GB550 Course Preview
GB550 Course Preview
GB550 Course Preview
Be sure to follow the detailed directions found within the actual course modules after you
receive access. The content in this guide is only a preview and course content may have
changed.
Chapter 1 provides an overview of financial management and the financial environment. The
corporate lifecycle is discussed together with the primary objective of the corporation: value
maximization. Types of financial markets, institutions, major financial instruments, and the
stock market are examined.
Chapter 4 explores the time value of money, one of the most important concepts in finance.
Timeline value analysis is used to examine particular problems. Future value, present value,
interest rate, and time are discussed as the basic four time value of money variables.
Annuities, perpetuities, and uneven cash flows are also reviewed.
Competency Assessment
This Competency Assessment assesses the following outcome(s):
One career role in the financial planning industry is that of the investment advisor. In this
Assessment, you act in this role for the sake of the mini-case study to respond to questions
regarding financial management practices that affect organizational decision-making. Read
the case and the questions carefully and respond in a thorough manner.
Complete the Chapter 1 mini-case, pages 55–56. Prepare this Assignment as a Word
document. List each question followed by your answer.
Assume that you recently graduated and have just reported to work as an investment advisor
at the brokerage firm of Balik and Kiefer Inc. One of the firm’s clients is Michelle DellaTorre,
a professional tennis player who has just come to the United States from Chile. DellaTorre is
a highly ranked tennis player who would like to start a company to produce and market
apparel she designs. She also expects to invest substantial amounts of money through Balik
and Kiefer. DellaTorre is very bright, and she would like to understand in general terms what
will happen to her money. Your boss has developed the following set of questions you must
answer to explain the U.S. financial system to DellaTorre.
C. How do corporations go public and continue to grow? What are agency problems?
What is corporate governance?
D. What should be the primary objective of managers? (1) Do firms have any
responsibilities to society at large? (2) Is stock price maximization good or bad for
society? (3) Should firms behave ethically?
E. What three aspects of cash flows affect the value of any investment?
F. What are free cash flows?
G. What is the weighted average cost of capital?
H. How do free cash flows and the weighted average cost of capital interact to determine
a firm’s value?
I. Who are the providers (savers) and users (borrowers) of capital? How is capital
transferred between savers and borrowers?
J. What do we call the cost that a borrower must pay to use debt capital? What two
components make up the cost of using equity capital? What are the four most
fundamental factors that affect the cost of money, or the general level of interest
rates, in the economy?
K. What are some economic conditions that affect the cost of money?
L. What are financial securities? Describe some financial instruments.
M. List some financial institutions.
N. What are some different types of markets?
O. Along what two dimensions can we classify trading procedures?
P. What are the differences between market orders and limit orders?
Q. Explain the differences among dealer-broker networks, alternative trading systems,
and registered stock exchanges.
R. Briefly explain mortgage securitization and how it contributed to the global economic
crisis.
Prepare this Assignment as a Word document. List each question (a–r), followed by your
answer. Please submit this Assignment through the Dropbox.
The Module 1 Competency Assessment has 10 parts. Please review the checklist criteria for
additional details related to the Bold versus Mastery items.
After you receive access to each module, you will be able to see the submission
requirements and a Checklist Rubric for the Competency Assessment.
Chapter 4 explores the time value of money, one of the most important concepts in finance.
Timeline value analysis is used to examine particular problems. Future value, present value,
interest rate, and time are discussed as the basic four time value of money variables.
Annuities, perpetuities, and uneven cash flows are also reviewed.
Chapter 5 describes the different types of bonds governments and corporations issue,
explains how bond prices are established, and discusses how investors estimate the rate of
return they can expect to earn. The various types of bond investment risk are covered.
Chapter 6 examines the trade-off between risk and return. The chapter discusses how to
calculate risk and return for both individual assets and portfolios. This chapter also develops
the Capital Asset Pricing Model (CAPM), which explains how risk affects rates of return.
Competency Assessment
This Competency Assessment assesses the following outcome(s):
GB550M2: Calculate the value of a firm through the use of discounted cash flow analysis.
Ratio analysis provides useful information for a company’s operations and financial
conditions. Conducting analysis in a mechanical, unthinking manner is dangerous, but when
ratio analysis is used with good judgment, it can provide useful insights into a firm’s
operations and identify the right questions to ask.
In this competency assessment, you address the time value of money also known as
discounted cash flow analysis. This type of analysis is crucial to being able to viably analyze
financial statements.
Course Code ExcelTrack Module Preview
Course Title
Page 5 of 8
Prepare this Assignment responding to the problems as a Excel® or Microsoft Word, showing
all necessary formulas and steps. List each question, followed by your answer.
After you receive access to each module, you will be able to see the submission
requirements and a Checklist Rubric for the Competency Assessment.
Chapter 9 details how the cost of capital is developed for use in capital budgeting. You will
learn that the cost of capital used in capital budgeting is a weighted average of the types of
capital the firm uses, typically debt, preferred stock, and common equity. The component
cost of debt is the after tax cost of new debt.
Chapter 25 completes the discussion of risk and return for traded securities. The primary
goal of this chapter is to extend your knowledge of risk and return concepts. The efficient
portfolio, the Capital Asset Pricing Model, capital market line, and security market line are
examined.
Competency Assessment
This Competency Assessment assesses the following outcome(s):
This competency assessment addresses assessing the value of investment projects. Prepare
this Assignment as a Word document. List each question followed by your answer.
The Arbitrage Pricing Theory helps calculate required stock returns considering a number of
factors. In this Assignment, you will apply Arbitrage Pricing Theory to a business scenario.
Prepare this Assignment responding to the problems as an Excel® or Microsoft Word, showing
all necessary formulas and steps. List each question, followed by your answer. Please submit
this Assignment through the Dropbox.
After you receive access to each module, you will be able to see the submission
requirements and a Checklist Rubric for the Competency Assessment.
Chapter 12 examines corporate valuation and financial planning. You will learn that
maximizing shareholder value should be management’s primary objective; however, to
maximize value, management needs a tool for estimating the effects of alternate strategies
— the corporate-valuation model.
Competency Assessment
This Competency Assessment assesses the following outcome(s):
GB550M4: Assess the impact of a firm’s financing decisions on its capital structure and
shareholder distribution policy.
Select a publicly held company and analyze its capital-structure, applying the theories and
principles learned in this module. The structure of your research paper should include:
A firm’s optimal capital-structure is that mix of debt and equity that maximizes the stock price.
At any point in time, management has a specific target capital structure in mind, presumably
the optimal one, though this target may change over time. For example, financial
management may choose a 50% equity financing [stock] and 50% debt [bond] financing.
Business risk
Tax position
The need for financial flexibility
Managerial conservativeness
Growth opportunities
Business risk is the riskiness inherent in the firm’s operations if it uses no debt.
Compose your 5–7 page (excluding the title page) research paper in a MS Word document
using 6th edition APA format and citation style and save it as Username-GB550.doc
(Example: TAllen- GB550.doc). Please submit this Assignment through the Dropbox.