BA 101

A large publically traded company will receive a major financial benefit from the sell of its stock ________ .Select one:a. each time a shareholder buys or sells the stock b. when the stock is traded on the New York Stock Exchange c. at the initial public offering

Question 2

Not yet answeredScored out of 1.00Flag question

Question text

Although money has no intrinsic value, it is demanded throughout society. Among the reasons that money is demanded are:Select one:a. It is not easy to counterfeit.b. It is divisible c. it stores value.

Question 3

Not yet answeredScored out of 1.00Flag question

Question text

Bank Of The North (B of N) gave out large loans to many of their customers. After reviewing the bank’s records, B of N sees that the bank is now below the Federal Reserve’s minimum reserve requirement. A member bank, Helper Bank, has excess reserves. B Of N borrows enough money from Helper Bank to reach their reserve requirement. The rate of interest that B of N will pay to Helper Bank for the loan is the ________ rate.Select one:a. intrabank b. institutional c. federal funds

Question 4

Not yet answeredScored out of 1.00Flag question

Question text

Bonds are:Select one:a. A partial ownership in a companyb. a way to raise capital that does not need to be repaidc. a formal contract to repay borrowed money with interest at fixed intervals.

Question 5

Not yet answeredScored out of 1.00Flag question

Question text

Historically many methods and markets were used to raise capital, but the primary methods that have evolved in modern times are the:Select one:a. land markets and housing markets b. Over the counter markets c. bond markets and stock markets

Question 6

Not yet answeredScored out of 1.00Flag question

Question text

If the federal government wanted to find out how much M1 money is in circulation in the US, it would look at which of the following?Select one:a. Savings accounts b. Money market mutual funds c. Demand deposits and other checking accounts

Question 7

Not yet answeredScored out of 1.00Flag question

Question text

If you were given the task of totalling all the M2 money in circulation in the US, which of the following would you include in your calculations?Select one:a. 1.Demand deposits and other checking accounts b. Currency c. 2.Savings accounts

Question 8

Not yet answeredScored out of 1.00Flag question

Question text

One of the ways the Federal Reserve System seeks to stabilize prices is by:Select one:a. controlling the price of goods b. engaging in trade treaties c. regulation of interest rates

Question 9

Not yet answeredScored out of 1.00Flag question

Question text

Stocks or equity securities are:Select one:a. Debt to the company b. Managed by your local commercial bank c. financial instruments that may include share of a company’s future profits.

Question 10

Not yet answeredScored out of 1.00Flag question

Question text

The Federal Reserve lowers the reserve requirement from 7 percent to 6 percent. Consequently banks must set aside less money to meet the reserve requirement. They have more money to lend to their customers and are able to lower the rate of interest they charge. These conditions make it less expensive for people and businesses to borrow money. Because they can borrow more, they can spend more. If people are spending more, prices go up. With this action, the Fed has lessened the likelihood of ________.Select one:a. inflation b. free market c. recession

Question 11

Not yet answeredScored out of 1.00Flag question

Question text

The Federal Reserve raises the reserve requirement from 7 percent to 8 percent. Consequently banks must set aside more money and consequently have less money to lend. The result is that the banks will raise the interest rate they charge to their customers. These conditions make it harder and more expensive for people and businesses to borrow money. Because they can’t borrow as much, they can’t spend as much. If people aren’t spending as much, prices don’t go up. With this action, the Fed has lessened the likelihood of ________.Select one:a. recession b. free market c. inflation

Question 12

Not yet answeredScored out of 1.00Flag question

Question text

The Queen of England says by royal decree that the British Pound will be the currency of the land and it will be backed by the government as legal tender for all debts public and private. The British Pound is an example of:Select one:a. Commodity money b. Virtual money c. Fiat money

Question 13

Not yet answeredScored out of 1.00Flag question

Question text

What are Bonds?Select one:a. a partial ownership in a company b. profit c. debt

Question 14

Not yet answeredScored out of 1.00Flag question

Question text

What government entity is responsible for monitoring the U.S. money supply?Select one:a. Federal Trade Commission b. Federal Labor Relations Authority c. Federal Reserve

Question 15

Not yet answeredScored out of 1.00Flag question

Question text

What is a reason someone might consider trying Bitcoin?Select one:a. The value of my Bitcoins can vary widely based on supply and demand. b. There is a possibility of fraud or theft. c. One would not have to pay high transaction costs associated with transferring funds through a bank.

Question 16

Not yet answeredScored out of 1.00Flag question

Question text

What is a reason you might be hesitant to use Bitcoin?Select one: a. It is less expensive to accumulate than other types of currency. b. I would not need to have a bank account. c. The value of my Bitcoins can vary widely based on supply and demand.

Question 17

Not yet answeredScored out of 1.00Flag question

Question text

What is the biggest advantage of borrowing money, such as a loan or a bond, instead of issuing stock in order to raise capital?Select one:a. The interest rate is usually less b. The business owner does not have to worry about legal liability c. The current business owner retains complete ownership of the business

Question 18

Not yet answeredScored out of 1.00Flag question

Question text

Why don’t we use the barter system today:Select one:a. Of specialization theory promoted by Adam Smith b. Of the role of commercial banks. c. It is difficult to find two parties that have something they both want to trade.

Question 19

Not yet answeredScored out of 1.00Flag question

Question text

You pay your neighbor $100 in exchange for the used washing machine she is selling. Your neighbor puts that $100 into her pocket and takes her family out to the movies and a nice dinner at the end of the week. She still has $20 left after this outing and decides to put the remaining $20 into her savings account. This is an example of:Select one:a. Exchange rate b. Time value of money c. Store of value

Question 20

Not yet answeredScored out of 1.00Flag question

Question text

Your large business just issued bonds for $10 million. You are excited about utilizing the new funds to expand. As you create your budgets for the upcoming years you need to keep in mind that your company will need to ________.Select one:a. Find someone who would like to pay $10 million for your bond. b. Pay the interest and a portion of the principal balance to the bank each month for the duration of the bond term. c. Pay interest payments annually and repay the entire $10 million at the end of the bond term.

Assume That A Bond Will Make Payments Every Six Months As Shown On The Following Timeline

Shellie Brady

 

Managerial Finance

 

Must be completed in Excel

 

 

 

Chapter 6

 

2. Assume that a bond will make payments every six months as shown on the following timeline

 

(using six-month periods):

 

0          1                     2                      3                      20

 

$20                   $20                  $20                   20+$1000

 

 

 

a. What is the maturity of the bond (in years)?

 

b. What is the coupon rate (in percent)?

 

c. What is the face value?

 

4. Suppose the current zero-coupon yield curve for risk-free bonds is as follows:

 

Maturity (years) 1                     2                     3                      4                      5

 

YTM                             5.00%              5.50%              5.75%               5.95%               6.05%

 

a. What is the price per $100 face value of a two-year, zero-coupon, risk-free bond?

 

b. What is the price per $100 face value of a four-year, zero-coupon, risk-free bond?

 

c. What is the risk-free interest rate for a five-year maturity?

 

6. Suppose a 10-year, $1000 bond with an 8% coupon rate and semiannual coupons is trading for

 

a price of $1034.74.

 

a. What is the bond’s yield to maturity (expressed as an APR with semiannual compounding)?

 

b. If the bond’s yield to maturity changes to 9% APR, what will the bond’s price be?

 

7. Suppose a five-year, $1000 bond with annual coupons has a price of $900 and a yield to maturity

 

of 6%. What is the bond’s coupon rate?

 

11. Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity,

 

a face value of $1000, and a coupon rate of 7% (annual payments). The yield to maturity

 

on this bond when it was issued was 6%.

 

a. What was the price of this bond when it was issued?

 

b. Assuming the yield to maturity remains constant, what is the price of the bond immediately

 

before it makes its first coupon payment?

 

c. Assuming the yield to maturity remains constant, what is the price of the bond immediately

 

after it makes its first coupon payment?

 

13. Consider the following bonds:

 

Bond                Coupon Rate (annual payments)          Maturity (years)

 

A                                  0%                                                       15

 

B                                  0%                                                       10

 

C                                  4%                                                       15

 

D                                  8%                                                       10

 

a. What is the percentage change in the price of each bond if its yield to maturity falls from 6%

 

to 5%?

 

b. Which of the bonds A–D is most sensitive to a 1% drop in interest rates from 6% to 5% and

 

why? Which bond is least sensitive? Provide an intuitive explanation for your answer.

 

 

 

 

 

 

 

Chapter 9

 

3. Suppose Acap Corporation will pay a dividend of $2.80 per share at the end of this year and $3

 

per share next year. You expect Acap’s stock price to be $52 in two years. If Acap’s equity cost of

 

capital is 10%:

 

a. What price would you be willing to pay for a share of Acap stock today, if you planned to

 

hold the stock for two years?

 

b. Suppose instead you plan to hold the stock for one year. What price would you expect to be

 

able to sell a share of Acap stock for in one year?

 

c. Given your answer in part (b), what price would you be willing to pay for a share of Acap

 

stock today, if you planned to hold the stock for one year? How does this compare to your

 

answer in part (a)?

 

5. NoGrowth Corporation currently pays a dividend of $2 per year, and it will continue to pay

 

this dividend forever. What is the price per share if its equity cost of capital is 15% per year?

 

6. Summit Systems will pay a dividend of $1.50 this year. If you expect Summit’s dividend to grow

 

by 6% per year, what is its price per share if its equity cost of capital is 11%?

 

12. Procter & Gamble will pay an annual dividend of $0.65 one year from now. Analysts expect

 

this dividend to grow at 12% per year thereafter until the fifth year. After then, growth will level

 

off at 2% per year. According to the dividend-discount model, what is the value of a share of

 

Procter & Gamble stock if the firm’s equity cost of capital is 8%?

 

17. Maynard Steel plans to pay a dividend of $3 this year. The company has an expected earnings

 

growth rate of 4% per year and an equity cost of capital of 10%.

 

a. Assuming Maynard’s dividend payout rate and expected growth rate remains constant, and

 

Maynard does not issue or repurchase shares, estimate Maynard’s share price.

 

b. Suppose Maynard decides to pay a dividend of $1 this year and use the remaining $2

 

per share to repurchase shares. If Maynard’s total payout rate remains constant, estimate

 

Maynard’s share price.

 

c. If Maynard maintains the dividend and total payout rate given in part (b), at what rate are

 

Maynard’s dividends and earnings per share expected to grow?

 

21. Sora Industries has 60 million outstanding shares, $120 million in debt, $40 million in cash,

 

and the following projected free cash flow for the next four years::

 

Year       0                              1              2              3              4

 

Earnings and FCF Forecast ($ millions)

 

1 Sales                                                                  433.0                      468.0      516.0      547.0      574.3

 

2     Growth versus prior year                                                         8.1%       10.3%     6.0%       5.0%

 

3  Cost of Goods Sold                                                                       (313.6)   (345.7)   (366.5)   (384.8)

 

4  Gross Profit                                                                                     154.4      170.3      180.5      189.5

 

5  Selling, General and Administrative                                         (93.6)     (103.2)   (109.4)   (114.9)

 

6  Depreciation                                                                                   (7.0)        (7.5)        (9.0)        (9.5)

 

7  EBIT                                                                                                   53.8        59.6        62.1        65.2

 

8  Less:  Income Tax at 40%                                                           (21.5)     (23.8)     (24.8)     (26.1)

 

9  Plus: Depreciation                                                                         7.0          7.5          9.0          9.5

 

10 Less:  Capital Expenditures                                                      (7.7)        (10.0)     (9.9)        (10.4)

 

11 Less:  Increase in NWC                                                              (6.3)        (8.6)        (5.6)        (4.9)

 

12   Free Cash Flow                                                                           25.3        24.6        30.8        33.3

 

 

 

24. You notice that PepsiCo (PEP) has a stock price of $72.62 and EPS of $3.80. Its competitor,

 

the Coca-Cola Company (KO), has EPS of $1.89. Estimate the value of a share of Coca-Cola

 

stock using only this data.

Chapter 7 – Finance

Problem 3. The following are the monthly rates of return for Madison Cookies and for Sophie Electric during a six-month period. Madison Sophie Month Cookies Electric 1 -0.04 0.07 2 0.06 -0.02 3 -0.07 -0.1 4 0.12 0.15 5 -0.02 -0.06 6 0.05 0.02 Compute the following: a. Average mnthly rate of return Ri for each stock b. Standard deviation of returns for each stock c. Covariance between the rates of return d. The correlation coefficient between the rates of return What level of correlation did you expect? How did your expectations compare with the computed correlation? Would these two stocks be good choices for diversification? Why or Why not? ————————————————————— The following are monthly percentage price changes for four market indexes. Month DJIA S&P 500 Russell 2000 Nikkei 1 0.03 0.02 0.04 4.00 2 9.07 0.06 0.10 (0.02) 3 (0.02) (0.01) (0.04) 0.07 4 0.01 0.03 0.03 0.02 5 0.05 0.04 0.11 0.02 6 (0.06) (0.04) (0.08) 0.06 Compute the following: a. Average monthly rate of return for each index. b. Standard deviation for each index c. Covariance between the rates of return for the following indexes: DJIA – S&P500 S&P 500 – Russell 2000 S&P 500 – Nikkei Russell 2000 – Nikkei d. The correlation coefficients for the same four combinations e. Using the answers from parts (a), (b), and (d), calculate the expected return and standard deviation of a portfolio consisting of equal parts of: (1) the S&P and the Russell 2000, and (2) the S&P and the Nikkei. Discuss the two portfolios. —————————————————————– The standard deviation of Shamrock Corp. stock is 19 percent. The standard deviation of Cara Co. stock is 14 percent. The covariance between these two stocks is 100. What is the correlation between Shamrock and Cara Stock?

International Business Communications

Unit 1 db2

Primary Task Response: Within the Discussion Board area, write 400–600 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.Consider an organization you work for, have worked for, or would like to work for.  Then, identify a country in which they do business or might do business outside of the United States. You also may select a company in contemporary business news that conducts business globally.Discuss the key differences in cultural variables between the United States and the country that are important when conducting business in the selected country. What are the implications of these differences for the practice of business? Consider political, economic, legal, educational, and social systems of the selected country. Refer to Intellipath, MUSE, and Beyond the Book references in creating your response. Include a response to the following questions in your discussion writing at least one paragraph for each bullet point:Describe globalization and its benefits to business operations.  What kind of management orientation style (ethnocentric, polycentric, regiocentric, geocentric) would you use to be most effective given the cultural attributes of the country?  How would you overcome the anticipated barriers to communication? Provide specific examples.

Unit 2 – Individual Project

You are in the role of project manager for a coffee franchise global expansion project. You plan to expand into three different countries. The magnitude of the project requires you to prepare for the project kickoff meeting and business negotiations with the project team who are potential partners from Mexico, China, and Saudi Arabia. You understand that these cultures are vastly different. They have different business customs, social protocols, and languages, so conducting business with each country requires a customized approach.To prepare for your first outreach effort with each country, analyze the cultural similarities and differences that exist between the countries and the United States using Geert Hofstede’s Six Cultural Dimensions as discussed in class. Note that the three countries are characterized by collectivism while the United States has an individualist culture.Create a bar graph and/or table that summarizes the key cultural dimension comparison. Then, compare and contrast each country according to your findings. Discuss the implications of the relative cultural dimensions. How might they impact managing the global expansion project? Remember that you are adapting your approach from a United States centric view. (400-600 words).This assignment lays the foundation for IP4, where you will apply your findings to forming an effective global team.Step One:  Visit Geert Hofstede Cultural Dimensions Step Two:  Create a country comparison using the United States in first dropdown menu box to see the values for the six cultural dimensions. After selecting the United States, a second and a third country can be chosen in the second dropdown menu box. Keep the United States in the first box and then repeat for each country (Mexico, China, and Saudi Arabia) involved in the fast food expansion project to see a comparison of their scores.Step Three: Create a bar graph and/or table to highlight how the four countries compare to the United States by using the value scores under the comparison to create the bar chart.  How to make a bar chart on Microsoft Word:Click “Insert” tab  Click “Chart” in the Illustrations Group  Select “Bar”  Click “OK” to insert a chart and a spreadsheet will open alongside your Word document. The spreadsheet contains sample figures surrounded by a blue border. Column “A” contains data labels. The remaining columns contain data.  Click a corner of the border. Drag it down or up to add or remove items from the graph.Step Four:Using your findings:Explain Hofstede’s cultural dimensions.  Using the United States as a basis for comparison, evaluate each country’s similarities and differences relative to the franchise business deployment.  Discuss the implications for your initial communications within each country.  For example, what is the impact of collectivism relative to individualism regarding management communication?

unit 3 db

Primary Task Response: Within the Discussion Board area, write 400–600 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.Idea:In preparing to launch the coffee franchises in China, Mexico, and Saudi Arabia, you are planning to visit each country to interview potential global team members.  You know it is important to be aware of the value differences and social customs in each country to develop trusting relationships to avoid potential conflicts. Compare and contrast your approach to doing business and building relationships among the global team members. Apply the readings, Intellipath, and library resources to respond to the following:Discuss collectivism and how it applies to China, Mexico, and Saudi Arabia.  Explain the role of relationship building in China, Mexico, and Saudi Arabia compared to the United States.  Explain the cultural value differences in time (monochronic versus polychronic cultures), approaches to decision making (objective or subjective approach), and individualism that could potentially occur during global operations.   What are some of the nonverbal behavior differences among the countries such as silence, eye contact, body movements, proxemics or interruptions that may affect doing business with your global team?