potential ethical issues

The purpose of this assignment is to explain core concepts related to stocks and to analyze the ethical implications of decisions and promote ethical standards within organizations.

Read the Chapter 7 Mini Case on pages 339-341 in Financial Management: Theory and Practice. Using complete sentences and academic vocabulary, please answer questions a through d. (Case 4 Attached)

Using the mini case information, write a 250-500 word report presenting potential ethical issues that may arise from expanding into other related fields. In your discussion, proactively strategize about possible expansion by explaining opportunities to promote ethical standards within your organization.

While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines, which can be found in the APA Style Guide, located in the Student Success Center.

This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.

Mini Case

Your employer, a mid-sized human resources management company, is considering expansion into related fields, including the acquisition of Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporary heavy workloads. Your employer is also considering the purchase of Biggerstaff & McDonald (B&M), a privately held company owned by two friends, each with 5 million shares of stock. B&M currently has free cash flow of $24 million, which is expected to grow at a constant rate of 5%. B&M’s financial statements report short-term investments of $100 million, debt of $200 million, and preferred stock of $50 million. B&M’s weighted average cost of capital (WACC) is 11%. Answer the following questions.

A. Describe briefly the legal rights and privileges of common stockholders.

B. What is free cash flow (FCF)? What is the weighted average cost of capital? What is the free cash flow valuation model?

C. Use a pie chart to illustrate the sources that comprise a hypothetical company’s total value. Using another pie chart, show the claims on a company’s value. How is equity a residual claim?

D. Suppose the free cash flow at Time 1 is expected to grow at a constant rate of forever. If, what is a formula for the present value of expected free cash flows when discounted at the WACC? If the most recent free cash flow is expected to grow at a constant rate of forever (and), what is a formula for the present value of expected free cash flows when discounted at the WACC?

Rubic_Print_Format

Course Code	Class Code
FIN-650	FIN-650-O500	Benchmark – Mini Case 4	30.0
Criteria	Percentage	Unsatisfactory (0.00%)	Less than Satisfactory (74.00%)	Satisfactory (79.00%)	Good (87.00%)	Excellent (100.00%)	Comments	Points Earned
Content	100.0%
Question A	15.0%	Answer to question A is not included.	Answer to question A is incomplete or incorrect.	Answer to question A is included but lacks explanation and relevant supporting details.	Answer to question A is complete and includes relevant supporting details.	Answer to question A is extremely thorough and supported with substantial relevant details.
Question B	15.0%	Answer to question B is not included.	Answer to question B is incomplete or incorrect.	Answer to question B is included but lacks explanation and relevant supporting details.	Answer to question B is complete and includes relevant supporting details.	Answer to question B is extremely thorough and supported with substantial relevant details.
Question C	15.0%	Answer to question C is not included.	Answer to question C is incomplete or incorrect.	Answer to question C is included but lacks explanation and relevant supporting details.	Answer to question C is complete and includes relevant supporting details.	Answer to question C is extremely thorough and supported with substantial relevant details.
Question D	15.0%	Answer to question D is not included.	Answer to question D is incomplete or incorrect.	Answer to question D is included but lacks explanation and relevant supporting details.	Answer to question D is complete and includes relevant supporting details.	Answer to question D is extremely thorough and supported with substantial relevant details.
Ethical Issues and Standards (C. 4.2)	30.0%	Report discussing potential ethical issues that may arise from expansion and opportunities to promote ethical standards within the organization is not included.	Report discussing potential ethical issues that may arise from expansion and opportunities to promote ethical standards within the organization is incomplete or incorrect.	Report discussing potential ethical issues that may arise from expansion and opportunities to promote ethical standards within the organization is included but lacks explanation and supporting details and examples.	Report discussing potential ethical issues that may arise from expansion and opportunities to promote ethical standards within the organization is complete and includes supporting details and examples.	Report discussing potential ethical issues that may arise from expansion and opportunities to promote ethical standards within the organization is extremely thorough and includes substantial supporting details and examples.
Mechanics of Writing (includes spelling, punctuation, grammar, language use)	10.0%	Surface errors are pervasive enough that they impede communication of meaning. Inappropriate word choice or sentence construction is used.	Frequent and repetitive mechanical errors distract the reader. Inconsistencies in language choice (register) or word choice are present. Sentence structure is correct but not varied.	Some mechanical errors or typos are present, but they are not overly distracting to the reader. Correct and varied sentence structure and audience-appropriate language are employed.	Prose is largely free of mechanical errors, although a few may be present. The writer uses a variety of effective sentence structures and figures of speech.	Writer is clearly in command of standard, written, academic English.
Total Weightage