MBA570 Full Course (February 2019)

MBA 570 Corporate Finance

Module 1 Discussion

This discussion question for this module has two parts. Respond to both parts to receive full credit for this assignment.

Part 1: What is a hostile takeover and what generally happens to the stock price of the firm being acquired in a hostile takeover?

Part 2: How does a hostile takeover affect the company’s stakeholders (shareholders, executives, employees, and society in general)? Is it usually beneficial or detrimental to these stakeholders? Why?

Include some news that is less than a year old that discusses an in-process or recently completed merger in your answer. Briefly discuss the main issues in that merger and whom the merger is likely to benefit or hurt.

The ProQuest database at the Saint Leo University Library website can be a useful tool for completing this assignment. Click here for instructions on accessing ProQuest.

MBA 570 Corporate Finance

Module 2 Discussion

The Law of One Price states that equivalent investment opportunities trading in different competitive markets will have the same price. Yet, one can find examples where that rule seems to be violated. It is a well-known fact that Americans pay a much higher price for most prescription drugs than people in most other countries. Also, the price (when adjusted for exchange rates) for the same make and model of automobile varies greatly across different countries. Furthermore, the price of a barrel of crude oil varies between locations. For example, on October 12, 2012, the price for Brent crude oil produced in Europe was $114.21 and the price for West Texas Intermediate (WTI) crude oil produced in Texas was $91.86.

Do these three cases demonstrate that the Law of One Price is false? Why or why not?

MBA 570 Corporate Finance

Module 3 Discussion

Respond to all of the questions to receive full credit for this assignment.

The capital budgeting process is important, but is it the most important process that a firm undertakes. Why or why not? If you believe there is a more important process, what is it and why do you think it is more important?

MBA 570 Corporate Finance

Module 4 Discussion

This discussion question for this module has two parts. Please follow the directions carefully to receive full credit for this assignment.

Every year, Fortune magazine publishes a list of the “World’s Most Admired Companies” and Barron’s magazine publishes a list of the “World’s Most Respected Companies.” Choose one company from the top twenty on either of these lists from the most recent year available that you also admire or respect and one company that you admire or respect little.

Part 1: What criteria does the magazine use to evaluate companies for the list? Do you agree with these criteria? Why or why not?

Part 2: Why do you admire the company you chose as a favorite? Why do you not respect the company you chose as not admirable?

Both Barron’s and Fortune are available at the Saint Leo University Library website via the ProQuest database. Keep in mind that the most recent list available may be from last year. Click here for instructions on accessing ProQuest.

MBA 570 Corporate Finance

Module 5 Discussion

This discussion question for this module has two parts. Respond to both parts to receive full credit for this assignment.

Part 1: There is evidence that small stocks and value stocks perform better over the long term than the market averages. What are some logical reasons for this phenomenon?

Part 2: There is strong evidence that many investors suffer from familiarity bias and overconfidence bias. Can you explain why these biases might exist? Can you think of a situation in which you might make these mistakes (if you hadn’t learned about these biases in this module)?

Include some news that is less than a year old that is applicable to this discussion.

The ProQuest database at the Saint Leo University Library website can be a useful tool for completing this assignment. Click here for instructions on accessing ProQuest.

MBA 570 Corporate Finance

Module 6 Discussion

This discussion question has two parts. Respond to both parts to receive full credit for this assignment.

Part 1: Your friend is asking for advice. She is planning to retire in 40 years and wants to know what investments she should choose. She also wants to know if she should use an IRA or 401k or some other sort of retirement vehicle. Please advise her.

Part 2: You have another friend that already has a sizable amount saved for his retirement, but he wants to retire in 10 years. What type of advice would you give him about what type of investment to make and as to whether or not to use a retirement plan?

Include some news or advice from an article that is less than a year old that is applicable to this discussion.

The ProQuest database at the Saint Leo University Library website can be a useful tool for completing this assignment. Click here for instructions on accessing ProQuest.

MBA 570 Corporate Finance

Module 7 Discussion

This discussion question has two parts. Use Figure 15.7 in your textbook which shows the net debt-to-enterprise value ratio for some select industries to answer both parts of the question. Respond to both parts to receive full credit for this assignment.

Part 1: Firms in the real estate investment trusts (REITs), airlines, electric utilities, and paper products industries tend to have high leverage. Explain why firms in these industries would prefer to have high leverage.

Part 2: Firms in the computer hardware, footwear, apparel and luxury goods, and data processing industries tend to have low leverage. Explain why firms in these industries would prefer to have low leverage.

Include some news from an article that is less than a year old that is applicable to this discussion.

The ProQuest database at the Saint Leo University Library website can be a useful tool for completing this assignment. Click here for instructions on accessing ProQuest.

MBA 570 Corporate Finance

Module 8 Discussion

This discussion question has two parts. Respond to both parts to receive full credit for this assignment.

Part 1: Why do firms choose to make large increases in their dividends or start a stock repurchase program? Why would they choose one of these payout methods over another?

Part 2: Why do firms choose to cut or eliminate their dividends? What usually happens to the stock price of a company that does this?

Include some news or advice from an article that is less than a year old that is applicable to this discussion.

The ProQuest database at the Saint Leo University Library website can be a useful tool for completing this assignment. Click here for instructions on accessing ProQuest.

MBA 570 Corporate Finance

Module 3 Written Assignment 1

Writing Assignment 1 Instructions and Rubric

Instructions

The first writing assignment is due at the end of Module 3. You are advised to begin working on the first writing assignment during Module 1.

This writing assignment should be in an essay format. It should use two or more published news or academic articles which are less than a year old as cited references. In your essay, you should answer the following questions:

? What are value stocks?

? What are growth stocks?

? What is the reasoning that investors use for purchasing value or growth stocks?

? Has value or growth investing worked best over the long term?

? Do you prefer one of these investment methods? Justify your response.

? Find recent examples of news articles in which someone is described as a value or

growth investor. How successful have they been with this method?

The essay will be in APA format and be 500-1,000 words in length (this range includes everything in the assignment including your name, title, and citations). Turnitin.com software will be used to ensure that submitted assignments are original works. See the rubric on the next page for complete grading criteria.

The ProQuest database at the Saint Leo University Library website can be a useful tool for completing this assignment. Click here for instructions on accessing ProQuest.

Hint: One way to find information for this assignment is to use the library’s database for the Wall Street Journal or Barron’s and search for a recent article with the words “value investor” or “growth investor” in the text of the article.

Submit Writing Assignment 1 to the Assignment box no later than Sunday 11:59 PM

MBA 570 Corporate Finance

Module 6 Written Assignment 2

Instructions

The second writing assignment is due at the end of Module 6. You are advised to begin working on the second writing assignment during Module 4.

This writing assignment should be in an essay format. It should use two or more published news or academic articles which are less than a year old as cited references. This writing assignment addresses the values learning outcome (LO7) as detailed in the syllabus.

For this assignment, assume that you are a corporate manager that needs to make an important decision. Your company currently has its largest factory (700 employees) located in the Midwestern United States. This factory is currently not competitive in international markets and its poor results are threatening to force the entire company into bankruptcy. The company employs 3,000 in other areas of the U.S.

You have to decide whether to keep the factory where it is or move it to Canada or Ireland. You can only keep one factory open. The corporate tax rates of Canada (20%) and Ireland (15%) are much lower than the U.S. (35%). Labor costs will not change significantly because the cost of training new employees will be offset by the replacement of highly paid senior employees with younger employees in the other countries. The old factory needs extensive renovation which will still not leave it as efficient as the new factories planned for the new countries. Therefore, the NPV of the capital investments involved are equal for all three countries.

You have calculated the NPV of each choice. The NPV of keeping the U.S. factory open is $1,000,000. The NPV of moving the factory to Canada or Ireland is $10,000,000 and $35,000,000 respectively.

In this writing assignment, you should answer the following questions:

? Where should your factory be located? Why?

? Who are the stakeholders in this decision? How did you take the stakeholders into account when making your decision?

? How does your decision support responsible stewardship and integrity in the context of financial management?

The essay will be in APA format and be 500-1,000 words in length (this range includes everything in the assignment including your name, title, and citations). Turnitin.com software will be used to ensure that submitted assignments are original works. See the rubric on the next page for complete grading criteria.