Respond to three questions and solve five computational problems related to stocks.

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Respond to three questions and solve five computational problems related to stocks.

Companies can raise money through common stocks. Investors buy stocks and get the benefits of ownership of a firm. How to price stocks is the main objective of this assessment, in which you will learn about the differences between common and preferred stocks, the different stock valuation models, and the major stock market indexes.

Overview

Respond to three questions and solve five computational problems related to stocks.

Companies can raise money through common stocks. Investors buy stocks and get the benefits of ownership of a firm. How to price stocks is the main objective of this assessment, in which you will learn about the differences between common and preferred stocks, the different stock valuation models, and the major stock market indexes.

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

· Competency 1: Evaluate the global financial environment.

. Calculate how much money is needed to buy a specific amount of stock.

. Describe the advantages of stock ownership.

· Competency 2: Define finance terminology and its application within the business environment.

. Calculate the price of a share of stock using a stock’s earnings per share and P/E ratio.

. Calculate the value of a share of stock with constant growth.

. Calculate the value of a share of preferred stock.

. Explain the differences between key stock market measures.

. Calculate the percentage one-day return in the Dow Jones Industrial Average.

· Competency 3: Evaluate the financial health of an organization.

. Describe the rights of a shareholder.

Suggested Resources

The following optional resources are provided to support you in completing the assessment or to provide a helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom.

Library Resources

The following e-books or articles from the Capella University Library are linked directly in this course:

· Weaver, S. C., & Weston, J. F. (2001).  Finance and accounting for nonfinancial managers . New York, NY: McGraw-Hill.

· Sherman, E. H. (2011).  Finance and accounting for nonfinancial managers  (3rd ed.). New York, NY: American Management Association.

Course Library Guide

A Capella University library guide has been created specifically for your use in this course. You are encouraged to refer to the resources in the  BUS-FP3062 – Fundamentals of Finance Library Guide  to help direct your research.

Bookstore Resources

The resources listed below are relevant to the topics and assessments in this course and are not required. Unless noted otherwise, these materials are available for purchase from the  Capella University Bookstore . When searching the bookstore, be sure to look for the Course ID with the specific –FP (FlexPath) course designation.

· Cornett, M., Adair, T., & Nofsinger, J. (2016). M: Finance (3rd ed.). New York, NY: McGraw-Hill.

Instructions

Respond to the questions and complete the problems.

Questions

In a Word document, respond to the following. Number your responses 1–3.

1. Describe the rights and advantages belonging to shareholders

2. Explain the differences between the Standard and Poor’s 500 Index and the Dow Jones Industrial Average. Which is a better measure of stock market performance? Why?

3. Describe the differences between common stock and preferred stock.

Use references to support your responses as needed. Be sure to cite all references using correct APA style. Your responses should be free of grammar and spelling errors, demonstrating strong written communication skills.

Problems

In either a Word document or Excel spreadsheet, complete the following problems.

· You may solve the problems algebraically, or you may use a financial calculator or an Excel spreadsheet.

· If you choose to solve the problems algebraically, be sure to show your computations.

· If you use a financial calculator, show your input values.

· If you use an Excel spreadsheet, show your input values and formulas.

In addition to your solution to each computational problem, you must show the supporting work leading to your solution to receive credit for your answer.

Compute the following:

1. Imagine that on June 4, the Dow Jones Industrial Average closed at 13,598.14, which was up 148.86 points from the previous day’s close of 13,449.28. Calculate the return, in percent to four decimal places, of the stock market for June 4.

2. The cost per stock at a brokerage firm is $0.10. Calculate how much money you would need to buy 150 shares of HiTech, Inc., which trades at $18.22.

3. HiTech, Inc.’s growth for the future is forecasted to be a constant 10 percent. HiTech’s next dividend is expected to be $1.18. Calculate the value of HiTech stock when the required return is 12 percent.

4. Preferred stock from HiTech, Inc. pays $1.20 in annual dividend. Calculate the value of the stock if the required return on the preferred stock is 4.5 percent.

5. HiTech, Inc. has earnings per share of $1.82 and a P/E ratio of 31.54. Calculate the stock price.

What did you learn about organizations from watching this film?

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Watch the entire movie American Factory (Directed by Julia Reichert and Steven Bognar).  Provide proof that you acquired and watched the movie by providing me with a screen shot or photo of the movie at 30:00 minutes into the film, and at 1:30:00 into the film.

 

  • a 500-word (APA) paper responding to these prompts:
    1. In your own words, how would you describe the culture of the US-born workers employed to work in the Fuyao factory?
    2. How would you describe the culture of the Chinese-born workers and management who were brought to Ohio by the new owners to work in – and manage – the Fuyao factory?
    3. What are some of the issues that ensued as these two constituencies worked side-by-side in the new Dayton, OH factory?
    4. Consider at least one additional OB concept from this course, and discuss how it relates to the situation in this movie.
    5. What did you learn about organizations from watching this film?

Strategic Financial Management

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You have recently attended a workshop aimed at improving your understanding of company Annual Reports using Tesco’s report as an example.

During the workshop you looked at the following sections of Tesco’s annual report:

The Strategic Report including the Environmental and Social Review,

The Corporate Governance Report and,

The Group Statements of: ‘Income’ (also sometimes referred to as the Statement of Profit and Loss) ‘Balance Sheet’ and ‘Cash-Flows’.

You learned about how different ‘stakeholders’ may use the information contained in these reports and financial statements. You also learned about financial ratios and how these can be used to interpret and assess the performance of a business in terms of its profitability, liquidity, efficiency and return to investors.

The timing of the workshop was very fortuitous. You are the Purchasing Manager for the business you work for. You are in the process of letting a contract for the supply of an important component used in your business’s production. You have been provided with the financial statements of Benedict Co. who are one of a few companies tendering for the contract. The income statement and statement of financial position have been reproduced below.

As well as reviewing the financial statements of Benedict Co. from a potential customer perspective, you are interested in how the company may be viewed by potential investors, lenders and suppliers.

You have also collected the following information about other companies operating in the same sector as Benedict Co.:

Current ratio: 1.6

Quick ratio: 1.0

Trade receivable days: 55 days

Inventory days: 60 days

Trade payable days: 90 days

Dividends of $4.5 million were paid in 20X1 and $3.6 million in 20X0. Shares in Benedict Co. had a market value of $5.60 at 31 January 20X1 compared to $3.60 in 20X0. Benedict Co. has issued 18 million $1 shares.

Required:

Prepare a report for your manager which:

1) Using the Annual Report of Tesco available at the following link:

https://www.tescoplc.com/media/264194/annual-report-2016.pdf

a) Explains the term ‘stakeholder’ and identifies three types of stakeholder of Tesco. (15%)

b) Analyses how the Environmental and Social Review and the Corporate Governance Report help Tesco demonstrate its performance in terms of its corporate and social responsibilities to two of the stakeholders identified in a) above.

(35%)

2) Analyses and evaluates the financial position of Benedict Co. using a range of financial ratios to meet the requirements of potential customers, investors, lenders and suppliers. Your analysis should:

a) Explain the purpose and relevance of the chosen ratios.

b) Include the results for each chosen ratio and reasons for the movement between the two years.

c) Highlight any aspects of the performance of Benedict Co. which would give cause for concern.

d) Critically evaluate the application of financial ratios in interpreting and measuring the performance of a company.

All calculations should be shown in full as an appendix to the report.

(40%)

Marks are available for the presentation of your report including structure, style and the presentation of referencing.

(10%)

Total 100%

You have recently attended a workshop aimed at improving your understanding of company Annual Reports using Tesco’s report as an example.

During the workshop you looked at the following sections of Tesco’s annual report:

The Strategic Report including the Environmental and Social Review,

The Corporate Governance Report and,

The Group Statements of: ‘Income’ (also sometimes referred to as the Statement of Profit and Loss) ‘Balance Sheet’ and ‘Cash-Flows’.

You learned about how different ‘stakeholders’ may use the information contained in these reports and financial statements. You also learned about financial ratios and how these can be used to interpret and assess the performance of a business in terms of its profitability, liquidity, efficiency and return to investors.

The timing of the workshop was very fortuitous. You are the Purchasing Manager for the business you work for. You are in the process of letting a contract for the supply of an important component used in your business’s production. You have been provided with the financial statements of Benedict Co. who are one of a few companies tendering for the contract. The income statement and statement of financial position have been reproduced below.

As well as reviewing the financial statements of Benedict Co. from a potential customer perspective, you are interested in how the company may be viewed by potential investors, lenders and suppliers.

You have also collected the following information about other companies operating in the same sector as Benedict Co.:

Current ratio: 1.6

Quick ratio: 1.0

Trade receivable days: 55 days

Inventory days: 60 days

Trade payable days: 90 days

Dividends of $4.5 million were paid in 20X1 and $3.6 million in 20X0. Shares in Benedict Co. had a market value of $5.60 at 31 January 20X1 compared to $3.60 in 20X0. Benedict Co. has issued 18 million $1 shares.

Required:

Prepare a report for your manager which:

1) Using the Annual Report of Tesco available at the following link:

https://www.tescoplc.com/media/264194/annual-report-2016.pdf

a) Explains the term ‘stakeholder’ and identifies three types of stakeholder of Tesco. (15%)

b) Analyses how the Environmental and Social Review and the Corporate Governance Report help Tesco demonstrate its performance in terms of its corporate and social responsibilities to two of the stakeholders identified in a) above.

(35%)

2) Analyses and evaluates the financial position of Benedict Co. using a range of financial ratios to meet the requirements of potential customers, investors, lenders and suppliers. Your analysis should:

a) Explain the purpose and relevance of the chosen ratios.

b) Include the results for each chosen ratio and reasons for the movement between the two years.

c) Highlight any aspects of the performance of Benedict Co. which would give cause for concern.

d) Critically evaluate the application of financial ratios in interpreting and measuring the performance of a company.

All calculations should be shown in full as an appendix to the report.

(40%)

Marks are available for the presentation of your report including structure, style and the presentation of referencing.

(10%)

Total 100%

Assessment guidance

Your report should be word processed, clearly laid out and concise and should be supported by appropriate workings for the numerical elements. The word limit for the report is 3,000 words.

The text of this assignment must be in your own words (not even a sentence or phrase should be taken from another source unless this source is referenced and the phrase placed in quotes). Referencing should in accordance with the Harvard System.

Assessment guidance

Your report should be word processed, clearly laid out and concise and should be supported by appropriate workings for the numerical elements. The word limit for the report is 3,000 words.

The text of this assignment must be in your own words (not even a sentence or phrase should be taken from another source unless this source is referenced and the phrase placed in quotes). Referencing should in accordance with the Harvard System.

Prepare a 7-page demand management plan, including a forecasting, inventory management, and scheduling analysis, as well as recommendations, for provided scenario.

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Prepare a 7-page demand management plan, including a forecasting, inventory management, and scheduling analysis, as well as recommendations, for provided scenario.

Introduction

This portfolio work project, a demand management plan, will help you demonstrate competency in forecasting, inventory management, and scheduling.

Scenario

Wild Dog Coffee Company, a locally owned company with a single coffee shop location, serves a wide selection of espresso beverages, small breakfast and lunch menu items, and a limited evening menu. The company is planning to expand the business by adding an additional location. While different menu items may be tested at the new location, their core processes will remain the same. You have been working on a process improvement in preparation for the expansion and are now turning your attention to demand management.

Your Role

As an owner of Wild Dog Coffee Company, you and your business partners are planning the opening of a second location. You need to prepare an analysis and recommendations for demand management, including forecasting, inventory, and scheduling, for your current location, so you can refine the model before opening the second location.

Requirements

Include the following in your demand management plan:

· Assess the impact of advertising on product demand.

. If using Wild Dog Coffee Company, the following basic assumptions will help you prepare a demand forecast:

 

The other owners of Wild Dog Coffee Company handle the business’ marketing and sales functions, and they believe that advertising expenditures impact the sale of coffee beverages. They want you to confirm whether or not their advertising dollars are driving sales. Here is what was agreed upon by all the owners:

Wild Dog Coffee Business Information
Questions Responses
How many espresso beverages are made each hour? 30, on average
How many ounces of espresso beans are used for each beverage? 1.5 ounces
How many hours per day is the coffee shop open? 6:00 a.m.–8:00 p.m., Sunday–Saturday
How many days each month is the business open? 364 days per year. The coffee shop is closed on Christmas day.

You have the following six months of data to work with for pounds of espresso beans (y) used each month and monthly advertising expenditures (x):

Espresso Bean Use and Advertising
Month Lbs/Beans (y) Advertising Dollars (x)
1 987 $1,050
2 1,412 $1,500
3 1,020 $1,000
4 1,140 $1,250
5 1,322 $1,500
6 1,399 $1,500

· Interpret the forecasting model for the selected product.

. Use a simple linear regression model to show your forecast.

. If using Wild Dog Coffee Company, forecast the pounds of espresso beans needed for month 7 if the advertising budget for month 7 is $1,350. Interpret the model and respond to the following questions for Wild Dog Coffee Company:

. How many espresso beverages will the company need to prepare, on average, each day?

. How many pounds of espresso beans will the company need, on average, each day?

. To what extent do advertising dollars predict the need for espresso beans?

· Prepare an inventory management analysis for the selected product.

· In your analysis, include two different approaches to inventory management. What are the pros and cons of each system you analyzed?

. If using Wild Dog Coffee Company, the following provides additional information you have gathered from the inventory management analysis:

. Since Wild Dog Coffee Company is small, the company must manage inventory very carefully. While larger companies can have lots of inventory on the shelf, Wild Dog simply does not have the cash to do that. As such, you have a number of pressures for small inventories. Wild Dog does not have the ability to store a lot of beans, to cover the cost of capital, or to withstand unnecessary expenditures for taxes, insurance, and shrinkage. Shrinkage is important because roasted espresso beans only maintain their optimal freshness for two weeks.

. Demand is approaching 1,400 pounds of espresso beans per month.

. Only one type of espresso bean is stocked.

. Demand is not constant on a daily or weekly basis.

. If you run out of espresso beans at any point, you will have to close the business until the next shipment of beans arrives.

. Espresso beans are shipped in 25-pound packages. (This is your base inventory unit.)

. The cost per pound of beans averages $9.00.

. Espresso beans are delivered seven (7) days after placing the order and on any day of the week.

. Shipping is free on orders over $250. Otherwise, shipping is $19.95 per order, regardless of weight. (This is the only ordering cost you incur.)

. Holding costs are 10 percent/year/unit.

. Standard deviation for daily demand is 1.84 pounds.

· Analyze the business’ scheduling management.

· In your analysis, detail two different staffing scenarios for Wild Dog Coffee Company or your selected business. What are the pros and cons of each staffing scenario?

· Use a Word table or Excel spreadsheet to show both staffing scenarios for each day of the week. Include the daily and weekly total staffing costs and number of hours worked for each employee.

· If using Wild Dog Coffee Company, the following provides additional information you have gathered from the staffing analysis:

. Shifts have been scheduled according to who wants to work which shift. This has generally worked out well, but you realize you need to tighten up the scheduling process in order to optimize a staffing model. Two employees are required to make a coffee beverage. One employee takes the orders, and a barista makes the coffee drink and hands it to the customer.

. Baristas are paid $14/hour, regardless of whether they are full-time or part-time.

. Full-time employees (up to 40 hours/week), other than baristas, are paid $12/hour.

. Part-time employees (up to 20 hours/week), other than baristas, are paid $9/hour.

. All full-time employees receive company benefits that equate to 15 percent of their hourly rate. (This is known as a benefits load.)

. All full-time employees are paid at 150 percent of their regular rate for all hours worked over 40 hours per week. Full-time employees can only work a maximum of 50 hours per week. The benefits load is not applied to overtime hours.

. All part-time employees are paid at 150 percent of their regular rate for all hours worked over 20 hours per week. Part-time employees can only work a maximum of 26 hours per week.

. It costs $500 to hire each additional employee, and it costs $250 to terminate an employee.

. Full-time employees are likely to resign if moved to part-time status.

. The coffee shop is open 84 hours per week. There are two additional hours allocated each day for one employee to perform opening and closing activities. (That is, one hour is allocated for opening duties and one hour is allocated for closing duties.)

. Your current level of staffing for coffee beverages is as follows:

. Baristas – 1 full-time; 3 part-time.

. Non-barista – 1 full-time; 2 part-time.

· Detail the results of your analysis for Wild Dog Coffee Company

· Deliverable Format

Requirements:

· The demand management plan is to be a minimum of 7 pages, not including the title, reference, and appendix pages.

· Use a demand management plan template of your choice.

Related company standards:

· The demand management plan is a professional document and should therefore follow the corresponding MBA Academic and Professional Document Guidelines (available in the MBA Program Resources), including single-spaced paragraphs.

· In addition to the title and reference pages, include the following in the appendix:

. Linear regression model for product forecasting.

. Word table or Excel spreadsheet for staffing scenarios.

· Use 2–3 scholarly or academic sources, where applicable, one of which must come from the Wall Street Journal, Forbes, or MIT Sloan Management Review.

· Use APA formatting for citations and references.

Evaluation

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies through corresponding scoring guide criteria:

· Competency 1: Analyze how operations management theories and models effect the development and delivery of products or services to the marketplace.

. Interpret the forecasting model for the selected product.

· Competency 2: Use logistics and supply chain management tools to manage the distribution of products and services.

. Prepare an inventory management analysis for the selected product.

· Competency 3: Use data to evaluate the effect of operations management decisions on organizational goals.

. Assess the impact of advertising on product demand.

. Analyze the business’ scheduling management.

· Competency 4: Evaluate the effectiveness of operations management strategies to achieve quality and customer service goals.

. Recommend an inventory management system and staffing plan for a selected business and product.

· Competency 5: Communicate business needs, opportunities, and strategies with multiple stakeholders.

. Write coherently to support a central idea with correct grammar, usage, and mechanics as expected of a business professional.

Faculty will provide feedback as if they were the recipient of your deliverable in the workplace, using the scoring guide. Refer to the scoring guide to ensure that you meet the grading criteria for this assessment before submission.