 51.8 30.7 44.4 22.3 Increase the proportion of employers that have worksite lactation support programs 38 Not available Reduce the proportion of breastfed newborns who receive formula supplementation within the first two days of life 14.2 17.1 Increase the proportion of live births that occur in facilities that provide recommended care for lactating mothers and their babies 8.1 18.3b a Current rates represent infants born in 2013, per the National Immunization Survey 2014-15, except where noted. b Current rate represents infants born in hospitals designated as of June 2016 as Baby-Friendly. As of June 9, 2017, the Baby-Friendly USA website had updated the rate of annual births that occur in facilities designated as Baby-Friendly to 21.5. Adapted from the Centers for Disease Control and Prevention. Breastfeeding report card, progressing toward national breastfeeding goals: United States, 2016. Atlanta; 2016. Table 1. Healthy People 2020 Breastfeeding Targets and Current Rates 40 AJN ▼ August 2017 ▼ Vol. 117, No. 8 ajnonline.com to use while breastfeeding. Health care providers who are unable to describe or demonstrate breastfeeding skills are expected to provide mothers with appropriate referrals to others who can.24 To practice in accordance with the International Code of Marketing of Breast-Milk Substitutes, institutions must not accept free or reduced-cost supplies of breast milk substitutes and feeding supplies. In addition, any educational material given to mothers must be free of commercial identifiers, such as logos. Staff members are forbidden to receive gifts in the form of nonscientific material, equipment, money, or meals from producers of breast milk substitutes or artificial nipples and bottles.24 A prospective cohort study of 2,560 mother-infant pairs in public hospitals in Hong Kong investigated the effects of the BFHI guidelines on breastfeeding rates for 12 months following birth or until the cessation of breastfeeding.19 A total of 1,320 mothers delivered before and 1,240 delivered after the hospitals had implemented the guidelines. Investigators found that the proportion of mothers exclusively breastfeeding during hospitalization rose from 17.7% before guideline implementation to 41.3% afterward, and median duration of breastfeeding increased from eight to 12.5 weeks. Increased formula supplementation was associated with higher rates of breastfeeding cessation. THE ROAD TO BABY-FRIENDLY STATUS In the United States, implementation of the BFHI occurs in four phases, called the “4-D Process.” The four phases are as follows25: • The Discovery Phase is the first phase, in which staff learn what BFHI practices include and all that they entail. In this phase, the facility or institution must register with Baby-Friendly USA (BFUSA) and submit a completed BFHI Self-Appraisal Tool, a letter of support from its chief executive officer, and a completed facility data sheet (a sample of which is included in the online BFHI Self-Appraisal Tool). It should be noted that all forms must be completed online by one of two facility personnel authorized to use the BFUSA portal. • The Development Phase is the planning phase, in which the facility plans how to implement and sustain the Ten Steps. In this phase a committee is formed to oversee the process, including policy development and staff training. There are specific time frames associated with each task in this phase and, starting at this point, phase fees are required. (A fee schedule is available at org/get-started/fee-schedule.) • The Dissemination Phase is when all facility staff members who may be affected by this policy receive an orientation. Facilities must establish a breastfeeding education program for pregnant women and new mothers and begin collecting breastfeeding data from patient medical records and audits of maternity care practices. • The Designation Phase occurs after the facility submits a “Request to Move Letter” to BFUSA. This must include data demonstrating that the facility has met the specific guidelines. According to the BFUSA website, as of June 9, 2017, 440 U.S. hospitals and birthing centers had been designated as Baby-Friendly (for a regularly updated list, see In 2007, only 2.9% of U.S. births occurred in facilities with the Baby-Friendly designation, and this figure has grown to about 21.5%, exceeding the Healthy People 2020 target of 8.1%. Bumps in the road. The process for achieving BabyFriendly status may seem simple, but implementation can be difficult. A qualitative study that included 31 participants, representing midwifery, medical, nursing, and ancillary staff from six Australian maternity hospitals, found that the understanding and personal views of staff, as well as a “bottle-feeding culture,” were often at odds with BFHI objectives.26 Unpaid education time further impeded the goals and stressed staffing levels. A San Francisco hospital found it took eight years to achieve Baby-Friendly status, with challenges including health care providers with limited breastfeeding knowledge, hospital practices that did not support rooming-in or skin-to-skin contact between mother and infant, and little breastfeeding education overall.27 Hospital policies and lack of breastfeeding education on the part of staff are not the only impediments to achieving Baby-Friendly status and improving breastfeeding rates. Population characteristics such as language barriers, homelessness, substance abuse, and poverty can present challenges as well.27 ACHIEVING SUCCESS The Guided Infant Feeding Technique (GIFT), an educational program based on the Ten Steps, was introduced to 1,086 participants from 35 Louisiana hospitals between November 2008 and February 2012.28 Within 30 months, the number of hospitals that had achieved GIFT certification rose from nine to 24. Subsequently, Louisiana’s breastfeeding rates, as documented in the CDC’s Breastfeeding Report Card, increased from 50.7% ever breastfed in 2007 (the year before the program was introduced) to 60.9% ever breastfed in 2016, though this rate is still well below the Healthy People 2020 target of 81.9%.13, 29 Similarly, among mothers giving birth in a large multicenter medical institution in Chicago, rates of exclusive breastfeeding throughout the hospital stay rose from 38.6% to 53.5% over a four-month period after nurses completed a 20-hour BFHI education program.30 Other facilities that achieved Baby-Friendly designation noted that the following factors contributed to their success31: • involvement of all staff, not only nurses AJN ▼ August 2017 ▼ Vol. 117, No. 8 41 • financial assistance in the way of grants, which help offset educational fees • ongoing technical assistance with data collection Maintaining momentum. Once an institution has been designated as Baby-Friendly, it is important to maintain the momentum that was involved in attaining that status and to continue practicing in accordance with the BFHI. A study that included 915 women who gave birth in one of four Maine hospitals that were BFHI accredited either before or during the study period found that adherence to the Ten Steps was not optimal. Only 34.6% of the women reported that the hospital followed at least seven of the steps, with 35% of the women who gave birth at hospitals working toward Baby-Friendly status and 28% of the women who gave birth at hospitals that had already achieved Baby-Friendly status reporting that they had received gift packs containing formula upon discharge.15 As the number of BFHIaccredited hospitals grows, follow-up on practices will be an important area of continued nursing research. SUPPORT FOR BREASTFEEDING Health care facility programs. The DHHS has included the promotion of breastfeeding in its Healthy People 2020 objectives since 1990. Professional organizations, including the Association of Women’s Health, Obstetric and Neonatal Nurses, the American College of Obstetricians and Gynecologists,32 and the American Public Health Association,33 encourage health care facilities that serve childbearing families to maintain programs that support the successful initiation and continuation of breastfeeding. One of the difficulties women and families face in continuing to breastfeed after hospital discharge is lack of support, and it has been shown that support after discharge can increase continued breastfeeding rates. For example, in one study, 27 first-time mothers received weekly telephone calls from a lactation consultant for three months after discharge, and then once monthly for the next three months or until the infant was weaned. At six months postpartum, 73% of the women were still breastfeeding exclusively, compared with the hospital’s baseline breastfeeding rate of 38%.34 In a larger study conducted in Italy, 114 first-time mothers were randomized into two groups: an intervention group receiving weekly structured telephone counseling by a midwife for the first six weeks postpartum, and a control group having routine postnatal visits with a physician at one, three, and five months postpartum. Overall breastfeeding rates in the intervention group were significantly higher than those in the control group, and postpartum rates of exclusive breastfeeding were consistently higher at one month (76.4% versus 42.4%), three months (54.5% versus 28.8%), and five months (25.5% versus 11.9%).35 Peer counseling is also effective in promoting breastfeeding, as demonstrated in a study of 990 women who were receiving services from Michigan’s Special Supplemental Nutrition Program for Women, Infants, and Children. Women who participated in a peer-counseling breastfeeding support program in addition to receiving prenatal services were significantly more likely to initiate breastfeeding and to continue it for six months than were those in a control group who received prenatal counseling but no peer counseling.36 A systematic review of 31 qualitative studies found that the mere presence of a supportive person who is available to assist with breastfeeding and with whom the mother has a trusting, sincere rapport can increase rates of continued and exclusive breastfeeding.37 To be effective, breastfeeding support must be culturally appropriate, thorough, specific, consistent, and delivered both prenatally and postpartum. In a qualitative study in Maryland, women reported that, though they were encouraged to breastfeed because of the benefits it offered, they were not given specific oral or written information.38 Only one of the 75 women interviewed reported having received consistent information and support both at the hospital and from the pediatrician after discharge. She was also the only one interviewed who, at 10 months postpartum, reported never having given her child formula. Workplace support is also essential in promoting continued breastfeeding. Although many women stop breastfeeding when they return to work, participation in a workplace lactation program is associated with exclusive breastfeeding at six months.39 Furthermore, Implications for Nursing Practice • Educate all nursing staff, not only those on obstetric units, on the importance of providing breastfeeding support to mothers in their care. • Do not provide formula to breastfeeding mothers in the immediate postpartum period unless indicated in accordance with the nursing assessment of the mother or infant. • Cease providing new mothers with gift packs that include formula or any materials that have the logo of formula companies. • Develop breastfeeding clinics for follow-up and support of breastfeeding mothers. • Consider RN home visits (to evaluate the infant for weight loss, dehydration, or other signs of danger) for breastfeeding mothers who did not establish breastfeeding prior to discharge. • Provide information about community resources for breastfeeding upon discharge. • Provide a comfortable, clean area for breastfeeding and pumping to visitors as well as staff. • Include breastfeeding education in undergraduate nursing curricula. 42 AJN ▼ August 2017 ▼ Vol. 117, No. 8 ajnonline.com Section 4207 of the Affordable Care Act amended the Fair Labor Standards Act to require employers to provide time and space for new mothers to express breast milk for their infants for up to one year after birth.40 Informing patients of this protection may substantially increase the likelihood that they will continue breastfeeding after returning to work. Public perception. Others’ negative attitudes about breastfeeding in public spaces can discourage exclusive breastfeeding. In a survey conducted by the New York City Department of Health and Mental Hygiene, more than half of the 1,979 respondents believed women should breastfeed in private only.41 Patients should be informed that breastfeeding in public is sanctioned by laws in 49 states (all except Idaho), as well as the District of Columbia and the U.S. Virgin Islands.42 For more information on state breastfeeding laws, visit the website of the National Conference of State Legislatures at breastfeeding-state-laws.aspx. CONCERNS ABOUT BFHI ENFORCEMENT While most health care providers would agree that the BFHI can help improve outcomes for mothers and infants, the initiative has faced criticism that it is, in some cases, too rigidly enforced and may even interfere with nursing judgment. Some have expressed concerns that, with strict enforcement, mothers who have had an operative delivery may not be provided adequate time to recover before being encouraged to initiate skin-to-skin contact with their infant and begin breastfeeding.43 Some nurses have expressed the belief that hospitals need to reduce rates of cesarean section before embarking on this initiative. The BFHI prohibition against pacifier use has also been questioned, because pacifiers have been associated with a reduced risk of sudden infant death syndrome.43 Finally, some articles in the popular press have suggested that new mothers are being made to feel guilty if they cannot or choose not to breastfeed, and some nurses, midwives, and physicians echo this sentiment, voicing discomfort with hospital policies that prohibit infant formula from being provided without a medical order. Whether following an operative delivery or a long labor and vaginal birth, it’s clearly important for exhausted mothers to be carefully observed during the postpartum period when engaged in skin-to-skin contact, breastfeeding, or bottle feeding.44 The BFHI does not prevail on mothers to breastfeed when it is unsafe for them to do so, and with appropriate observation, infants will be moved to a separate sleep surface if the mother is drowsy. Regarding pacifier use, since it is associated with shortened duration of both exclusive breastfeeding and any breastfeeding, the American Academy of Pediatrics recommends delaying the introduction of pacifiers to healthy infants born at term “until breastfeeding is well established,” generally at three to four weeks after birth.44 While BFHI practices support new mothers with breastfeeding, offering them the assistance of lactation consultants, midwives, and nurses, it is important that mothers who choose not to breastfeed are never made to feel guilty or uncomfortable. RECOMMENDATIONS At Jacobi Medical Center in New York City, before mothers give birth, we host “Baby Showers” for patients and their families. At these showers, we provide gifts, food, and extensive breastfeeding education. RNs and nursing students from a local university have been active participants in organizing and presenting at these events. Such experiences are invaluable. At a time when so much clinical learning occurs in simulation, this is one area in which hands-on learning is best. Upon discharge after childbirth, breastfeeding mothers receive written information that includes telephone numbers they can call for support. We also invite new mothers to participate in a breastfeeding clinic within a week of giving birth. At the clinic, the mothers are evaluated by a lactation specialist, and the infants are weighed and examined by a pediatric health care provider. The lactation counselor observes breastfeeding, offering assistance as needed. This visit incorporates a support group, led by a health educator, in which mothers are encouraged to share what has helped them with breastfeeding. In addition to educating the mothers and families, the clinic provides an opportunity for medical and nursing students to participate and learn more about breastfeeding. Both RNs and local nursing students have led some of the groups. Although the data suggest that the numbers of women breastfeeding exclusively are increasing, significant improvements must be made if we are to meet Healthy People 2020 targets. All nurses can help promote breastfeeding in their practice and in speaking with their friends and neighbors (see Implications for Nursing Practice). We must also work to include breastfeeding education in the curricula of nursing and medical education programs. ▼ Regina Cardaci is associate director of Women’s Health Services at Jacobi Medical Center, Bronx, NY. The author acknowledges Michael Zinaman, MD, chair of the Department of Obstetrics and Gynecology, North Bronx Health Network, for his support of this project. Contact author: . The author and planners have disclosed no potential conflicts of interest, financial or otherwise. REFERENCES 1. Hetzner NM, et al. Associations among feeding behaviors during infancy and child illness at two years. Matern Child Health J 2009;13(6):795-805. For one additional continuing education activity on the Baby-Friendly Hospital Initiative, go to AJN ▼ August 2017 ▼ Vol. 117, No. 8 43 2. Ladomenou F, et al. Protective effect of exclusive breastfee

 

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