QUESTION

week 1

## Financial Management (graded) |

Much of the analysis done by financial managers is based on numbers that are different from what would seem to be the corresponding numbers presented in the financial statements. This difference is not due to any kind of cooking the books or other attempts to mislead anyone. One example is the use of market value rather than historical cost in the valuation of assets. For your first post, define financial management. What are some other examples of the differences between financial management and financial accounting? Give examples.

For your next post, explain the DuPont identity. How is it used in finance? Locate the financial statements for two firms in the same industry. Calculate all four terms of the DuPont identity, and present the results but do not analyze them.

For an additional post, analyze the results that another student has posted. If you were the appropriate financial manager of one of the firms that you analyzed, what would be your observations and recommendations?

week 2

## Capital Budgeting (graded) |

Our textbook and lesson discuss some considerations that should be taken into account when doing capital budgeting. Incremental earnings, interest expenses, taxes, opportunity costs, externalities, sunk costs, cannibalization or erosion, depreciation, and salvage value; as well as others. For your first posting, explain in detail what defines capital budgeting. Then, explain how two of these considerations above affect capital budgeting.

For your second posting, describe a potential capital expenditure project from the industry in which you now work or an industry in which you are interested. What is the project? Describe and provide an approximate value of the initial cash flow. Describe and provide an approximate value of the annual cash flow. Provide an estimation of the life of the project, as well as the exit costs.

For your next posting, review the second posting of another student. Then, calculate the NPV and IRR of the project. Based on your workings and assumptions, indicate whether you would accept the project, explaining why.

week 3

## Stocks and Bonds (graded) |

What are Stocks and Bonds? Describe how you could estimate their values. If you are investing in the stock market, which would you invest in and why?

For your second post, select a stock in which you are interested. Calculate its per share value using the DDM or another method discussed in Chapter 9. Then, find the current market value of a share of the stock. Compare the two. Can you explain the similarity or difference?

For your next post, do some research, probably on the Web, and find some bonds with differing yields to maturity (YTM). How do you explain the difference? Both the lecture and the textbook discuss some factors that may lead to this difference.

week 4

## Calculating CAPM and WACC for a Real Firm (graded) |

Our discussion topic concerns the calculation of stock values using the Capital Asset Pricing Model (CAPM). Explain the CAPM model. The textbook provides a list of betas for a selection of stocks. Choose two firms from that list and discuss whether the betas are what you would expect. Be sure to explain why or why not. Calculate the returns based on the CAPM model. Be sure to state your assumptions.

For your second post, the Weighted Average Cost of Capital (WACC) for a firm can be calculated or found through research. Select two firms in the same industry. The industry may be that in which you currently work or it may be an industry in which you are interested. Calculate or find the WACC for the two firms. How do the WACCs compare? Are the WACCs what you would expect? What causes the differences between the two firms' WACCs?

For your next post, review the findings of another student. Explain in detail why the CAPM or the WACC for these firms differ from each other. If you were the Stock Analyst, what would be your recommendations?

week 5

Capital Budgeting (graded) |

Our textbook and lesson discuss some considerations that should be taken into account when doing capital budgeting. Incremental earnings, interest expenses, taxes, opportunity costs, externalities, sunk costs, cannibalization or erosion, depreciation, and salvage value; as well as others. For your first posting, explain in detail what defines capital budgeting. Then, explain how two of these considerations above affect capital budgeting.

For your second posting, describe a potential capital expenditure project from the industry in which you now work or an industry in which you are interested. What is the project? Describe and provide an approximate value of the initial cash flow. Describe and provide an approximate value of the annual cash flow. Provide an estimation of the life of the project, as well as the exit costs.

For your next posting, review the second posting of another student. Then, calculate the NPV and IRR of the project. Based on your workings and assumptions, indicate whether you would accept the project, explaining why.

week 6

Stocks and Bonds (graded) |

What are Stocks and Bonds? Describe how you could estimate their values. If you are investing in the stock market, which would you invest in and why?

For your second post, select a stock in which you are interested. Calculate its per share value using the DDM or another method discussed in Chapter 9. Then, find the current market value of a share of the stock. Compare the two. Can you explain the similarity or difference?

For your next post, do some research, probably on the Web, and find some bonds with differing yields to maturity (YTM). How do you explain the difference? Both the lesson and the textbook discuss some factors that may lead to this difference.

week 7

Working Capital Management (graded) |

Do some research on two firms in your industry or an industry in which you are interested. Can you get an idea of their working capital management policies from publicly available information? How do the two companies differ in their apparent working capital management policies? Which policy do you think is better and why?

For your second post, consider the company you work for or a company in which you are interested. Also, do some research to find some current cost estimates for various means of financing working capital. What would be your recommendation to the company for financing its working capital needs? If the information is publicly available, or if you have access to it and have permission to discuss it, how does your recommendation compare what the firm is actually doing?

For your next post, explain the cash conversion cycle (CCC). Describe the CCC for your employer or company in an industry in which you're interested. What are some specific things that your company could do to decrease your cash conversion cycle? Let's be sure to describe, in pretty specific terms, the CCC for our company and what could be done to shorten it.

TUTORIAL PREVIEW

FIN515 all week discussion - july 2016

Dated: 11th Nov'17 10:05 PM

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