discussion 1 o Spiritual Life Discussion. Watch the video prompt, read the linked material and answer the following question: How should our faith influence the decisions we make about our life and career? ▪ Michael Novak - https://lawliberty.org/michael-novaks-spirit-of-democratic- capitalism-remains-essential-for-our-time/ ▪ Dorothy Sayers - https://tifwe.org/dorothy-sayers-a-revolution-in-work/ ▪ Romans 13:1-7 discussion 2 Prompt: "FITN" stands for "Finance in the News.” Each week, you will post a link to and a brief summary of a recent article related to corporate finance, marketable securities, and/or central banking as a new thread in the class discussion forum. ▪ Publications you may find useful include:  The NY Times  CNBC Finance  Wall Street Journal  Bloomberg  Yahoo Finance  Realclearmarkets.com o There are other good sources of current financial news, so the list above is not exhaustive. Your posting should highlight the important issues and clearly fit with the subject matter of the course. You will then moderate a discussion on the forum regarding your article as other students respond to your post o Criteria for grading the assignment include how interesting the article, depth of discussion, currency/novelty, and fit with the course. The discussion should cover the following areas: ▪ Review the financial concept(s) highlighted by the article. ▪ Describe the companies and/or industries affected. ▪ Evaluate the likely impact on a specific company or markets, depending on how the article is written. If possible, comment on the extent to which the article supports (or contradicts) what we have discussed or read in class. o Requirements: In addition to your own FITN thread, which should be 250-300 words in length and demonstrate course-related knowledge, you are required to reply to at least 2 other classmates’ FITN threads during each weekly posting. Each reply must be 150-200 words in length and be substantive in content, adding to the discussion regarding the classmate’s original thread. discussion 3 o Spiritual Life discussion – Read the following verses, and answer the following question: Do you agree with the premise that “markets are morally neutral, but the people within them are not”? Why or why not? How is a Christian to engage in a market economy without taking on the morality of others? ▪ Matthew 6:19 ▪ Luke 12: 16-21 ▪ Luke 14:28-30 ▪ Proverbs 11:1 ▪ Romans 13:8 ▪ Proverbs 22:9 o Type: Threaded discussion discussion 4 For most of the last 15 years, capital has been cheap. Since 2009, the after- tax cost of borrowing for some large companies has been below the rate of inflation, making their debt in real terms cost-free. And for much of this time, the stock market moved steadily upward, consistent with historically low costs of equity. We estimate that in early 2022, the weighted-average cost of capital (WACC) for the average company in the S&P 500 hovered below 6%. All that changed in March 2022, when the world’s central banks began raising rates to curb rising inflation. Over the next 12 months, the U.S. Federal Reserve increased its benchmark Fed Funds rate from 0.25% to 4.75% and the yield on 10-year treasury notes climbed from 1.75% to almost 4% today. With rates on risk-free assets rising, the cost of debt for most large corporations also increased — from an average of less than 2.3% for most Baa-rated corporate debt in early 2022 to nearly 5.75% today. And, finally, the cost of equity capital also rose for most large companies over this period — from less than 7% to approximately 10% (according to research conducted by Aswath Damondaran at the Stern School of Business at NYU). All in, the WACC increased by 50% or more in just 12 months — from less 6% a year ago to nearly 9% today o Now that capital has become expensive, how would you as a corporate finance manager adjust how you allocate your capital resources? o Type: Essay format discussion 5 o Prompt: Capital budgeting is just for corporations, right? Not so fast. Read this news article: https://andoverma.gov/1204/Town-Announces-Selection-of-Projects-for and then answer this question: From your perspective, what are the pros and cons of a municipality using public input to decide on capital projects as opposed to having a trained financial manager accomplish the same end? o Type: Threaded format discussion 6 The students will prepare and submit a financial ratio analysis of a target company: Amazon.com. The deliverables for this project are an Excel spreadsheet showing all of the calculations, and a separate Word document in which the student writes a detailed analysis and interpretation of the calculated ratios. • Requirements: The length of the word document should not exceed three pages, exclusive of cover page and exhibits. At a minimum, the calculated ratios should include those listed below. Analyze the 3 most recent fiscal years for this assignment. In your detailed analysis, comment on both the most recent year (current position) as well as the trend over time. Summarize the assignment by answering the following question, “What does this analysis tell you about the company and its financial ability?” 1. Liquidity a. Quick ratio b. Current ratio 2. Asset Management a. Inventory Turnover Ratio b. Days Sales Outstanding c. Fixed Asset Turnover Ratio d. Total Asset Turnover Ratio 3. Debt management a. Total Debt to Total Capital b. Total Debt to Total Assets c. Debt to Equity Ratio 4. Profitability a. Operating Margin b. Profit Margin c. Return on Total Assets (ROA) d. Return on Common Equity (ROE) e. Return on Invested Capital (ROIC) 5. Market Value a. P/E Ratio b. Market/Book Ratio 6. Dupont Formula (disaggregated ROE