Order ID | 53563633773 |
Type | Essay |
Writer Level | Masters |
Style | APA |
Sources/References | 4 |
Perfect Number of Pages to Order | 5-10 Pages |
Interest Rates and Stock Valuation
Interest, Rates, Stock, Valuation
Part 1: Interest Rates
Many managers do not understand the various ways that interest rates can affect
business decisions. For example, if your company decided to build a plant with a 30-
year life and short-term debt financing (renewed annually), the cost of the plant could
skyrocket if interest rates were to return to their previous highs of 12% to 14%.
On the other hand, locking into high, long-term rates could be very costly also with a
long period when low short-term interest rates were to be available. As you can see, the
ability to know your economic environment and its impact on projected interest rates
can be crucial to making good financing decisions.
Describe two to three macroeconomic factors that influence interest rates in general.
Explain the effects of each factor on interest rates.
Now think about the industry in which you are employed or one in which you have past
experience. To what macroeconomic factors is your industry most sensitive?
Describe two contemporary factors that seem to be impacting your industry today, and
identify their impacts on the interest rates experienced within your chosen industry.
Support your comments with your own experiences, the weekly resources, and/or
additional research. Use APA throughout and provide appropriate in-text citations and
references.
Part 2: Stock Valuation, Risk and Returns
Stock valuation
Dividend Discount Model Stock Valuation
How to value a company using discounted cash flow (DCF)
Stock Valuation and Investment Decisions
The links above contain information on stock valuation, risk, and returns. Please review
each one of them. Based on the knowledge gained from the materials presented in the
links above, complete the following activities:
Present a detailed discussion of what you learned about stock valuation. Provide
examples of how your company has used the concepts. Do you believe financing a
company's operation using stock is better than financing with bonds? Why or why not?
Support your discussion with a numerical example.
Based on the materials presented in the “Risk and Return” video, present a discussion
on why the materials are important in financial decision making. How would you
incorporate risk and return in your financing decisions?
1. Post your initial response to later than Sunday, December 1
2. Read and respond to your classmates. Respond to at least 3 of your classmates’
posts. Below are additional suggestions on how to respond to your classmates’
discussions:
· Ask a probing question, substantiated with additional background information,
evidence or research.
· Share an insight from having read your colleagues’ postings, synthesizing the
information to provide new perspectives.
· Offer and support an alternative perspective using readings from the classroom or
from your own research.
· Validate an idea with your own experience and additional research.
· Make a suggestion based on additional evidence drawn from readings or after
synthesizing multiple postings.
· Expand on your colleagues’ postings by providing additional insights or contrasting
perspectives based on readings and evidence.
Need one main post of 300 minimum words and 3 responses of each 150 words
minimum
with Total (300 words main + 200 words minimum + 200 words minimum + 200 words
minimum) = 900 words
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