FIN 3210-02OL Week 6 Discussion
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Northwood University, Michigan *
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3210
Subject
Finance
Date
Jan 9, 2024
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Piper
Barnhart
FIN
3210-020L
Week
6
Discussion
In
an
article
from
Digital
Music
News
entitled,
“Top
Investment
Firm
Says
Spotify’s
‘Darkest
Days
Are
Ahead’
—
‘Competition
Is
Fierce,
Margins
Thin’,”
it
speaks
on
how
Spotify’s
rebound
in
stock
price
in
the
past
year
does
not
necessarily
mean
there
will
continue
to
be
future
success
for
the
company.
There
is
a
belief
that
with
some
of
the
current
economic
downturn
as
well
as
how
crowded
to
online
music
market
is
that
there
may
not
be
as
much
room
for
Spotify’s
growth
as
they
may
think.
This
information
would
be
useful
for
the
CFO
of
a
company
because
they
would
need
to
understand
how
the
market
is
changing
and
not
become
too
comfortable
with
their
rise
in
stock
price.
Understanding
economic
conditions
is
very
important
for
any
CFO.
This
can
relate
in
some
mays
to
the
Behavioral
Finance
Theory.
Although
in
a
perfect
market
when
Spotify’s
stock
price
rises
and
the
company
seems
to
be
growing
in
popularity,
Behavioral
Finance
Theory
shows
how
imperfections
in
the
market
can
change
that
sense
of
perfectness.
My
question
for
the
class
would
be:
As
CFO
of
this
company
how
might
I
combat
or
change
my
sources
of
financing
to
make
up
for
this
possible
economic
downturn?
References
King,
A.
(2023,
October
3).
Top
investment
firm
says
Spotify’s
“darkest
days
are
ahead.”
Digital
Music
News.
https://www.digitalmusicnews.com/2023/10/01/spotify-stock-darkest-days-
ahead-2023-analyst-report/
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Related Questions
Exercise 2: You are evaluating the investment in two companies whose past ten years'
return are shown below:
Salalah Mills
Oman Mills
X2
Year
X
1
7
49
4
4
16
81
3
-3
-2
4
36
1
1
5
8
64
25
ΣΧ15
E X? =115
N=
ΣΧ-22
Σχ174
Calculate the Average Return and Risk of each company's return? Which of the two
companies are more risky and why?
arrow_forward
Please don't used Ai solution
arrow_forward
Q11 Andy Bailey recently graduated from the University of MF and is joining the Bank of MF as a financial analyst.
He is assigned to conduct relative valuation to determine if the implied stock price per share of Amazon.com Inc.
(ticker: AMZN). Bailey collects the following information about Amazon and its comparable companies. He notices
that the earnings per share of NWSA and DXLG are negative. However, Bailey believes it is normal that some
companies have negative EPS due to reasons such as asset impairment or corporate restructuring cost. Therefore,
Bailey decides he should still include NWSA and DXLG when calculating the benchmark price-earnings ratio.
Q: Is Bailey's decision on including NWSA and DXLG when calculating the benchmark price-earnings ratio
justifiable? Why?
Target
Comparable
AMZN
VIAC
GOOGL
YNDX
NWSA
MSFT
CHTR
IBM
DXLG
Price
3256.93
37.26
1752.64
69.58
11.86
203.51
661.55
125.88
0.70
Basic EPS
42.66
3.93
59.15
1.03
-2.16
5.82
15.85
6.28
-0.89
Diluted EPS
41.83
3.92…
arrow_forward
Case Study 1: The Struggling Startup
Prompt: A promising tech startup, initially backed by significant venture capital, has been facing
declining revenues and increasing operational costs. Despite having a strong product concept, the
company has struggled to gain traction in the market.
Questions:
1. Market Analysis: How can the startup identify the root causes of its market penetration
challenges? What are the key factors hindering customer adoption and growth?
2. Financial Performance: Analyze the company's financial statements to pinpoint areas of
inefficiency and cost-cutting opportunities. What strategies can be implemented to improve
profitability?
3. Product Strategy: Evaluate the current product offering and identify areas for improvement
or innovation. How can the startup differentiate its product in a competitive market and attract
new customers?
Case Study 2: The Merger and Acquisition Dilemma
Prompt: A large multinational corporation is considering acquiring a smaller, but…
arrow_forward
please answer the 3rd question
arrow_forward
If a management team wishes to boost the company's stock price, then it should consider
Copyright by Gio-lus Software, Inc. Copying, distributing or Drd party website posting impressly prohibited and constitutes copyright violation
boosting the company's dividend by $0.50 or more every year, increasing the company's
retained earnings, and paying off all long-term debt as rapidly as possible in order to
achieve an A+ credit rating.
O increasing its effort to boost its market share of branded footwear in all geographic regions,
spending additional money on corporate citizenship and social responsibility, and keeping
the company's image rating above 75.
O paying off all long-term debt as rapidly as possible, keeping the company's dividend payout
ratio between 25% and 50%, spending additional money on corporate citizenship and
social responsibility, and maintaining a credit rating that is no less than B+.
O increasing the company's retained earnings each year, keeping the company's credit…
arrow_forward
QUESTION 7
Which of the following companies will probably have the highest decline in profit if the economy goes into recession?
O A company with a DOL = 5.7
A company with a DOL = 2.5
A compnay with a DOL = 5.8
A company with a DOL = 5.5
arrow_forward
Quiz Q8
arrow_forward
Not use ai please don't
arrow_forward
14-7
You are a business analyst with a big investment bank, and you are evaluating the equity risk, business risk, and financial risk of Abilon's Inc. You went online and found that the industry consensus on Abilon's equity risk is 1.5. You also know that the company's debt-equity ratio is 1. What is Abilon's estimated business and financial risk based on the model βA(1 + D/E)?
Select one:
a. 0.5; 1
b. 0.5; 2
c. 0.75 and 0.5
d. 0.75 and 0.75
e. 1 and 1
arrow_forward
Problem 7-26 Valuing Businesses (LO3)
Start-Up Industries is a new firm that has raised $360 million by selling shares of
stock.Management plans to earn a 20% rate of return on equity, which is more than the 15%
rate of return available on comparable-risk investments. Half of all earnings will be reinvested
in the firm.
a. What will be Start-Up's ratio of market value to book value?
Note: Do not round intermediate calculations.
Market-to-book ratio
b. What will be Start-Up's ratio of market value to book value if the firm can earn only a
rate of return of 5% on its investments?
Note: Do not round intermediate calculations. Round your answer to 1 decimal place.
Market-to-book ratio
arrow_forward
Problem 7-26 Valuing Businesses (LO3)
Start-Up Industries is a new firm that has raised $280 million by selling shares of stock. Management plans to earn a 20% rate of return
on equity, which is more than the 12% rate of return available on comparable-risk investments. Half of all earnings will be reinvested in
the firm,
a. What will be Start-Up's ratio of market value to book value?
Note: Do not round intermediate calculations.
Market-to-book ratio
What will be Start-Up's ratio of market value to book value if the firm can earn only a rate of return of 8% on its investments?
Note: Do not round intermediate calculations. Round your answer to 1 decimal place.
Market-to-book ratio
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Give true answer this accounting question not use ai
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A Moving to another question will save this response.
Quèstion 8
What is the covariance of returns between stocks A and B?
Year
Returm A
Retum B
2017
60%
35%
2016
20%
15%
2015
-20%
-20%
None of the listed items is correct
O 733.33%2
O 27.08%2
O 20.00%2
O 10.00%2
A Moving to another question will save this response.
MacB
esc
20
F3
O00
F4
F2
F5
$
4
# 3
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please give me answer in relatable
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QUESTION 1
Professors Narishimhan Jegadeesh and Sheridan Titman, demonstrated how stocks with high returns over a 3- to 12-month period did not earn
excess profits of about 1% per month for the following year.
True
False
QUESTION 2
A candlestick with equal opening and closing prices
A. Neutral Cloud
B. Morning Star
C. Doji
D. A Hammer
QUESTION 3
The advance-decline line is used to indicate
A. if the majority of stocks in the market are acting in concert with the major averages
B. if the intermediate market cycle is nearing completion
C. if a bull market is occurring
D. if volume trends are confirming price trends
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2
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SEE MORE QUESTIONS
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ISBN:9781111581565
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Related Questions
- Exercise 2: You are evaluating the investment in two companies whose past ten years' return are shown below: Salalah Mills Oman Mills X2 Year X 1 7 49 4 4 16 81 3 -3 -2 4 36 1 1 5 8 64 25 ΣΧ15 E X? =115 N= ΣΧ-22 Σχ174 Calculate the Average Return and Risk of each company's return? Which of the two companies are more risky and why?arrow_forwardPlease don't used Ai solutionarrow_forwardQ11 Andy Bailey recently graduated from the University of MF and is joining the Bank of MF as a financial analyst. He is assigned to conduct relative valuation to determine if the implied stock price per share of Amazon.com Inc. (ticker: AMZN). Bailey collects the following information about Amazon and its comparable companies. He notices that the earnings per share of NWSA and DXLG are negative. However, Bailey believes it is normal that some companies have negative EPS due to reasons such as asset impairment or corporate restructuring cost. Therefore, Bailey decides he should still include NWSA and DXLG when calculating the benchmark price-earnings ratio. Q: Is Bailey's decision on including NWSA and DXLG when calculating the benchmark price-earnings ratio justifiable? Why? Target Comparable AMZN VIAC GOOGL YNDX NWSA MSFT CHTR IBM DXLG Price 3256.93 37.26 1752.64 69.58 11.86 203.51 661.55 125.88 0.70 Basic EPS 42.66 3.93 59.15 1.03 -2.16 5.82 15.85 6.28 -0.89 Diluted EPS 41.83 3.92…arrow_forward
- Case Study 1: The Struggling Startup Prompt: A promising tech startup, initially backed by significant venture capital, has been facing declining revenues and increasing operational costs. Despite having a strong product concept, the company has struggled to gain traction in the market. Questions: 1. Market Analysis: How can the startup identify the root causes of its market penetration challenges? What are the key factors hindering customer adoption and growth? 2. Financial Performance: Analyze the company's financial statements to pinpoint areas of inefficiency and cost-cutting opportunities. What strategies can be implemented to improve profitability? 3. Product Strategy: Evaluate the current product offering and identify areas for improvement or innovation. How can the startup differentiate its product in a competitive market and attract new customers? Case Study 2: The Merger and Acquisition Dilemma Prompt: A large multinational corporation is considering acquiring a smaller, but…arrow_forwardplease answer the 3rd questionarrow_forwardIf a management team wishes to boost the company's stock price, then it should consider Copyright by Gio-lus Software, Inc. Copying, distributing or Drd party website posting impressly prohibited and constitutes copyright violation boosting the company's dividend by $0.50 or more every year, increasing the company's retained earnings, and paying off all long-term debt as rapidly as possible in order to achieve an A+ credit rating. O increasing its effort to boost its market share of branded footwear in all geographic regions, spending additional money on corporate citizenship and social responsibility, and keeping the company's image rating above 75. O paying off all long-term debt as rapidly as possible, keeping the company's dividend payout ratio between 25% and 50%, spending additional money on corporate citizenship and social responsibility, and maintaining a credit rating that is no less than B+. O increasing the company's retained earnings each year, keeping the company's credit…arrow_forward
- QUESTION 7 Which of the following companies will probably have the highest decline in profit if the economy goes into recession? O A company with a DOL = 5.7 A company with a DOL = 2.5 A compnay with a DOL = 5.8 A company with a DOL = 5.5arrow_forwardQuiz Q8arrow_forwardNot use ai please don'tarrow_forward
- 14-7 You are a business analyst with a big investment bank, and you are evaluating the equity risk, business risk, and financial risk of Abilon's Inc. You went online and found that the industry consensus on Abilon's equity risk is 1.5. You also know that the company's debt-equity ratio is 1. What is Abilon's estimated business and financial risk based on the model βA(1 + D/E)? Select one: a. 0.5; 1 b. 0.5; 2 c. 0.75 and 0.5 d. 0.75 and 0.75 e. 1 and 1arrow_forwardProblem 7-26 Valuing Businesses (LO3) Start-Up Industries is a new firm that has raised $360 million by selling shares of stock.Management plans to earn a 20% rate of return on equity, which is more than the 15% rate of return available on comparable-risk investments. Half of all earnings will be reinvested in the firm. a. What will be Start-Up's ratio of market value to book value? Note: Do not round intermediate calculations. Market-to-book ratio b. What will be Start-Up's ratio of market value to book value if the firm can earn only a rate of return of 5% on its investments? Note: Do not round intermediate calculations. Round your answer to 1 decimal place. Market-to-book ratioarrow_forwardProblem 7-26 Valuing Businesses (LO3) Start-Up Industries is a new firm that has raised $280 million by selling shares of stock. Management plans to earn a 20% rate of return on equity, which is more than the 12% rate of return available on comparable-risk investments. Half of all earnings will be reinvested in the firm, a. What will be Start-Up's ratio of market value to book value? Note: Do not round intermediate calculations. Market-to-book ratio What will be Start-Up's ratio of market value to book value if the firm can earn only a rate of return of 8% on its investments? Note: Do not round intermediate calculations. Round your answer to 1 decimal place. Market-to-book ratioarrow_forward
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SEE MORE QUESTIONS
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Recommended textbooks for you
- Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Excel Applications for Accounting Principles
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ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning