Describe macroeconomic factors that influence interest rates

Reference no: EM133204386 , Length: Word count: 2 Pages

Assignment Part 1: Interest Rates

Many managers do not understand the various ways that interest rates can affect business decisions. For example, if your company decided to build a plant with a 30-year life and short-term debt financing (renewed annually), the cost of the plant could skyrocket if interest rates were to return to their previous highs of 12% to 14%. On the other hand, locking into high, long-term rates could be very costly also with a long period when low short-term interest rates were to be available. As you can see, the ability to know your economic environment and its impact on projected interest rates can be crucial to making good financing decisions.

Describe two to three macroeconomic factors that influence interest rates in general. Explain the effects of each factor on interest rates.

Now think about the industry in which you are employed or one in which you have past experience. To what macroeconomic factors is your industry most sensitive?

Describe two contemporary factors that seem to be impacting your industry today, and identify their impacts on the interest rates experienced within your chosen industry.

Support your comments with your own experiences, the weekly resources, and/or additional research. Use APA throughout and provide appropriate in-text citations and references.

Assignment Part 2: Stock Valuation, Risk and Returns

Stock valuation

Dividend Discount Model Stock Valuation

How to value a company using discounted cash flow (DCF)

Stock Valuation and Investment Decisions

The links above contain information on stock valuation, risk, and returns. Please review each one of them. Based on the knowledge gained from the materials presented in the links above, complete the following activities:

Present a detailed discussion of what you learned about stock valuation. Provide examples of how your company has used the concepts. Do you believe financing a company's operation using stock is better than financing with bonds? Why or why not? Support your discussion with a numerical example.

Based on the materials presented in the "Risk and Return" video, present a discussion on why the materials are important in financial decision making. How would you incorporate risk and return in your financing decisions?

Assignment Task: For this task, imagine that you were asked to assist with a presentation for a group of undergraduate business students about the differences between the consumption of knowledge and the creation of knowledge. Prepare a chart with two columns: one for the consumption of knowledge, and one for the creation of knowledge. Be sure to cite your references within your chart where appropriate. You may use Excel, Word, or another program you are comfortable with.

Your chart should include the following:

1. Define the consumption of knowledge and creation of knowledge specifically as they pertain to the business field.

2. Provide examples of the consumption of knowledge and creation of knowledge in business research.

3. Explain research practices used for the consumption of knowledge versus the creation of knowledge in the business field.

4. Compare the effects of consumption of knowledge and creation of knowledge on current business trends. Include related theories as examples that could specifically relate to your chosen business specialization.

5. Determine how a person can use both the consumption of knowledge and creation of knowledge as a business student.

Length: one chart, not including title or reference pages

References: Include a minimum of three scholarly references

Your chart should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards where appropriate.

Reference no: EM133204386

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