Bus 657 Entire Course / Corporate Management Finance

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BUS 657 Week 1 DQ1 Maximizing Shareholder Return

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Maximizing Shareholder Return. Maximizing shareholder returns usually implies
that the firm must also satisfy customers, employees, suppliers, creditors and other stakeholders. First, rank
stakeholders as to expected risk and return and then rank stakeholders as to their importance to the organization’s
success. Explain your ranking differences and/or similarities. Respond to at least two of your classmates’
postings

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BUS 657 Week 1 DQ2 Retirement Savings

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Retirement Savings. A Person plans to retire today and expects to begin living off
their retirement savings beginning one year from now and continuing until death. Identify and explain key
variables that will influence the amount of income that can be taken from retirement saving annually until death.
How will increasing and decreasing these key variables impact the income amount? Respond to at least two of
your classmates’ postings.

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BUS 657 Week 1 Assignment Chapter 2 Minicase

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Chapter 2 Mini Case: Financial Statement and Cash Flow Analysis. Complete the Mini Case
on page 63 of your text. Use formulas to calculate the ratios. Round to one decimal place. Clearly label the
analysis. Complete all requirements of the case study.

Jaedan Industries has the following account balances as of December 31, 2010 (Found on page 64 & 65 of the
text). The firm’s dividend payout ratio is 25% and the tax rate is 34%. The firm’s stock price on December 31,
2009, was $42.89 and on December 31, 2010, it was $56.82. Construct an income statement, balance sheet,
statement of retained earnings, and statement of cash flows for 2010. Also, determine the firm’s free cash flow
and calculate the liquidity, activity, debt, profitability, and market ratios for Jaedan industries. Perform a DuPont
analysis and compare the firm to the industry ratios (see last table in this sequence). Highlight any financial
strengths and weaknesses Jaedan Industries may have

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BUS 657 Week 2 DQ1 Stock Market Investing

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Stock Market Investing. A common fallacy in stock market investing is assuming
that a good company makes a good investment. Suppose we define a “good company” as one that has experienced
rapid growth in the recent past. Explain the reasons why shares of “good companies” may or may not turn out to
be “good investments.” Respond to at least two of your classmates’ postings

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BUS 657 Week 2 DQ2 Total Risk

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Total Risk. What constitutes total risk, and how is it measured? Of the two
components of total risk, discuss which one investors can eliminate? Explain the remaining risk, and how is it
measured? Respond to at least two of your classmates’ postings.

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BUS 675 Week 2 Assignment Chapter 6 Minicase

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Chapter 6 Mini-Case: Risk, Return, and the Capital Assets Pricing Model. Review the mini
case on page 226 of your text and answer the following questions:

Andrea Corbridge is considering forming a portfolio consisting of Kalama Corp. and Adelphia Technologies. The
two corporations have a correlation of -0.1789, and their expected returns and standard deviations are as follows: Calculate the frontier for all possible investment combinations of Kalama Corp. and Adelphia
Technologies (from 0% to 100%, in 1% increments). Determine the optimal risky portfolio if the risk-free
rate is 3%.
b. Andrea has $50,000 and wants to earn a 19% expected return on her investment. What is the optimal
manner in which to structure her portfolio-both in dollar amounts and in weights relative to her $50,000-
based on the preceding information?
c. Andrea is also seriously considering buying some stock in Medford Barnett Corporation (MBC). The
stock prices of MBC and the S&P for the past 25 mont

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BUS 657 Week 3 DQ1 N.P.V. & I.R.R.

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N.P.V. & I.R.R. Why is the N.P.V. considered to be theoretically superior to all other
capital budgeting techniques? Reconcile this reasoning with the prevalence in practice of using the I.R.R. How
would you respond to your C.F.O. if she instructed you to use the I.R.R. technique to make capital budgeting
decisions on projects with cash flow streams that alternate between inflows and outflows? Respond to at least two
of your classmates’ postings.

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BUS 657 Week 3 DQ2 Sensitivity Analysis vs. Scenario Analysis

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Sensitivity Analysis vs. Scenario Analysis. Explain the difference between
sensitivity analysis and scenario analysis. Offer and argument for the proposition that scenario analysis offers a
more realistic picture of a project’s risk than does sensitivity analysis. Respond to at least two of your classmates’
postings.

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BUS 657 Week 3 Assignment Chapter 9 Minicase

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Chapter 9 Mini Case: Cost of Capital and Project Risk. Read the mini-case on page 349 of
your text and answer the following questions:
a. Determine the current weighted average cost of capital for CWC.
b. Determine the appropriate discount rate for the healthy bottle water project.
c. Should the firm undertake the healthy bottled water project? As part of your analysis, include a sensitivity
analysis for sales price, variable costs, fixed costs, and unit sales at +/- 10%, 20%, and 30% from the base
case. Also perform an analysis of the following two scenarios:
Best case: Selling 2,500,000 units at a price of $1.24 each, with variable production costs of
$0.22 per unit.
Worst case: Selling 950,000 units at a price of $1.32 per unit, with variable production costs of
$0.27 per unit

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BUS 657 Week 4 DQ1 Corporate Insiders & Outside Investors

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Corporate Insiders & Outside Investors. Do empirical studies support or reject the
notion that corporate insiders earn abnormal profits on their trades? What about outside investors who mimic their
trades? What forms of market efficiency, if any, are supported by these studies? Respond to at least two of your
classmates’ postings.

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BUS 657 Week 4 DQ2 Pecking Order Theory

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Pecking Order Theory. What is the main premise underlying the pecking order
theory? What is the “pecking order” of sources of financing? Why is dividend policy so important to this theory?
How does the concept of financials slack relate to this theory? Respond to at least two of your classmates’
postings.

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BUS 657 Week 4 Assignment Chapter 14 Minicase

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Chapter 14 Mini Case: The Link between Capital Structure and Capital Budgeting. Review
the mini case on page 477 of your text. Complete all requirements of the case.

Fiera Corporation is evaluating a new project that costs $45,000. The project will be financed using 40% debt and
60% equity, thus maintaining the firm’s current debt-to-equity ratio. The firm’s stockholders have a required rate
of return of 18.36%, and its bondholders expect a 10.68% rate of return. The project is expected to generate
annual cash flows of $13,000 before taxes for the next two decades. Fiera Corporation is in the 36% tax bracket

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BUS 657 Week 5 DQ1 I.P.O.

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IPO. Discuss the various issues that must be considered in selecting an investment
banker for an IPO. Which type of placement is usually preferred by the issuing firm? Why? Respond to at least
two of your classmates’ postings

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BUS 657 Week 5 DQ2 Top-Down & Bottom- Down Sales Forecast

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Top-Down and Bottom-Up Sales Forecast. Describe the differences between the top
down and the bottom up sales forecast methods. Describe advantages and disadvantages of each. Do you think
one approach is likely to be more accurate than the other? Explain. Respond to at least two of your classmates’
postings

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BUS 657 Week 5 Assignment Chapter 22 Minicase

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Mini Case: Cash Conversion, Inventory, and Receivables Management. Review the mini case
on page 762 of your text. Complete all requirements of the case.

Bracelet Blanks, Inc. (BB) generated $43,803,000 in sales (all on credit) during 2010. The cost of goods sold was
57% of that total. Accounts receivable totaled $3,240,222, inventory totaled $842,020, and accounts payable
totaled $1,826,070
Calculate BB’s current cash conversion cycle.

b. BB currently uses 3,000 ingots of aluminum each year to manufacture bracelet blanks. The order cost
(including shipping) is $5,000 per order, and carrying costs are $75 per unit per year. Determine the
economic order quantity, the amount of safety stock, and the reorder point for aluminum ingots assuming
there is a 1-week lead time and the firm would like a safety stock of 3%.

c. In an attempt to boost sales, BB is considering relaxing its credit standards by extending more credit to
small firms. BB charges $1.50 per unit. Variab

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BUS 657 Week 6 DQ1 Option Pricing

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Option Pricing. Discuss differences between the binomial option pricing model and
the risk-neutral method of option pricing. Respond to at least two of your classmates’ postings.

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BUS 657 Week 6 DQ2 Agency Problems

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Agency Problems. Explain how agency problems may lead to non value-maximizing
motives for mergers. Discuss the various academic theories offered as the rationale for motives induced by the
agency problem. Respond to at least two of your classmates’ postings

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BUS 657 Week 6 Final Paper

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Focus of the Final Paper
Develop a well-written researched paper. Your paper should address one of the topics listed below. As an alternative, you
may select a topic you are interested. If you select an alternative topic it must be relevant to the material covered in the
course and must be approved by your instructor no later than the close of the 4th
Week.
Capital Budgeting: Processes and Techniques
Capital Structure
Financing: Long Term and Short Term
Valuation, Risk & Returns
Options, Derivatives

Your paper should be based on literature and/or real experiences you have observed. It is important that you frame your
paper in theory, application, examples and current trends. When appropriate, compare and contrast
method/techniques/models, explain strengths and weaknesses, analyze as to meaning and application, draw inferences