Search Our Essay Database

Essay Instructions: Stock options have become the standard for compensating many corporate executives, even though there is evidence to show that these options do not reward performance. Instead they reward executives for economic up turns that they have no control over. Indexed options however, tie executive performance to compensation buy setting a benchmark for the company and only rewarding executives when they do better that benchmark. This removes the problem of rewarding executives for a good economy and lets good executives gain compensation even if the economy is bad. Indexed options seem a better solution for compensation, though corporations argue that this will hurt their ability to
hire top notch executives. Even Allen Greenspan agrees that Indexed options are a better solution.

there is no minimum givin for quotations or parenthetical citations but they must be used

Essay Instructions: Stock & Bonds
Write a 2-3 page paper. In your paper include the following:
? A search of the Internet for a stock and bond of your choice that has historical data performance measures that you can evaluate for the last twenty years.
? Once you have completed your evaluation please explain your findings and which option would have been the best course of action to pursue from a financial standpoint.
? Please include information and topics from our chapter readings to justify your explanation and reasoning.
Include a title page and 3-5 references. Only one reference may be from the internet (not Wikipedia). The other refrences must be from the Grantham University online library. Please adhere to the Publication Manual of the American Psychological Association (APA), (6th ed. 2nd printing) when writing and submitting assignments and papers.

Essay Instructions: Stock Market Project

You will analyze a major U.S. corporation and recommend whether to buy, sell, or hold its common stock. The stock and American Airlines will be selected by your instructor and disclosed during the first week in class. You will be graded on the deliverables listed below and your thought process in making your recommendation to buy, sell, or hold. Please do all calculations using data from the most recent quarterly reports and clearly state the dates of the reports and the dates that end the quarter being reported.

Your paper, submitted in Word, will include the following information:


2) A one-paragraph discussion describing the history and business of Southwest Airlines. This is not required for American Airlines. Cite the source on your References page.

3) A summary (one or two paragraphs) of recent news articles about Southwest Airlines. This is not required for American Airlines. Cite the sources on your References page.

4) A written analysis comparing Southwest Airlines profitability ratios versus those of American Airlines. Provide supporting Exhibit A with the ratios of Southwest Airlines and American Airlines. Cite the source of the ratios.

5) A written analysis comparing Southwest Airlines asset utilization ratios versus those of American Airlines. Provide supporting Exhibit A with the ratios of Southwest Airlines and American Airlines. Cite the source of the ratios.

6) A written analysis comparing Southwest Airlines liquidity ratios versus those of American Airlines. Provide supporting Exhibit A with the ratios of Southwest Airlines and American Airlines. Cite the source of the ratios.

7) A written analysis comparing Southwest Airlines debt utilization ratios versus those of American Airlines. Provide supporting Exhibit A with the ratios of Southwest Airlines and American Airlines. Cite the source of the ratios.

8) A written analysis comparing Southwest Airlines Du Pont number with the Du Pont number of American Airlines. Provide supporting Exhibit B with the Du Pont calculation for Southwest Airlines and American Airlines. Cite the source of the data.

9) A written analysis comparing Southwest Airlines degree of operating leverage, degree of financial leverage, and degree of combined leverage with those of American Airlines. Provide supporting Exhibit C with these calculations for Southwest Airlines and American Airlines. Cite the source of the data.

10) Compare Southwest Airlines cost of capital with that of American Airlines. Explain your assumptions in the paper. Provide supporting Exhibit D. Cite the source of your data and any assumptions that you may have to make. You may use the AYTM-WACC Calculator to do the computations.

11) A section describing how Southwest Airlines stock has performed over the past two years versus American Airlines. Compare on a month-to-month basis to see if they move in the same direction. This can be done using data from a variety of reputable sources online.

12) A section in which the present value of the next five years of Southwest Airlines expected earnings are computed. Use the cost of capital (rounded to the nearest whole number) as the discount rate for the computation. Find the growth rate of earnings over the last five years and assume that same growth rate over the next five years. You may use the TVM calculator or the TVM tables for this computation. Also, compute the price earnings ratio (PER) at each of the most recent four quarterly earnings reports and discuss the changes, if any. Remember that PER is based on annual earnings. Use the trailing 12-month’s EPS for these computations.

13) A recommendation section where you state whether to Buy, Sell, or Hold.

14) References page and in-text citations including the URL and the date accessed for web sources.

Essay Instructions: Stock Market Project

You will analyze a major U.S. corporation and recommend whether to buy, sell, or hold its common stock. The stock and its competitor will be selected by your instructor and disclosed during the first week in class. You will be graded on the deliverables listed below and your thought process in making your recommendation to buy, sell, or hold. Please do all calculations using data from the most recent annual report and state the date of the fiscal year end.

Headlines are about banks, stress test, TARP money, etc.

As the primary corporation for your analysis use: Wells Fargo (WFC)

As the comparison / competitor use: Bank of America (BAC)

Your paper, submitted in Word, will include the following information:

Part 1

1) A title page containing your name, my name, title of the paper and the date.

2) A one-paragraph discussion describing the history and business of your company. This is not required for its competitor. Cite the source on your References page. TCO 1 (5 points)

3) A summary (one or two paragraphs) of recent news articles about your company. This is not required for its competitor. Cite the sources on your References page. TCO 1 & 2 (10 points)

4) A written analysis comparing your company’s profitability ratios versus those of its competitor. Provide supporting Exhibit A with the ratios of your company and its competitor. Cite the source of the ratios. TCO 2 (10 points)

5) A written analysis comparing your company’s asset utilization ratios versus those of its competitor. Provide supporting Exhibit A with the ratios of your company and its competitor. Cite the source of the ratios. TCO 3 & 4 (10 points)

6) A written analysis comparing your company’s liquidity ratios versus those of its competitor. Provide supporting Exhibit A with the ratios of your company and its competitor. Cite the source of the ratios. TCO 5 (10 points)

7) A written analysis comparing your company’s debt utilization ratios versus those of its competitor. Provide supporting Exhibit A with the ratios of your company and its competitor. Cite the source of the ratios. TCO 7 & 11 (10 points)

8) A written analysis comparing your company’s Du Pont number with the Du Pont number of its competitor. Provide supporting Exhibit B with the Du Pont calculation for your company and its competitor. Cite the source of the data. TCO 2 (10 points)

9) A written analysis comparing your company’s degree of operating leverage, degree of financial leverage, and degree of combined leverage with those of its competitor. Provide supporting Exhibit C with these calculations for your company and its competitor. Cite the source of the data. TCO 2 & 9 (10 points)

Part 2

10) Compare your company’s cost of capital with that of its competitor. Explain your assumptions in the paper. Provide supporting Exhibit D. Cite the source of your data and any assumptions that you may have to make. You may use the AYTM-WACC Calculator to do the computations. TCO 8, 9 & 10 (20 points)
11) A section describing how this stock has performed over the past two years versus its competitor. Compare on a month-to-month basis to see if they move in the same direction. This can be done using data from a variety of reputable sources online. Three free sites are yahoo.com, Google.com, and moneycentral.msn.com. TCO 10 (20 points)

12) A section in which the present value of the next five years of your company’s expected earnings are computed. Use the cost of capital (rounded to the nearest whole number) as the discount rate for the computation. Find the growth rate of earnings over the last five years and assume that same growth rate over the next five years. You may use the TVM calculator or the TVM tables for this computation. Also, compute the price earnings ratio (PER) at each of the most recent four quarterly earnings reports and discuss the changes, if any. Remember that PER is based on annual earnings. Use the trailing 12-month’s EPS for these computations. TCO 3, 6 (20 points)
13) A recommendation section where you state whether to Buy, Sell, or Hold. (10 points)
14) References page and in-text citations including the URL and the date accessed for web sources. (5 points)
Frequently Asked Questions
Q1) Why were the selected companies chosen?
Answer: They are major firms that are leaders in their industry. Information about them is readily available.
Q2) How long should the paper be?
Answer: As long as necessary to meet the stated deliverables above.
Q3) Where can I find the financial statements?
Answer: See item 11 above.
Q4) Where can I find the ratios?
Answer: See item 11 above.
Q5) Where do I find the Du Pont number?
Answer: You calculate it based on the financial data.
Q6) Where do I find the degree of operating leverage, degree of financial leverage, and degree of combined leverage?
Answer: You calculate based on the financial data.
Q7) How do I find a company’s cost of debt?
Answer: The cost of debt = the YTM. The after-tax cost of debt = YTM * (1 – tax rate).
It is OK to use the cost of one debt instrument for all the debt that the company has outstanding. If you find the YTM of outstanding debt in Barron’s or the Wall Street Journal, you may use that as a proxy for all of the company’s debt.
Q8) How do I find a company’s tax rate?
Answer: Can be found in the footnotes to the financial statements or via a financial statement calculation. Tax rate = taxes paid / EBIT.
Q9) How do I find the risk-free rate of return?
Answer: Use the 3-month Treasury bill rate
Q10) How do I estimate the return on the stock?
Answer: Use the historical rate of return on the stock over a 5-year period.
Q11) How do I find the beta?
Answer: Follow the procedure discussed in the textbook on page 361 or find beta listed under key statistics at Yahoo/finance. When you compute it, you are certain about the period that the data represents.
Q12) How do I cite references?
Answer: Review the document about APA Style in Doc Sharing.
Q13) What is the site ID for Standard & Poor’s data via the McGraw Hill website.
Answer: Go to www.mhhe.com/edumarketinsight
The site ID is ra212843