General Education

Trident FIN501 2020 JULY All Modules Discussions Latest

FIN501 Strategic Corporate Finance

Module 1 Discussion 

Finance in Movies and TV/Excel for Finance

The first part of the discussion should be fun. Many of you without a background in finance may have gotten your impression of the finance world from TV or movies. Even the highly prestigious Certified Financial Analyst (CFA) Institute has published Top 20 Films about Finance: From Crisis to Con Men.

Share what your impressions are based on a recent TV show or movie, or one of the movies from the CFA Institute’s list if you can find one of the movies online. If you haven’t watched anything finance-related lately, check out the one of these movies: The Big Short, Margin Call, or Wall Street (the original one, not the awful sequel). TV shows include Billions or some early episodes of Silicon Valley that involve getting finance for the new company. Post your thoughts in the first week of the module.

For the second week of the module, dig into the assignments and start to use Microsoft Excel. There are some videos on Excel in the background reading page, but find an additional video or two that helps you get started. Share the link with your classmate and discuss the usefulness of the video you found.

 

FIN501 Strategic Corporate Finance

Module 2 Discussion 

Tesla Motors

Tesla Motors is the “it” stock right now in the automotive industry. Tesla was a pioneer in offering cars that run 100% on electricity rather than gasoline, and it has also diversified into solar energy, purchasing the company SolarCity. Its stock price has risen high enough in recent years that it has surpassed automobile giant General Motors in market valuation.

However, not all analysts believe Tesla is a good investment at its current price. It sells less than a 100,000 cars per year, compared with General Motors which sells around 10 million cars a year. Unlike General Motors, Tesla has yet to earn a profit.

Here are some articles both pro and con about whether you should invest in Tesla. Take a look at these articles and also try to find some more recent articles on Tesla’s stock:

https://www.forbes.com/sites/johnwasik/2017/04/14/5-reasons-why-tesla-is-bubble-priced/#d0626b26c631

https://www.smarteranalyst.com/2017/03/16/5-reasons-excited-tesla-inc-tsla-stock/

Based on what you’ve read, do you think Tesla is worth its high valuation, or is it simply priced too high because it is considered new and trendy? Would you personally invest in Tesla, or would you prefer to invest in one of the more established auto companies such as GM or Ford?

 

 

 

FIN501 Strategic Corporate Finance

Module 3 Discussion 

NPV in Your Own Life

Reading about Net Present Value (NPV) for this module, you probably thought of it as a technique used only by corporations. But the technique may also apply to your own purchases.

You may have heard a salesperson tell you, “This product pays for itself!” While this is probably rare for most products, sometimes there are future savings from certain products that will offset some of the costs. For example, if you buy a newer, more reliable, and more fuel-efficient car, it may save you on repair bills and gas prices compared with your old car. If you are a coffee connoisseur, buying a $100 espresso machine might save you money compared with constantly buying $4 drinks at your local Starbucks.

Think of a purchase you are planning to make or have recently made. How much did it cost? How much per year do you think you will save from this purchase, and for how many years will you get these savings? Estimate the present value of the savings, and subtract the cost of the product. Note that it is rare that any purchase will “pay for itself” (e.g., have a positive NPV). But are the savings enough that the product becomes a lot “cheaper” and more worthwhile for you to buy?

 

FIN501 Strategic Corporate Finance

Module 4 Discussion 

Junk Bonds

If you have poor credit due to being delinquent on credit card debt or other issues, chances are the bank is going to charge you a higher interest rate on a personal loan, or it might not give you a loan at all. Corporations face the same problems. If a company takes on too much debt or is otherwise considered to be a credit risk, then it also gets low credit ratings. In this case, if it wants to take on more debt it needs to issue what is known as “junk bonds,” or as corporations prefer to call them, “high-yield bonds.

Whatever you call these types of bonds, their key feature is that they pay higher interest than bonds from a corporation that has a high credit rating. If you have a 401(k) or other retirement investment fund, chances are you have the option to make a portion of your investment in these higher risk/higher return bonds.

Do some research on junk bonds. What kind of controversies do you see with them? Do you think they are a solid investment for your retirement, perhaps no riskier than most investments? Or do they deserve the derogatory term “junk”? Share the links to the articles you find with your classmates, and discuss your opinions as to whether you think the higher interest rate justifies the increased risk.

 

FIN501 Strategic Corporate Finance

Module 4 Reflective Discussion 

Final Reflections

Has this class changed how you view investments and financial management? Are there any concepts from the class that you will use for your career? Are there any concepts that you will use for your own personal investment or money management strategies?

After responding to the Reflective Discussion questions above, please complete an anonymous Course Evaluation Survey. Instructors are not able to view course evaluation reports until after the grade submission period is over. Thank you for your feedback.

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