IOWA FIN341 2020 JUNE All Weeks Discussions Latest

FIN341 Corporate Financial Management

Week 1 Discussion

DQ1 A financial ratio by itself tells us little about a company since financial ratios vary a great deal across industries. There are two basic methods for analyzing financial ratios for a company: time trend analysis and peer group analysis. Why might each of these analysis methods be useful? What does each tell you about the company’s financial health?

DQ2 What does liquidity measure? Explain the trade-off a firm faces between high liquidity and low liquidity levels.

 

FIN341 Corporate Financial Management

Week 2 Discussion

DQ1 List the three assumptions that lie behind the Modigliani-Miller theory in a world without taxes. Are these assumptions reasonable in the real world? Explain.

DQ2 Is there an easily identifiable debt–equity ratio that will maximize the value of a firm? Why or why not?

 

FIN341 Corporate Financial Management

Week 3 Discussion

DQ1 What is the difference between bank loans and commercial paper? Are there specific situations when companies should resort to using commercial paper?

DQ2 Loftis Manufacturing, Inc., has recently installed a just-in-time (JIT) inventory system. Describe the effect this is likely to have on the company’s carrying costs, shortage costs, and operating cycle.

 

FIN341 Corporate Financial Management

Week 4 Discussion

DQ1 Give an example of a personal finance experience you have had which involved the concept of the time value of money. What have you learned?

DQ2 How can a corporation best take advantage of the concept of the time value of money?

 

 

 

 

 

FIN341 Corporate Financial Management

Week 5 Discussion

DQ1 The required rate of return in valuing an asset is based on the risk involved. Identify two types of risk that affect investments and briefly describe them.

DQ2 Why does the value of a share of stock depend on dividends?

A substantial percentage of the companies listed on the NYSE and the NASDAQ don’t pay dividends, but investors are nonetheless willing to buy shares in them. How is this possible given your answer to the previous question?

Referring to the previous questions, under what circumstances might a company choose not to pay dividends?

 

FIN341 Corporate Financial Management

Week 6 Discussion

DQ1 Should a company use its cash flow or its earnings as a basis for capital budgeting decisions? Explain.

DQ2 How does technological change influence the planning for capital spending decisions?

 

FIN341 Corporate Financial Management

Week 7 Discussion

DQ1 How does the stockholder, in general, feel about the relevance of dividends?

DQ2 What are the basic advantages to the corporation of issuing convertible securities?

 

FIN341 Corporate Financial Management

Week 8 Discussion

DQ1 What is the most likely explanation for the use of preferred stock from a corporate viewpoint?

DQ2 Explain the difference between a call option and a put option. Would you use options in your personal investment portfolio?