BUS 650 Week 5 Discussions

Required Resource

Text

Byrd, J., Hickman, K., & McPherson, M. (2013).  Managerial Finance  [Electronic version]. Retrieved from https://content.ashford.edu/

· Chapter 9: Capital Structure

· Chapter 10: Dividend Policy

 

Recommended Resources

Articles

Mergent. (n.d.). Mergent Online Quick Tips . Mergent Online.  Retrieved from Online Ashford Library.

Mergent Database for Company and Industry Research.

· To access go to the Ashford Library and select “Find Articles and More” in the top menu panel.  Next, select “Databases A-Z” and go to section “M” for “Mergent”.

Modigliani & Merton (1958). The Cost of Capital, Corporation Finance, and the Theory of Investment. American Economic Review, 261 – 297.  Retrieved from ProQuest database.

Website

Moneychimp (Links to an external site.). (http://www.moneychimp.com/articles/financials/fundamentals.htm)

 

CHOSEN FINAL PAPER TOPIC IS NIKE

DISCUSSION 1

Factors in Capital Budgeting Decisions

Imagine you are a representative of management in the company you have selected for your Week 6 Assignment and you must make a capital budgeting decision. The decision is to implement a new computer network system to decrease the time between customer order and delivery. The cost will be 10% of last year’s profits. You are charged with describing the important considerations in the decision-making process to upper management. In your response, be sure to include the following:

· A description of the important factors, in addition to quantitative factors, that were considered when making this capital budgeting decision.

· An explanation of how these factors are significant to the company.

· A summary of how you will determine the criteria to rank capital budgeting decisions and whether some criteria are more important than others.

· A calculation of the proposed return on investment based on criteria you select and justification for that ROI.

Develop a 200 – 250 word explanation supporting your recommendations.

Tip: For help with reading an annual report access this handy guide from  Money Chimp (Links to an external site.)  (http://www.moneychimp.com/articles/financials/fundamentals.htm)

DISCUSSION 2

Assessing Dividend Policy

Revisit the company you chose for your Week 6 Final Project. Using the annual report and other sources such as a 10k or 10q’s, discuss the dividend policy of your company.

Answer the following questions as part of your response:

· How would you describe your chosen company’s dividend policy?

· Why do you believe this company chose the dividend policy they have in place? 

· Do you agree or disagree that they have selected the best dividend policy for the company?

· How might this dividend policy function in both perfect and imperfect capital markets?

· Calculate the dividend rate over the past 5 years. Define why you believe that it has or has not changed over the last 5 years.

Support your position with evidence from the text or external sources.  Your post should be 200-250 words in length.