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Corporate Finance Group D

Topic outline

  • Week 4

    • Session 7 - Sources of Capital: Equity or Debt Financing

    • resource icon
      File
      Class Presentation & Recording File

      Dear Students, 
      Lesson 7 is available for your study in PDF and here in Video.
      Kind Regards,
      Prof. Belkis M Reyes-Fernandez

    • folder icon
      Folder
      Readings Folder

      Lesson 7 PDF Version 

      Ross, S. et al. (2019). Essentials of Corporate Finance (10th ed.) McGraw-Hill Education. Ch.8 and Ch.15 

      Brealey, R., Myers, S., Allen, F. (2019). Principles of Corporate Finance (13th ed.).McGraw-Hill Education. Ch. 3, Ch. 4, and Ch. 9 

    • Engagement Activity

    • assign icon
      Assignment
      Activity 7 - Individual Work: Business Value Assignment

      Find and analyze recent news and articles about any of the following topics: 

      1. the bond and stock market
      2. pricing of the business and business valuation  

       For Example:

      • Bond and Stock Market News: The NYT article about bonds tells investors that interest rates will rise, and to be cautious about inflation https://www.nytimes.com/2021/02/23/upshot/biden-bonds-market-inflation.html or
      • Pricing (price per share) and business value of TESLA: https://finance.yahoo.com/quote/tsla/key-statistics/   says that the value of the business shares is US $728 per share @Sept 2021 and 760 billion US dollars business value. According to https://markets.businessinsider.com/news/stocks/tesla-valuation-trillion-stock-price-china-demand-giga3-market-capitalization-2021-3, The future value of TESLA is expected to be 1 Trillion US dollars by the end 2021 due to increase in demand in China.

       

      Provide the link, and present a summary of your findings including the financial impact for the business or for businesses in a short briefing VLE – 1 paragraph



    • Session 8 - Risk and Return

    • resource icon
      File
      Class Presentation & Recording File

      Dear Students, 
      Lesson 8 is available here for your study.
      Kind Regards,
      Prof. Belkis M Reyes-Fernandez

    • folder icon
      Folder
      Readings Folder

      PDF Version Lesson 8

      Ross, S. et al. (2019). Essentials of Corporate Finance (10th ed.) McGraw-Hill Education. Ch.10, Ch.11  and Ch.12 

      Brealey, R., Myers, S., Allen, F. (2019). Principles of Corporate Finance (13th ed.). McGraw-Hill Education. Ch. 7  

    • page icon
      Page
      Links to Resources Page

    • Engagement Activity

    • assign icon
      Assignment
      Activity 8 - Direct Question and Response: Risk and Return Assignment

      Look up in sources that provides reliable information and look for your favorite company's beta, and explain the chosen company's risk based in the findings.

      Prepare to answer to the questions: 

      1. name of the business
      2. The business most recent beta value - do not forget to share the source of information,  
      3. If the beta is high, low or negative and 
      4. Explain the rationale                                                                                                                                                                         
      • If you want to go and extra mile, compare the findings with the major competitor, and provide some conclusions. For example TESLA, 1.96 according to yahoo. Finance. TESLA will theoretically see its stock price increase by 1.96% for every 1% increase in the market. Put differently, if an investor is expecting the overall market to return 8%, a business like TESLA with a highly volatile beta of 1.96 should return 15.68% the investor. TESLA's competitors are other carmakers active in the EV space, so I decided to look up for Honda which has a beta of 0.80 so is less volatile.

      Hint: Beta is a measure of risk commonly used to compare the volatility of stocks to that of the overall market. Securities with betas below 1 have historically been less volatile than the market. 


      Upload the work in VLE