Template-Type: ReDIF-Article 1.0 Author-Name: William P. Dukes Author-Name: Zhuoming (Joe) Peng Author-Name: Margaret M. Tanner Title: Steve Sharpe: A Stock Report Abstract: This case pertains to the valuation approach for a common stock being considered for purchase by a student in a Student-Managed Fund (SMF) class at a university. The fundamental factors of analysis pertaining to the profile of the company include the firm’s products or services, the nature of the demand for the products and the managerial comparisons for sales. In addition, earnings per share, return on sales, return on assets and return on equity are considered. However, historical data on price-earnings ratios and dividend payout ratios are very important in all valuations, but they are not stressed in the case. The emphasis of the case relates to recognition of risk, as it pertains to the common stock of the firm, estimations of the required rate of return (sometimes known as the hurdle rate), calculation of the present value factor which permits analysts to determine the present value of annualized return data projected into a specific future period. A price of the common stock projected into the future can be discounted to compare its present value with the current market price to determine whether the stock is undervalued or overvalued. In like fashion, a holding period return calculated in a time period greater than five years can be annualized for comparison with the required return obtained from an asset pricing model to determine whether the stock is undervalued or overvalued. Classification-JEL: G11, A29 Keywords: Risk, Stock Report, Required Rate of Return, Student-Managed Fund Journal: Review of Business and Finance Studies Pages: 1-13 Volume: 1 Issue: 1 Year: 2010 File-URL: http://www.theibfr2.com/RePEc/ibf/rbfstu/rbfs-v1n1-2010/RBFS-V1N1-2008-1.pdf File-Format: Application/pdf Handle: RePEc:ibf:rbfstu:v:1:y:2010:i:1:p:1-13 Template-Type: ReDIF-Article 1.0 Author-Name: Ilhan Meric Author-Name: Kathleen Dunne Author-Name: Sherry F. Li Author-Name: Gulser Meric Title: Variety Enterprises Corporation: Capital Budgeting Decision Abstract: The capital budgeting decision is one of the most important financial decisions in business firms. In this case, Variety Enterprises Corporation (VEC) is considering whether to invest in a new production system. To determine if the project is profitable, VEC must first determine the weighted average cost of capital to finance the project. The simple payback period, discounted payback period, net present value (NPV), internal rate of return (IRR), and modified internal rate of return (MIRR) techniques are used to study the profitability of the project. MIRR is a relatively new capital budgeting technique, which assumes that the reinvestment rate of the project’s intermediary cash flows is the firm’s cost of capital. The stand-alone risk of the project is evaluated with the sensitivity analysis and scenario analysis techniques assuming that manufacturing the new product would not affect the current market risk of the company. The case gives students an opportunity to use the theoretical profitability and risk analysis techniques explained in standard finance textbooks in a real-world setting. The case is best suited for MBA and Master of Accounting students and is expected to take approximately three to four hours to complete. The case may also be appropriate for undergraduate senior finance majors. Classification-JEL: G31 Keywords: Capital budgeting, weighted average cost of capital, cash flow, payback period, net present value, internal rate of return, modified internal rate of return, sensitivity analysis, scenario analysis Journal: Review of Business and Finance Studies Pages: 15-25 Volume: 1 Issue: 1 Year: 2010 File-URL: http://www.theibfr2.com/RePEc/ibf/rbfstu/rbfs-v1n1-2010/RBFS-V1N1-2008-2.pdf File-Format: Application/pdf Handle: RePEc:ibf:rbfstu:v:1:y:2010:i:1:p:15-25 Template-Type: ReDIF-Article 1.0 Author-Name: Balasundram Maniam Author-Name: James B. Bexley Author-Name: Jolene Bon-Jorno Title: Where Should General Motors Go from Here Abstract: General Motors was once the pinnacle for industrial accomplishment, leading the automobile industry in market share for over 70 years. Early business strategies paved the way for this success, including; organizational structuring, marketing, and utilizing efficient production through economies of scale and scope. Over time, GM became comfortable and complacent in their market leader position. They did not heed the changes taking place in the automobile market, the overall economy and consumers. As a result, their technology became outdated and their manufacturing practices overly complex and unconcerned with quality, all while costs increased and profits dwindled. General Motors continued to spiral downward until their final collapse in 2008-2009. The company ended up in bankruptcy, but has made plans to reform and revive their business. This case is suitable for undergraduate or graduate business students. The case should require about one hour of outside preparation and one hour of class discussion. Journal: Review of Business and Finance Studies Pages: 27-35 Volume: 1 Issue: 1 Year: 2010 File-URL: http://www.theibfr2.com/RePEc/ibf/rbfstu/rbfs-v1n1-2010/RBFS-V1N1-2008-3.pdf File-Format: Application/pdf Handle: RePEc:ibf:rbfstu:v:1:y:2010:i:1:p:27-35 Template-Type: ReDIF-Article 1.0 Author-Name: Francis Petit Title: What Executives Can Learn from U2: An Exploratory Study Abstract: The purpose of this research is to determine what executives can learn from the successful development of the musical band and brand known as U2. To determine this information, a historical study of the U2 journey was conducted with the hopes of uncovering key learning points and takeaways for executives. The main findings of this study indicate that there are four (4) overarching themes that have lead to not only U2’s success but can also be potentially implemented within the daily roles of executives. The results of this exploratory study can potentially ignite increased research into the U2 Effect and what Corporate America can learn from this musical group. Classification-JEL: M31, M37, M52 Keywords: 2U Effect, Executive compensation, global brand, Entrepreneurial Thought Journal: Review of Business and Finance Studies Pages: 37-43 Volume: 1 Issue: 1 Year: 2010 File-URL: http://www.theibfr2.com/RePEc/ibf/rbfstu/rbfs-v1n1-2010/RBFS-V1N1-2008-4.pdf File-Format: Application/pdf Handle: RePEc:ibf:rbfstu:v:1:y:2010:i:1:p:37-43 Template-Type: ReDIF-Article 1.0 Author-Name: Terrance Jalbert Author-Name: Mercedes Jalbert Author-Name: James E. Briley Title: Optimal Equipment Investments for Northern Plains Grain Farms Abstract: This case presents a teaching tool which requires students to identify an optimal equipment plan for a northern plains small grain farm. Students are presented with information from a farm owner regarding farm size, available labor, farming techniques used and other relevant issues. Students are required to analyze this information to identify the equipment necessary to operate the farm. Students must balance equipment costs and labor issues. They must develop a plan that remains within a predetermined budget. Students use online resources to identify specific equipment along with their appropriate prices. Students are also invited to make general recommendations and comments. This case is suitable for an agricultural economics, agribusiness, or agronomy class. The case is appropriate for use at the senior, or masters level. In some instances, the case may be valuable for Ph.D. students. Students should have some familiarity with farm equipment and the equipment needs of small grain farms before being assigned the case. Students might be assigned to work individually or in teams on the project. Individuals or groups may be required to present their research to the class for discussion and comment. Completion of the case should require 5-10 hours outside of class. Classroom discussion should be about two hours. Classification-JEL: Q12, Q14 Keywords: Farm Finance, Farm Equipment, Capital Budgeting Journal: Review of Business and Finance Studies Pages: 45-59 Volume: 1 Issue: 1 Year: 2010 File-URL: http://www.theibfr2.com/RePEc/ibf/rbfstu/rbfs-v1n1-2010/RBFS-V1N1-2008-5.pdf File-Format: Application/pdf Handle: RePEc:ibf:rbfstu:v:1:y:2010:i:1:p:45-59 Template-Type: ReDIF-Article 1.0 Author-Name: Shuoming (Joe) Peng Author-Name: William P. Dukes Title: The Student-Managed Fund: A Case Study of Portfolio Properties Abstract: This case provides students with an in-depth look at various risk measurements in portfolio management. The primary issues examined in this case are: 1) Review pertinent concepts of describing and summarizing a bath of numerical data in the context of identifying portfolio properties. Although these concepts have been covered in basic statistics courses, it is important enough to go over again so that students may be better prepared for discussions regarding various risk measurements in portfolio management; 2) A distinction between use of geometric and arithmetic return data; 3) How risk is measured in investments, and what some of the measures of risk are used. In particular, it is recommended that a spreadsheet model be used to compute these various risk measurements. Differentiate between different types of risk; namely, total risk, systematic risk, and nonsystematic risk; 4. Demonstrate that the true betas tend to move toward 1.0 over time. With more advanced students, it is recommended that they use the Excel spreadsheet, (or some other statistical software, i.e., SAS or Minitab), to run the single-index regression model and verify these beta estimates. This case has a difficulty level appropriate for senior or first year MBA students. It is designed to be taught in a single class period (60 to 80 minutes). With more advanced students, the case can be assigned as a team project. The team presents their findings and conclusions to the class. If the case is used as a team presentation project, approximately 2 to 3 hours of student preparation time should be adequate for most students depending on their computational ability. Classification-JEL: G11, A29 Keywords: Student-managed Fund, Portfolio Properties Journal: Review of Business and Finance Studies Pages: 61-72 Volume: 1 Issue: 1 Year: 2010 File-URL: http://www.theibfr2.com/RePEc/ibf/rbfstu/rbfs-v1n1-2010/RBFS-V1N1-2008-6.pdf File-Format: Application/pdf Handle: RePEc:ibf:rbfstu:v:1:y:2010:i:1:p:61-72 Template-Type: ReDIF-Article 1.0 Author-Name: Kathleen Dunne Author-Name: Maria H. Sanchez Title: One Hundred Years in Prison for $126 Millong Fraud Abstract: This case examines the multimillion dollar Ponzi scheme perpetuated by Edward Okun. Okun was convicted in 2009 of 23 counts including wire fraud, money laundering, bulk cash smuggling and other offenses. In this case, students will learn about fraud, money laundering, federal currency reporting requirements, aspects of tax law, and ethics. This case is suitable for either undergraduate or graduate students. It can be used in an Introduction to Business, an Ethics, or a Fraud course. Students typically require 2-3 hours outside of class to complete the case. Approximately one hour of class time is needed to go over the case. This case can help students develop both written and verbal skills. Classification-JEL: M40, M42 Keywords: Ponzi scheme, fraud, money laundering Journal: Review of Business and Finance Studies Pages: 73-80 Volume: 1 Issue: 1 Year: 2010 File-URL: http://www.theibfr2.com/RePEc/ibf/rbfstu/rbfs-v1n1-2010/RBFS-V1N1-2008-7.pdf File-Format: Application/pdf Handle: RePEc:ibf:rbfstu:v:1:y:2010:i:1:p:73-80 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos Fong Reynoso Title: The Use of Case Studies in Preparing Postgraduate Dissertations on Small and Medium Sized Firms Abstract: In recent years the case study methodology has been used much more in conducting research on firms. This increase is due to the needs and requirements, and to the perception that the results obtained by using such a methodology are of superior quality. The growing acceptance of case studies has been impelled by a wider knowledge and discussion of the criteria for assessing quality of case studies, and this has led to a better understanding of how the inclusion of case studies can be used to resolve certain problems connected to the study of organizations, in particular small and medium sized businesses. The present work proposes a design for conducting research suitable for writing a postgraduate dissertation on the subject of small and medium sized businesses. The methodology fulfills the conditions of quality required in a project conducted through the use of case studies. and that it is possible to complete within a limited period of time, thus improving the rate of students who graduate after completing their studies. Classification-JEL: A23, B40, M00 Keywords: Case study, SMEs Journal: Review of Business and Finance Studies Pages: 81-94 Volume: 1 Issue: 1 Year: 2010 File-URL: http://www.theibfr2.com/RePEc/ibf/rbfstu/rbfs-v1n1-2010/RBFS-V1N1-2008-8.pdf File-Format: Application/pdf Handle: RePEc:ibf:rbfstu:v:1:y:2010:i:1:p:81-94