Report On Greydanus, Boeckh And Associates

Our company will plan to finance our strategy principally through issuing stock and cash flows from operating activities generated from the company’s normal business functions. It is undesirable for our strategy to issue debt because we would like to stay away from interest payments. Our company anticipates our debt to equity leverage ratio to be around 0.5.

Canada’s financial stability depends on the health of America’s economy, as international trade accounts for 45% of Canada’s Gross Domestic Product (GDP) and 79% of exports are to the United States. Canadian and American unemployment rates are positively correlated for that reason, as exemplified in early 2009. Canada’s unemployment rate quickly steepened as the United States’ rate gradually increased to about 10% (refer to graph 1 and 2). During this time, Canada’s growing trade surplus became a deficit in only a few months (refer to graph 3). From this data, one can determine that Canada’s exports decreased rapidly due to rising economic

The old maxim goes “when the U.S. sneezes, Canada catches a cold”, alluding to the close social, political and economic ties that exist between both nations. One would therefore expect the Global Financial Crisis (GFC) , which brought the U.S. economy to the edge of a recession, to have the same effect on Canada.

The following essay will thoroughly examine the severe economic downturn of 2008, formerly known as the housing bubble collapse. We will mainly focus our discussion on the effects the financial crisis had on Canada and the U.S and examine why both countries were affected differently. Although the collapse of the housing bubble is the most identifiable cause, it is extremely difficult to pinpoint one specific defining moment or event triggering the global financial collapse. There are many factors involved, due to the complex nature of the financial systems across the world, and this paper will delve in the key contributing variables that led to this financial crises.

The lectures covered the extended period of low interest rates from 2002-2004 and the unorthodox policies taken during and after the financial crisis, in part to avoid a deflationary spiral.

From the view of demand, after 2000, the decreasing interest rate and the availability of

The second major response from the overnight rate being raised is that more financial capital starts flowing into Canada (The Bank of Canada, 2015b). As interest rates become higher, international investors push their funds into Canada to take advantage of the higher rate of returns (The Bank of Canada, 2015b). As capital flows into Canada, the value of the Canadian dollar is increased (The Bank

Burgundy Investment’s philosophy involved carefully evaluating the economics of individual companies and their managements. The firm stressed independent research and a long-term, “bottom-up” value approach to the assessment of individual companies. The firm’s approach was considered contrarian and opportunistic since Burgundy tended to invest in undervalued companies that were either temporarily out of favor because of some short-term negative event or had been overlooked by investors and, therefore, were improperly priced.

Currently, the US fiscal debt rests at nearly $14 trillion making it the world’s largest debtor. In fact, it is competing with the European Union, which is just a union of nearly 28 nations (Blanchard et al, 2010). The financial experts have cited the reason being most countries trusting the dollar for its store of value. As a result, more countries are saving their money in from of dollars leading to more capital inflow. The capital inflow will create a burden to the US making the interest rates to increase in the long run (Blanchard et al, 2010). More specifically, this paper looks at the causes leading to the fiscal debt that includes increased expenditures, capital inflow, borrowing from foreigners as well as negative net

In the international foreign exchange market, the Canadian dollar, Australian and New Zealand are collectively referred to as resources currency (Issa, Lafrance & Murray, 2006). The reason for this is that the currency exchange rate changes are greatly influenced by the international commodity prices. Canada is humongous, sparsely populated and rich in oil, minerals, timber and Marine resources. Formed by Canada's export trade, agriculture, forest and energy products. Energy and raw material prices will make Canadian dollar. In a long run, people generally believe that Canada economy is vulnerable to external shocks. The influence of the export trade is influenced by international commodity price fluctuations. Canada international trade relies highly on the United States. However, due to the proper macroeconomic policy applied, Canada can always successfully resist the external economic shocks, which display the strong toughness. The economic

Currently, the 10-year nominal interest rate and the 10-year TIPS rate are historically low. The Fed has claimed that its aggressive monetary policy is responsible for these interest rates and that its fiscal policy is currently restrictive, which means that the government is trying to reduce spending or raise taxes in order to decrease the deficit. This paper will analyze the government’s claims using the models and theories discussed in the’ Financial Markets’ lectures over the course of the past month.

In general, the lower the company's reliance on debt for asset formation, the less risky the company is since excessive debt can lead to a very heavy interest and principal repayment burden. This is demonstrated through statistics such as high financial risk, low interest coverage ratios, and high debt ratios. However, when a company chooses to forgo debt and rely largely on equity, as in the case of AHP, the company does so at the expense of a tax reduction effect supplied by interest payments. Thus, a company has to consider both risk and tax issues when deciding on an optimal debt ratio.

In order to prevent the current crisis from deepening, immediate actions are required from the major industrial countries and from the international community. There is evidence that the world economy is experiencing a major slowdown, which may deepen if inadequately managed. For example, Japan is in its worst recession since the war, much of East and South-East Asia is in depression, Russia is experiencing a major downturn, growth has stalled in Latin America, and the prices of primary commodities and a number of manufactures are falling in international markets. Authorities in the industrial countries must nonetheless continue to be alert. Several downside risks still remain, and current policies may prove insufficient to prevent the world economy from slipping into recession. Expansionary fiscal policies may be required in other industrial economies, in addition to Japan. It is also crucial that the rules of an open international trading system should operate smoothly, allowing the economies that face adjustment to reduce their deficits or generate trade surpluses with the more vigorous industrial economies.

This method is short term oriented and in conflict with the company’s intention to focus on investing in the company’s future

Since 1999, the economy has been in a downward trend. The majority of people who had invested in the stock market now known as the great stock bubble or fraud bubble were given a false sense of security and they felt the market would just keep climbing. Were there signs that investors could have looked for to predict the economic downturn? If investors had looked for the signs, maybe they could have changed their direction of investment. This paper will investigate the characteristics of bonds and see if the bond market has proven to be a safe haven for those who were wise enough to invest in it. When the economy is in a downward trend why should more people invest in bonds?