• Bond duration (introduction) (An illustration of bond duration).
• Common Stock Constant Growth (Discussion of Common Stock along with an example of the Constant Growth Pricing Model).
• Discount rate basics (This video explains what are the discount rate and the reasons that something worth less to me today if there is a high interest rate).
• Financial Planning: How to Explain Capitalization Rate (Explanation of capitalization rate).
• Introduction to Present Value (This video introduce to you one of the most important concept, which is the present value concept).
• Math in Daily Life: How to Calculate Rate of Return (This video shows how you calculate the rate of return on your investment).
• Relationship between bond prices and interest rates (Why bond prices move inversely to changes in interest rate?)
• Understanding the basic order types for trading stock:
• Yield to Maturity (This video provides an example of calculating Yield-to-maturity).

Discussion 1

A publicly held company has common and preferred stock that is held by many investors and is actively traded.

Discuss the questions/statements below:

1. What is the difference between common stock and preferred stock? What are some of the characteristics of each type of stock?
2. What is classified stock? When “going public, why might a small company designate some stock currently outstanding as “founders’ shares”?
3. A sinking fund can be set up in one of two ways:

(a) the corporation makes annual payments to the trustee, who invests the proceeds in securities (frequently government bonds) and uses the accumulated total to retire the bond issue at maturity;

(b) the trustee uses the annual payments to retire a portion of the issue each year, either calling a given percentage of the issue by a lottery and paying a specified price per bond or buying bonds on the open market, whichever is cheaper.

Cite your source(s) and respond to the response below

1) Common stock provides someone ownership rights. This means you have voting rights when selecting a new board of director, mergers, authorizing the issuance of additional shares, etc. depending on the company you can also receive dividends as payment, but it can be riskier than bonds because it can vary by company and you are last to receive it. (Bracker, K. 2009)

On the other hand, as a preferred stockholder, you have a higher claim to dividends or asset distribution than common stockholders but have limited to no voting rights in corporate governance. Also, during liquidation preferred stockholders have higher claim of assets than common stockholders but less than bondholders. (Ganti, A. 2020)

2) According to the Nasdaq glossary, classified stock is “the division of stock into more than one class of common stock, usually called class A and class B. The specific features of each class, which are set out in the charter and bylaws, usually give certain advantages to the Class A shares, such as increased voting power.” (Nasdaq, nd)

Investopedia also mentions their definition, shares from a publicly traded company that have different share classes, class A or B. Usually class A shares are issued to the company’s top management team and directors. (Hayes, A. 2019)

When a company is going public, they might want to give out founder’s shares (classified stock) to still keep control of the company. This type of shares allows them to have super voting rights and helps them in retaining control over the company. If the company decides to sell, they can only sell to the public the shares with less voting power. (Fontinelle, A. 2019)

3) The advantage for option A, is lower interest payment obligation, which is best interest for the bondholder and helps reduce the default risk, but they won’t be able to receive the premium on redemption of their bonds. Stockholders also like this because the expenses reduce net income hurting stock prices. For both of these scenarios, have disadvantages. Of a bond is redeemed (sinking fund) it will reduce the interest payments a bondholder receives. (Bank, E. 2019) Bonds are subject to risks such as, interest rate, prepayment risk, credit risk, and liquidity risk, which can also hurt the firm by adding to their debt. (Lumen, nd)

Reference:

Bracker. K. (2009). Common Stock Constant Growth (Discussion of Common Stock along with an example of the Constant Growth Pricing Model). https://allaplusessays.com/order

Required Videos:

Collaborative Dynamics. (2015, January 13). Strategic planning and SWOT Analysis[Video file]. Retrieved from

Discussion 2

Discuss your organization for paper 4, i.e., what is the background of the organization? Why did you choose it from others in the industry?

For paper 2and paper 4you will have to choose a U.S. headquartered publicly traded companyto perform an analysis.

The following companies are NOT to be used for your research and analysis:

1. Activision Blizzard
3. Amazon
4. Apple
5. AT&T
6. Berkshire Hathaway
7. BMW
8. Boeing
9. Burger King
10. Coca Cola
11. Costco
12. CVS
13. Delta
14. Disney
15. Dunkin’ Brands
16. Electronic Arts
18. FedEx
19. Ford
20. GameStop
21. General Motors
23. Hershey’s
24. Home Depot
25. IBM
26. IKEA
27. JetBlue
28. Johnson & Johnson
29. Lowe’s
30. LVMH
31. McDonald’s
32. Microsoft
33. Nestle
34. Netflix
35. Nike
36. PepsiCo
37. Petco
38. Proctor & Gamble
39. Samsung
40. Starbucks
41. Southwest Airlines
42. Target
43. Tesla
44. Toyota
47. Under Armour
48. UPS
49. Verizon
50. Volkswagen
51. Walmart
52. Walgreen’s
53. Wendy’s
54. Whole Food (Amazon)
55. NO hospital or healthcare facilities
56. NO banks or financial institutions
57. NO not for profit institutions or foundations
58. NO private companies

Cite your source(s) and respond to the response below.

Best Buy Co., Inc . is an American multinational consumer electronics retailer headquartered in Minnesota. It was originally founded in 1966 as an audio specialty store called Sound of Music. In 1983, it was re-branded under its current name with an emphasis placed on consumer electronics. Best Buy operates internationally in Canada and Mexico, and formerly operated in China until 2011. The company also operated in Europe until 2012. It has many subsidiaries globally (Wikipedia, 2021).

Best Buy is the largest specialty retailer in the United States consumer electronics retail industry, according to Yahoo Finance (Yahoo, 2017). The company ranked No. 72 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.It has earned numerous corporate awards, including being named “The Most Sustainable Company in the United States” by Barron’s in 2019.

Like many other companies, Best Buy is undergoing a transformation due to a shift to online sales, and other shifts in buying patterns. During the Covid-19 lockdown and increased frequency of working from home, Best Buy announced that its US online sales (increased purchase of computers, printers, tablets, fitness tech and other gear) for the second quarter of 2020 had tripled. Best Buy said in February 2021 that it laid off 5,000 workers this month. Best Buy expects 40% of its sales to come from online purchases in 2021, in contrast to 19% two years ago, and it said it needs to alter its workforce in response to this shift. Best Buy has closed 20 stores over the past two years, and will close 5 more in February 2021, with many additional closures expected (Meyersohn, 2021).

The company interests me because we have often made purchases there, and because it seems to be emblematic of ongoing changes in the industry and in the business world, which I would like to research and know more about.

Reference:

Meyersohn, N. (2021, February 25). Best Buy Just Laid Off 5,000 Workers and Will Close More Stores. CNN. Retrieved from

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