This is an open forum where the students can ask questions to their professors or clarify doubts about the contents or organization of the course.
Dear Student,
Please take a few minutes of your time to evaluate the course/module you are about to complete. Your feedback is invaluable to help us improve your educational experience. Most of the questions require you to rate your satisfaction with various aspects related to the main two categories:
- Course/module delivery
- Lecturer performance
The survey is anonymous, and it shouldn't take more than 5 minutes to complete it.
Thank you!
Dear students,
Welcome you all to the fascinating world of Business Finance thru the Corporate Finance course.
I sincerely hope that you will enjoy the lessons, and have great learning experience with the course and in our school GBSB Global Business School.
Attached my personal video HERE to welcome you all to the Corporate Finance course
Looking forward to see you in the live sessions, and throughout the VLE dashboard.
Best,
Prof. Belkis M. Reyes Fernandez
Lesson PDF
Ross, S. et al. (2019). Essentials of Corporate Finance (10th ed.) McGraw-Hill Education. Ch.1
Brealey, R., Myers, S., Allen, F. (2019). Principles of Corporate Finance (13th ed.). McGraw-Hill Education. Ch. 1
Other relevant articles:
The new finance manager:
The agency problem:
Independent Study and Reading: The Agency Problem- Enron Case
Read the following articles other relevant news and articles to illustrate the case, and discuss to the board class the type of conflict existed between the company’s’ management and the stockholders, and what specific actions and initiatives could have prevented the bankruptcy. You may use this as reference but must research
http://www.buffalo.edu/news/releases/2002/01/5523.html
https://www.britannica.com/event/Enron-scandal
Present the findings in a short briefing VLE – 200 words
Uploaded VLEDUE DATE: 5th Oct CEST
The Suez Canal Crisis, and the role of the Finance Manager of the Insurance Industry.
The activity requires research about the Suez Canal blockage crisis, and critically analyze the challenges that finance managers of the insurance industry faced for the efficient execution of the corporate finance activities and main responsibilities discussed in lesson 1. Consider analyzing the impact in the business working capital (use of cash), financing (need for short-term loans to pay affected parties like the Suez Canal Authority), and investing activities (delay real estate purchases of new buildings) or the dividend decision (not paying dividends) due to the blockage. Provide possible solutions and strategies to mitigate those risks. Attached relevant articles and material to enhance your research.
Students should start with the idea that the price of the stock (revenues) will be impacted in the short-medium term, especially the revenues from insurance company of the blocked ship – The UK P&I Club, and other major insurance businesses like Allianz.
Prepare a short 150-word Arial 12 report and submit in VLE Due Date 9 Oct 11.59 CEST
Ross, S. et al. (2019). Essentials of Corporate Finance (10th ed.) McGraw-Hill Education. Ch.2
Case Studies:
Choose a public corporation of your preference (example AMAZON.Com, Inc.) and research in the internet recent news and periodical articles to learn of any information that would be helpful in understanding the company's financial condition as well as plans.
Summarize your findings and conclusions based on the research.
Prepare to answer if the business is in good or bad financial condition, and explaining your rationale.
Present the findings in a short briefing VLE – 1 paragraph Due Date Oct 9, 2023 23.59 CEST
Dear Students,
I sincerely hope you are enjoying the course. Here the Video Lesson and PDF for your study.
Core Book Ch 3
Dear Students,
Attached an interesting article from HArvard Business Review to complement your learning
https://online.hbs.edu/blog/post/financial-decision-making
Enclosed the class activity to enhance your learning.
Research in the internet for articles and news regarding the topic: businesses liquidity challenges due to Covid-19 pandemic, and understand the action plan the have to undertake to overcome the crisis like for example: https://fortune.com/2021/01/11/carnival-cruises-covid-19-losses-q4-earnings/
Present your findings in the Discursion Board: Present the sources and a summary of your findings in a short briefing VLE – 1 paragraph.
I am sharing Volkswagen Group and Alibaba Financial Ratios for your analysis and enhancing the learning experience:
https://www.macrotrends.net/stocks/charts/VWAGY/volkswagen-ag/financial-ratios
Find a teammate.
Practice by computing all the financial ratios studied in class by selecting a publicly traded business of the team's preference.
Look at the most recently annual report and compute the ratios for practice.
Present the results and group analysis individually in VLE.
https://businessleadershiptoday.com/what-is-a-sustainable-business-strategy/#:~:text=A%20sustainable%20business%20strategy%20is,of%20conserving%20and%20protecting%20resources.
Get together to work in groups of two, and do some research about AMAZON.COM, INC long term strategy in financial planning, and their sustainable growth success case.
Prepare to address the case by critically answer by analyzing their business success - Please relate the findings only to the topics and themes covered in Lesson 5. For example:
News: https://www.forbes.com/sites/greatspeculations/2021/08/13/amazons-stock-to-rise-as[1]growth-continues/?sh=268b29de4788
Understand where the funding comes, and how sustainable the business growth has been. Present the article/news and a summary of your findings in a short briefing VLE – 1 paragraph
Here Video Lesson 6
Ross, S. et al. (2019). Essentials of Corporate Finance (10th ed.) McGraw-Hill Education. Ch.4 p.87-105 and p.120- 121 Brealey, R., Myers, S., Allen, F. (2019).
Principles of Corporate Finance (13th ed.). McGraw-Hill Education. Ch. 2 p.20-28
There are few capital budgeting or investment decisions cases in the lesson that required using the topics covered in the lesson, and most of them include the decisions from the CFO point of view.
Please review them and compute them based in the information provided. Show calculations and rationale in VLE for credit in a short and brief statement
1. The business you invest 
100,000 in a bank account that pays interest of r=7% a year. Compute the value of the business investment in Y1 and Y2
2. As a CFO, your business you want to know how much the business have to invest today in a bank account that pays interest of r=7% a year to receive 
114,490 at the end of the second year (the present value (PV) of the 114,490 payoff?)
3. Company A Ltd wanted to know their net present value of cash flow if they invest $100,000 today, their initial investment in the project is $80,000 for the 3 years of time, and they are expecting the rate of return is 10 % yearly. Calculate the NPV using the formula NPV = Cash Flows /(1+ r)t – Initial Investment
4. Present Value of an investment opportunity:
NapoPizza Ltd is contemplating construction of a warehouse. The total cost of buying the land and constructing the facility is 370,000, and according to your real estate advisor, and due to warehouse space demand for that year, NapoPizza Ltd owners will be able to sell the fully built warehouse for 420,000 in one year. The rate of interest on EU r* =5% per year (discount rate or opportunity cost of capital). Compute the present value or market price of the warehouse, and if the business should invest in the project. Investors believe the warehouse project is as risky as investment in the stock market and that stocks offer a 12% expected return (12% is the opportunity cost of capital – they are giving up by investing in the warehouse and not investing in equally risky securities (tip recalculating NPV with r = 12%)
5. Nico Rey is trying to sell an office building in Florida, and yesterday Many Fer offered $10,000 for the property. He was about ready to accept the offer when Benny Bo offered him $11,424. However, the second offer was to be paid a year from now. Which offer should Nico choose? The bank’s insured rate for deposits is 12%. Option 1 $10,000 from Manny Fer Option 2 $11,414 from Benny Bo.
6. The ABC Kitchen Company is contemplating investing €1 million in four new stores in Boston. Carol R, the firm’s chief financial officer (CFO), has estimated that the investments will pay out cash flows of € 200,000 per year for nine years and zero thereafter - The cash flows will occur at the end of each year and there will be no cash flow after year 9 – Mrs. R has determined that the prudent and appropriate discount rate for this investment is 15% - this is the rate of return that the firm can earn at comparable projects. Should the ABC Kitchen Company make the investments in the new stores?
Formative Assessment: Group Report
This is a group assessment - teams of 2-3 students. The group will be preparing partial deliveries of the summative assessment 2 by selecting of a Large-Cap publicly traded Global Corporation of the group interest.
Formative Submission Deliverable 1: Submission of the group report to receive feedback in the criteria’s 1 and criteria 2. OMIT sections a and b (will be covered later in the course)
1. Executive summary of the report and introduction to the company
2. Using the business annual report, critically assess the business financial performance by comparing the last two financial years. It would be beneficial for the research if the group discusses some of the recent events that shaped the business financial situation.
Prepare a 150-word report - Way of submission individually in VLE
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. 9Find and analyze recent news and articles about any of the following topics:
For Example:
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
Dear Students,
Lesson 8 is available here for your study.
Kind Regards,
Prof. Belkis M Reyes-Fernandez
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. 7Look 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:
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
Dear Students,
Lesson 9 in PDF format to download and the link for the lesson. here
Practical Session:
This is an individual activity, and short answer format is expected.
Answer the following questions:
1. Explain the relevance of capital budgeting is important for business?
2. What is the net present value rule? Analyse the statement for a business: “A particular investment has an NPV of $1,000”, what does that mean?
3. A business is anticipating the following Cash Flows and uses the NPV decision rule
The initial investment in a building $34,000
Y1 Rent $16,000
Y2 Rent $18,000
Y3 Rent $15,000
At a required return RRR of 11%, should the firm accept this project? and RRR 30%? Justify your answers.
Answer to be uploaded in VLE in the Due Date Nov 5th, 2023 11.59 CEST
Dear Students, we are in the middle of the course, and I sincerely hope you are enjoying it.
Here the video session.
Attached lesson 10 in PDF.
Brealey, R., Myers, S., Allen, F. (2019). Principles of Corporate Finance (13th ed.). McGraw-Hill Education. Ch. 10
Based in the following reading and the information available on the internet:
https://bohatala.com/coca-cola-company-capital-budgeting-process-and-procedures/
Discuss The Coca-Cola Company (KO) budgeting process and procedures, and capital decision-making process.
Present your findings in a short essay in VLE (max 2 paragraphs)
Case Study: TikTok capital budgeting decisions
Research about TikTok Capital budgeting decision and as a reference, you can use this HBR article and any other article of your preference to identify the business capital budgeting decisions and how those decisions impacted in the business success. Prepare a short 150-word report and submit it individually in VLE.
Please in your work the challenges faced during the growth period like for example, the
“$900 million to acquire Musical.ly, a social video app based in Shanghai with more than 200 million users worldwide and a large following in the U.S “aligned with the business strategy of being a global business”.
https://hbr.org/2019/09/the-strategy-behind-tiktoks-global-rise
Dear students, I hope all is well.
Here the Video Session
Attached a HBR Article for your reading.
https://moiglobal.com/why-we-invest-in-eastern-europe-201810/
Research on the internet to discuss COCA-COLA CO Coca-Cola Co.KO (U.S.: NYSE)
Present your findings in a two short paragraph only essay.
You are welcome to use this article as a reference:
https://bohatala.com/coca-cola-company-capital-budgeting-process-and-procedures/
Upload your work individually in VLE.
Case Study: Netflix Debt Funding - Individual Work
Introduction:
“Since 2011, Netflix has raised roughly $15 billion in debt (mostly by issuing junk bonds) to help fund its content production around the world. That led a group of analysts, reporters, and investors to question whether or not its business model was sustainable long term—especially as streaming competition increased.” (qz.com). Netflix is selling $1 billion of five-year non-callable junk bonds, with half denominated in dollars and half in euros. In its bond-offering announcement, Netflix says it may use the net funds it gains for "content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions."
You are to prepare a 150-word report discussing the concept of Junk bonds in terms of their quality and the pricing, provide a few businesses that issue and sell junk bonds, and critically explain how a business-like Netflix finds investors to purchase their junk bonds.
Students are welcome to refer to this article or any other relevant to the topic article or reading available on the internet.
Submitted in VLE on the due date.
Dear students, here the lesson in video and PDF for your study.
Hoping that you are enjoying the course.
Best regards,
Ross, S. et al. (2019). Essentials of Corporate Finance (10th ed.) McGraw-Hill Education. Ch.13 p.417-426 Brealey, R., Myers, S., Allen, F. (2019). Principles of Corporate Finance (13th ed.). McGraw-Hill Education. Ch. 9 p.217-223
Case Alessia's Kitchen & Co:
Alessia’s Kitchen & Co.is a publicly traded business that has 1.4 million shares of stock outstanding that sells for $20 / share. The firm’s debt is publicly traded and was recently quoted at 93 % price. It has a total face value of $5 million, and it is currently priced to yield 11%. The risk-free rate is 8%, and the market risk premium is 7%. Finance department estimated the business beta of 0.74, and a tax bracket of 34%.
Compute the WACC of the business assuming that the corporate tax rate is 34%.
Calculations and results to be uploaded in VLE.
This is an individual activity to be uploaded in VLE.
Dear Students,
At this point you must have your company approved for this project and your team all set up.
This is the second Formative Submission of the Group working towards the Summative 2. The group must submit criteria 5 of the summative assessment group report to receive feedback.
The group must prepare a 150-word report and submit individually in VLE.
Dear Students, I hope you are enjoying the course.
Here the video lesson for the week and the PDF for your study
Ross, S. et al. (2019). Essentials of Corporate Finance (10th ed.) McGraw-Hill Education. Ch.16
Here a recent high-level study of the WACC trends and opinion by KPMG
Team up with a partner and look up on the internet the WACC of a USA publicly traded business (except Apple and Amazon) like for example Starbucks Corporation (NASDAQ: SBUX).
Prepare to explain in a 150-word report addressing the following in an essay form:
1. If the business is using more equity or debt financing
2. Describe two situations that could affect the selected business capital structure like for example the benefit of financing thru equity rather than bond issuance.
To be uploaded individually on the VLE.
Ross, S. et al. (2019). Essentials of Corporate Finance (10th ed.) McGraw-Hill Education. Ch.15 and here an interest article about TELEFONICA 2023 dividends for your reading.
I sincerely hope you enjoy it.
Research on the internet the dividend policy of a public business of your preference within the financial services industry and present in a short report 1 paragraph with the following findings:
To be uploaded in VLE
Case Study: 2023 Dividend outlook.
Look up for one article on the internet from a reliable and reputable source that addresses the following topic: Dividend outlook for 2023.
Prepare a 150-word brief addressing the main ideas related to the topic in an essay format to be uploaded in VLE.
Here a reference article to guide your search.
Dear Students,
The video lesson 15 for your study is available Here
Ross, S. et al. (2019). Essentials of Corporate Finance (10th ed.) McGraw-Hill Education. Ch.19 & Ch. 16
Brealey, R., Myers, S., Allen, F. (2019). Principles of Corporate Finance (13th ed.). McGraw-Hill Education. Ch. 16
Research the business in all available resources like yahoo finance, and find the latest price of the stock: BRK-A.
Critically analyze the strategy behind the pricing and the strategy for not splitting the stock.
Discursion Board: Present the findings in VLE in a short briefing - 1 paragraph
Group Report Formative Submission Deliverable 3:
Partial submission of the group report to receive feedback in the Evaluation
Criteria 6 and Prepare a short 150-word report and submit in VLE
Ross, S. et al. (2019). Essentials of Corporate Finance (10th ed.) McGraw-Hill Education. Ch.26 p.804-820 Brealey, R., Myers, S., Allen, F. (2019). Principles of Corporate Finance (13th ed.)
Research Zara’s inventory management and the reason for success
Attached one HBR article only for reference
https://digital.hbs.edu/platform-digit/submission/zara-achieving-the-fast-in-fast-fashion-through-analytics/
Present the findings in VLE in a short 150 word briefing
Ross, S. et al. (2019). Essentials of Corporate Finance (10th ed.) McGrawHill Education. Ch.31
Brealey, R., Myers, S., Allen, F. (2019). Principles of Corporate Finance (13th ed.). McGraw-Hill Education. Ch. 27
Select a country of your preference (preferable your own country).
Research and analyze:
Discursion Board - Present the findings in a short 2 paragraph in VLE.
The work required another partial submission of the group report to receive feedback in the Evaluation Criteria 3 of summative assessment 2 and prepare a short 150-word report and submit in VLE.
Dear Students,
It's have been an amazing journey working for you. I sincerely hope you enjoy this challenging course, and you became better financial decision makers. I wish you success in your endeavors and in the summative assessments.
Attached the PDF and here the final video session.
All covered chapters in previous lessons, and some extra articles to enhanced your learning and knowledge:
1) https://sfmagazine.com/post-entry/july-2020-the-modern-cfo-adapting-to-a-time-of-crisis
2) http://www.buffalo.edu/news/releases/2002/01/5523.html
3) https://www.britannica.com/event/Enron-scandal
4) https://www.insurancebusinessmag.com/ca/news/marine/multiple-insurance-lines-impacted-by-ever-givens-suez-canal-blockage-252203.aspx
5) https://www.forbes.com/sites/edwardsegal/2021/03/31/impact-of-suez-canal-crisis-on-companies-around-the-world-could-last-weeks/?sh=5f99499042d8
6) https://www.business-standard.com/article/international/insurance-companies-on-hook-for-millions-tied-to-suez-canal-crisis-121032900010_1.html
7) https://www.reuters.com/article/us-egypt-suezcanal-ship-insurance-idUSKBN2BG31A https://hbr.org/2016/07/where-financial-reporting-still-falls-short
8) https://www.insurancejournal.com/news/international/2021/05/10/613337.htm
9) https://hbr.org/2020/04/managing-the-liquidity-crisis
10) https://hbr.org/2019/09/the-strategy-behind-tiktoks-global-rise
11) https://hbr.org/1982/01/does-the-capital-asset-pricing-model-work
12) https://financialmodelingprep.com/weighted-average-cost-of-capital/DIS
13) https://www.spglobal.com/platts/en/market-insights/latest-news/oil/040121-aramco-may-slash-dividend-payment-to-boost-saudi-economic-growth-plan
14) https://www.cnbc.com/2021/08/23/shareholder-payouts-to-hit-1point4-trillion-in-2021-nearing-pre-pandemic-levels.html
15) https://www.forbes.com/advisor/investing/coronavirus-covid-dividend-investing/
16) https://www.ft.com/content/2719966c-b228-4300-bdc0-dcbe2f7050fd
17) https://hbswk.hbs.edu/item/cruising-in-crisis-how-carnival-is-riding-out-the-covid-19-storm
Please select one Topic of your preference (covered in the course) and explain the use for Financial Managers to create value for the business.
VLE submission in 2 paragraphs
Guidelines: This is an individual summative assessment.
Follow the guidelines and criteria of the assignment, make sure your writing is precise and to the point, and that all sources are adequately referenced.
You are requested to choose One Large-Cap publicly traded Multinational Corporation (MNC) of your own interest and submit a comprehensive case study. Each student must have the instructor’s approval of the business (via email) before starting the assessment.
The case study should consist of about 1,500 +/-10% words, excluding figures and tables, appendices and references covering the following:
Evaluation Criteria – Rubric
1. Executive summary of the report and introduction to the company (5 points)
2. Use the tool of your preference: financial statement analysis, financial ratio analysis or industry analysis to critically assess the business financial performance by comparing the last two financial years (10 points).
3. Evaluate the selected corporation’s current capital structure (5 points). In your opinion, what is the business /industry optimal capital structure? Please elaborate your answer (10 points). Critically evaluate the reasons for the difference between the industry / ideal capital structure, and provide an example related to your case study (10 points)
4. Critically identify the business most relevant capital budgeting decisions (consider the last 5 years), the chosen method of financing, and the valuation technique used (15 points). Critically explain the relevance of the capital investment decisions and their long-term strategy for sustainability. (15 points)
5. Case study findings and conclusions (15 points) 6. References and Bibliography (5 points)
Report structure:
• The report should display a coherent structure and should be prepared as a neatly typed Word document (Times New Roman 12 points), with double spacing and page numbering.
• Tables or work/data taken from other sources may be included in an appendix.
• All sources must be referenced in the text and a full bibliography must be provided (including visited websites). Paraphrasing or direct quotes taken from other sources must be clearly indicated with citations. No footnoting!
• Students are reminded that depth, relevance and variety are the crucial elements of quality research.
• Websites should only be used if they represent an established source and only for facts and figures. Students should make the most of academic and practitioner books and articles.
• Submission should be by the deadline below via VLE. Outline of the report:
• Cover page It includes the school and course names, the case study title, the student’s full names, the lecturer’s full name and the submission date.
• Table of contents It includes all the headings with appropriate page numbers, including References and Appendices and, where applicable, the list of tables and figures.
• Executive summary Including a brief description of the corporation (not included in word count), what the case is all about, and the summary of the major points and contributions of the report.
• Introduction It introduces the reader to the case you are going to discuss.
• Findings and analysis See under the Description of the Assignment
• Conclusions and recommendation They recap the main characteristics of the chosen company, draw key insights from the case study and suggest, where applicable and meaningful, future developments for the company’s business, organizational solutions, and decision-making processes.
Submission in VLE on the due date
Guidelines: This is a group summative assessment, and the report can be done in teams of 2-3 students. Follow the guidelines and criteria of the assignment, make sure the writing is precise and to the point, and that all sources are adequately referenced.
The group will prepare and submit a comprehensive 2000 +/- 10% report (excluding figures and tables, appendices and references) of a Large-Cap publicly traded Global Corporation of their interest (different from the assessment 1). Each team must have the instructor’s approval of the business (via email) before starting the report.
All parts listed below will be answered in an essay form based on the analysis of relevant background material and the firm’s sources available on the internet.
In addition, the group must prepare a recorded 30 min PPT or Video Presentation.
Evaluation Criteria – Rubric
1. Executive summary of the report and introduction to the company (5 points)
2. Using the business annual report, critically assess the business financial performance by comparing the last two financial years (5 points), and analyzing effect of major global events in the business performance using:
a. The cash management policies (working capital), and the short-term financial strategy implemented for business sustainability (5 points)
b. The inventory management policy (5 points)
3. Analyze the selected corporation’s current capital structure, and discuss the repercussion of relevant news, corporate actions, and other general information available on the internet in the company’s stock price in the last 5 years. (10 points)
4. Select and discuss the business most relevant capital budgeting decisions (5 points). Critically explain the impact of their capital investment decisions and the long-term strategy for sustainability. (10 points)
5. Analyze and discuss the business dividend policy (5 points); include an analysis of their common stockholder dividend payment (EPS, Dividend Yield) for the last 3 years (10 points), and the impact of the COVID-19 outbreak in their 2020 dividend payment. (10 points)
6. Critical thinking – hypothetical situation: You are the CFO of the corporation, and the business is considering entering or expanding (depending on the case) its presence in Turkey:
a. Explain the type’s risks inherent to the country and as a CFO provide specific recommendations as to how to mitigate those risks from operating in Turkey. (10 points)
b. The business is considering building a facility that will serve as a headquarters for the EMEA region. Critically analyse the factors the business has consider in international capital budgeting when the project is overseas. (5 points)
7. Report findings and conclusions – is the business in good financial standing: The corporate finance manager strategies and actions are adding value to the investor. Based in the findings, and the information publicly available in the internet, please answer: Would you recommend investing in the company stock? Explain the group rationale (10 points)
8. References and Bibliography (5 points)
Individual submission in VLE