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pick one news story (or potentially more if they are related) from the financial press and present it back to the group. Your choice of news story is up to you. Use the following structure to frame your discussion:
What’s the headline?
What does this mean?
Why is this important to the economy?
In this case, Janet O’Brian, a staff working in Wilson Family’s Foundation needs to make investment recommendations on several corporate bonds to the foundation’s Investment Committee.
The key is on uncovering possible mispricing (either underpriced or overpriced) & the drivers of the mispricing. The bond earns an “attractive” rate of return if its yield is greater than the benchmark rate, or is “underpriced,” thus a bargain. (The bond earns a “poor” rate of return if its yield is less than the benchmark rate, or is “overpriced,” thus should be avoided.)
The key concepts include bond valuation, bond yields, default risk premium, credit ratings, and risk-return etc. (Please refer to textbook chapter 8 on bond valuation.)
Please provide detailed answers to the following questions:
1. How is the bond market like at the end of 2018? (Page 1-2) What is the expectation of interest rate movements & the economy for 2019?
2. Based on these expectations, what kind of bonds are more attractive for investment? Why? (p.2-3)
3. Referring to Appendix of the case (page 10), what factors are taken into considerations when S&P Credit Ratings assign bond ratings?
4. Please complete the attached excel file, which contains three tables are provided. Please complete the portions that are highlighted with yellow color. Answer the following questions after completing the excel file:
1) Assuming the reported credit ratings are correct & that the market yields for those ratings are appropriate expected returns (benchmarks) for the bonds, quantify the attractiveness of the bonds: how does the yield compare to the benchmark (Exhibit 5 in p.8)
2) Janet O’Brian suggests that the bond ratings are incorrect. Assuming that O’Brian’s alternative ratings (a full category improvement) are correct and that the market yields for those ratings are appropriate expected returns for the bonds, once again quantify the attractiveness of the bonds in two ways: how does the yield compare to the benchmark? How does the current price compare to the benchmark-yield implied price?
3) Which bond(s) do you recommend based on the above analysis?
Differentiate risk among components including strategic, hazard, financial,
and operations
Write a paper about a plan both short and long term on finding a job after completing a bachelor’s degree in business mainly studying in finance. The paper is supposed to be information gathered that would help with getting a desired job. It can be any job preferably in the finance field such as an advisor or an analyst.
As an employee, you will be personally responsible for your retirement savings. You do not have to provide personal information, but here, you will develop a plan how you plan to retire comfortably.
In this paper, you will address the following:
How much will you need to retire comfortably?
How long will it take you to save?
What are the challenges facing your proper level of saving?
What can you do to increase your chances of a comfortable retirement?
What industry-specific challenges do you face in developing a comfortable retirement?
As an employee, you will be personally responsible for your retirement savings. You do not have to provide personal information, but here, you will develop a plan how you plan to retire comfortably.
In this paper, you will address the following:
How much will you need to retire comfortably?
How long will it take you to save?
What are the challenges facing your proper level of saving?
What can you do to increase your chances of a comfortable retirement?
What industry-specific challenges do you face in developing a comfortable retirement?
Holtzman Clothiers’s stock currently sells for $38.00 a share. It just paid a dividend of $2.00 a share (i.e., Do = $2.00). The dividend is expected to grow at a constant rate of 5% a year. What stock price is expected 1 year from now? What is the required rate of return?
Holt Enterprises recently paid a dividend, Do, of $2.75. It expects to have nonconstant growth of 18% for 2 years followed by a constant rate of 6% thereafter. The firm’s required return is 12%. a. How far away is the horizon date? b. What is the firm’s horizon, or continuing, value? c. What is the firm’s intrinsic value today, P0?
Tresnan Brothers is expected to pay a $1.80 per share dividend at the end of the year (i.e., D, = $1.80). The dividend is expected to grow at a constant rate of 4% a year. The required rate of return on the stock, r„ is 10%. What is the stock’s current value per share?
Weston Corporation just paid a dividend of S1.00 a share (i.e., Do = $1.00). The dividend is expected to grow 12% a year for the next 3 years and then at 5% a year thereafter. What is the expected dividend per share for each of the next 5 years?