Business Finance
Assume that you recently graduated and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm’s clients is Michelle DellaTorre,a professionaltennis player whohas justcometotheUnitedStates fromChile. DellaTorre is a highly ranked tennis player who would like to start a company to produce and market apparel she designs. She also expects to invest substantial amounts of money through Balik and Kiefer. DellaTorre is very bright, and she would like to understand in generaltermswhatwillhappentohermoney.Yourbosshasdevelopedthefollowingsetof questions you must answer to explain the U.S. financial system to DellaTorre. a. Why is corporate finance important to all managers? b. Describe the organizational forms a company might have as it evolves from a startup to a major corporation. List the advantages and disadvantages of each form. c. How do corporations go public and continue to grow? What are agency problems? What is corporate governance? d. What should be the primary objective of managers? (1) Do firms have any responsibilities to society at large? (2) Is stock price maximization good or bad for society? (3) Should firms behave ethically? e. What three aspects of cash flows affect the value of any investment? f. What are free cash flows? g. What is the weighted average cost of capital? h. Howdofreecashflowsandtheweightedaveragecostofcapitalinteracttodetermine a firm’s value? i. Who are the providers (savers) and users (borrowers) of capital? How is capital transferred between savers and borrowers? j. What do we call the cost that a borrower must pay to use debt capital? What two componentsmakeupthecostofusingequitycapital?Whatarethefourmostfundamental factorsthataffectthecostofmoney,orthegenerallevelofinterestrates,intheeconomy? k. What are some economic conditions that affect the cost of money?
You do not need answer the question, you only need to write this 5-page paper, these are information.
Find an article from a reputable source about a company who did not use ethics, apply what you have learned in this course and provide an analysis. Dissect the situation described in the article and explain how their decisions in reporting affects others and what your take on it is. Would you have done the same thing if you were in the same position of the managers? Why or why not? What would the consequences be of either decision you made? If it’s your company on the line vs. ethics, which would you choose? Why?
For the project paper, students will write a minimum of five pages on social and ethical responsibility in financial reporting. Note: each page reduction in length will result in one full letter grade deduction.
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