03 Jan There is some evidence

MGT325 Finance for Managers

Module 1 Discussion

What does it mean to say that managers should maximize shareholder wealth “subject to ethical constraints”? What ethical considerations might enter into decisions that result in cash flow and stock price effects that are less than they might otherwise have been?

MGT325 Finance for Managers

Module 2 Discussion

Investigate some of the Sarbanes-Oxley (SOX) Act’s provisions for companies from the Internet, periodicals, or academic journals. Select one of these provisions, briefly describe it, and indicate why you think (or don’t think) financial statements will be more trustworthy if company financial executives implement this provision of SOX.

MGT325 Finance for Managers

Module 3 Discussion

In early 2014, the United States government had more than $17 trillion in debt (approximately $55,000 for every U.S. citizen) outstanding in the form of Treasury bills, notes, and bonds. From time to time, the Treasury changes the mix of securities that it issues to finance government debt, issuing more bills than bonds or vice versa.

With short-term interest rates near 0 percent in early 2014, suppose the Treasury decided to replace maturing notes and bonds by issuing new Treasury bills, thus greatly shortening the average maturity of U.S. debt outstanding. Discuss the pros and cons of this strategy.

MGT325 Finance for Managers

Module 4 Discussion

Risk is a major concern of almost all investors. When shareholders invest their money in a firm, they expect managers to take risk with those funds. What do you think are the ethical limits that managers should observe when taking risk with other people’s money?

MGT325 Finance for Managers

Module 5 Discussion

Financial executives insist that there should be no separation between an individual’s personal ethics and his or her business ethics. “It’s a jungle out there” and “business is business” should not be excuses for engaging in unethical behavior. Many firms have ethics codes which are based on economically rational concepts such as integrity and trustworthiness, which guide the decision maker in attempting to increase shareholder wealth. Of course, some employees sometimes choose to not comply with their firm’s ethics code.

How do ethics codes apply to project selection and capital budgeting? What are the potential risks to a company of unethical behaviors by employees? What are potential risks to the public and to stakeholders? Please explain how Saint Leo’s core value of integrity is reflected in your answer.

MGT325 Finance for Managers

Module 6 Discussion

Cash flow projections are a central component to the analysis of new investment ideas. In most firms, the person responsible for making these projections is not the same person who generated the investment idea in the first place. Why?

MGT325 Finance for Managers

Module 7 Discussion

There is some evidence that firms deliberately manage earnings in advance of a major stock repurchase (buyback). Do you believe that corporate managers tend to manipulate their stock’s value prior to a buyback, or do you believe that corporations tend to initiate a buyback to enhance shareholder value?

MGT325 Finance for Managers

Module 8 Discussion

Is there a conflict between maximizing shareholder wealth and never paying bribes when doing business abroad? If so, how might you explain the firm’s position to shareholders asking why the company does not pay bribes when its foreign competitors in various nations clearly do so? Please explain how Saint Leo’s core value of responsible stewardship is reflected in your answer.

MGT325 Finance for Managers

Module 1 Discussion