Final Project Submission: Capital Markets Case Report

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timer Asked: Jun 29th, 2018
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Question description

Instructions

Modules One through Eight have prepared you for this assignment submission. Upload a full and final draft of your capital markets case report.

To complete this assignment, review the Final Project Guidelines and Rubric document.

I just post my milestone one, two and three as attachments with rubric. I got high grades about them, respectively. But, actually I also get the feedback from my instructor. I hope you can help me to make adjustment about the final milestone, using my three milestone because they are the main body of final one. I do not wish you just easily copy and put my three parts together without any correction, I will keep the right to refund. Thanks for understanding.

Please do modify and write the final following the points in rubric, including the words, APA style and other requirements.

Thanks and Best.

Final Project Guidelines and Rubric Overview The Federal Reserve System sets policies that facilitate economic and financial activities with the intention of achieving maximum employment, stable prices, and moderate long-term interest rates. Companies must review and assess the impact of Fed policies to their long-term financial planning. Understanding and incorporating these policies into their financial strategic planning is necessary for a company to be successful. In the final project for this course, you will select a Fortune 500 firm for which you will assume the role of chief financial officer (CFO). Given the scenario provided in the prompt below (detailing recent actions taken by the Federal Reserve), you must perform an investigation and analysis for the firm’s board of directors. Specifically, you will need to profile your organization, explain the role of the Federal Reserve to your audience, analyze the particular impacts of the recent Fed actions to capital markets, and put together appropriate recommendations to improve your firm’s financial position, as well as protect it from financial risk. The product of your inquiry and evaluation will be compiled into a capital markets case report. The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure a quality final submission. These milestones will be submitted in Modules Two, Four, and Seven. The final project will be submitted in Module Nine. In this assignment, you will demonstrate your mastery of the following course outcomes: • • • • Interpret macroeconomic events through the lens of firms’ strategic objectives to determine their likely impacts to capital market conditions Utilize tools of risk management to accurately identify and effectively balance risk and return in corporate management and portfolio management Evaluate the role of the Federal Reserve System in driving macroeconomic events that influence capital markets Develop strategies for ethically improving the financial position of corporations based on sound assessments of capital market opportunities Prompt In your capital markets case report, respond to the following scenario: Imagine you are the chief financial officer (CFO) of the Fortune 500 company you chose in Module One (JPMorgan Chase & Co., AT&T, or Qualcomm). Given the positive macroeconomic trends, including improvements in labor market conditions, the Federal Reserve recently increased the federal funds rate. With the continued improvement in economic outlook, the Federal Reserve is poised to increase the federal funds rate again in the near future. The Fed believes that with the gradual increase in monetary policy, the economic activities and labor market will strengthen and inflation will remain consistent. As the CFO of your company, you must analyze and evaluate the likely impacts of the aforementioned Federal Reserve monetary policy actions to the wider economy (and specifically, to capital markets), as well as the resulting implications for your firm. Based on your assessment, you will put forth various recommendations to the company’s board for improving their financial position while safeguarding against corporate risk. 1 Specifically, the following critical elements must be addressed: I. Executive Summary: Summarize the key findings of your report using sufficient detail for your intended audience. II. Organizational Profile: Describe the nature and structure of your organization. Specifically, identify the major strategic objectives of the organization. Be sure to clearly outline and carefully examine each, as you will need to refer back to these in your analysis of the scenario and in defending your financial recommendations. III. The Federal Reserve System A. Illustrate the primary role and functions of the Federal Reserve System using specific examples. For example, what are its key macro-activities and their economic consequences? B. Explain the operational mechanics of the Federal Reserve System in terms of its structures and governance using specific details. In other words, how does the system work on a day-to-day basis? C. Illustrate the potential for the Federal Reserve’s monetary policies to impact capital markets using specific examples. For example, how can the Federal Reserve “make waves” in capital markets through their communications or lack thereof? IV. Analysis of the Scenario A. Interpret the macroeconomic events described in the scenario to determine their likely impacts to capital market conditions. Cite specific evidence and principles discussed in the course that support your claims. B. Draw connections between your analysis of the events and the more specific likely impacts to your own firm and their strategic objectives. Cite specific evidence and principles discussed in the course that support your claims. C. Assess the potential for the macroeconomic events to pose financial risks to your firm. i. First accurately identify the risks. For example, how might your firm be negatively impacted by fluctuations in the money supply? Provide a specific example to illustrate each identified risk. ii. Then measure (i.e., quantify) the risks using appropriate financial tools. For example, consider calculating your firm’s debt-to-capital ratio, debt/equity ratio, interest coverage ratio and their degree of combined leverage. V. Recommendations A. Based on your analysis of the scenario, recommend specific risk management strategies for mitigating or otherwise addressing the identified risks. Defend your proposal using specific evidence and principles discussed in the course. B. Financial Strategies i. Propose specific investment strategies that are informed by your analysis and that clearly support the organization’s strategic objectives. Defend each using evidence and principles discussed in the course. ii. Propose specific funding strategies that are informed by your analysis and that clearly support the organization’s strategic objectives. Defend each using evidence and principles discussed in the course. iii. Finally, defend each of your proposals as being appropriately ethical. Discuss any potential legal or regulatory considerations and indicate how your strategies specifically acknowledge each. 2 Milestones Milestone One: The Federal Reserve System In Module Two, you will submit a draft of Section III of the final project (The Federal Reserve System). This milestone will be graded with the Milestone One Rubric. Milestone Two: Organizational Profile In Module Four, you will submit a draft of Section II of the final project (Organizational Profile). This milestone will be graded with the Milestone Two Rubric. Milestone Three: Analysis of the Scenario In Module Seven , you will submit a draft of Section IV of the final project (Analysis of the Scenario). This milestone will be graded with the Milestone Three Rubric. Final Project Submission: Capital Markets Case Report In Module Nine, you will submit your final project. It should be a complete, polished artifact containing all of the critical elements of the final project. It should reflect the incorporation of feedback gained throughout the course. This submission will be graded with the Final Project Rubric. Deliverables Milestone Deliverable Module Due Grading One The Federal Reserve System Two Graded separately; Milestone One Rubric Two Organizational Profile Four Graded separately; Milestone Two Rubric Analysis of the Scenario Seven Graded separately; Milestone Three Rubric Final Submission: Capital Markets Case Report Nine Graded separately; Final Project Rubric Three 3 Final Project Rubric Guidelines for Submission: Your capital markets case report should be 10 to 12 pages in length and should use 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style. Critical Elements Executive Summary Exemplary (100%) Meets “Proficient” criteria and balances necessary detail with clear, concise language Proficient (90%) Summarizes key findings of the report using sufficient detail for the intended audience Organizational Profile Meets “Proficient” criteria and demonstrates appreciation for the significance of firm’s strategic objectives The Federal Reserve System: Role and Functions Meets “Proficient” criteria and demonstrates nuanced understanding of the role of the Federal Reserve System in driving macroeconomic events Describes the nature and structure of the organization, including clearly identifying and examining the major strategic objectives Accurately illustrates the primary role and functions of the Federal Reserve System using specific examples of its key macro-activities and their economic consequences The Federal Reserve System: Operational Mechanics Meets “Proficient” criteria and demonstrates nuanced understanding of the operations of the Federal Reserve System Accurately explains the operational mechanics of the Federal Reserve System in terms of its structures and governance with specific details The Federal Reserve System: Capital Markets Meets “Proficient” criteria and demonstrates nuanced understanding of the role of the Federal Reserve System in driving macroeconomic events that influence capital markets Accurately illustrates the potential for the Federal Reserve’s monetary policies to impact capital markets using specific examples 4 Needs Improvement (70%) Summarizes the report but fails to highlight key findings using sufficient detail for the intended audience Describes the nature and structure of the organization but fails to clearly or accurately identify or examine the major strategic objectives Illustrates the primary role and functions of the Federal Reserve System, but there are inaccuracies or fails to use specific examples of key macroactivities and their economic consequences Explains the operational mechanics of the Federal Reserve System, but there are inaccuracies or fails to fully address its structures and governance with specific details Illustrates the potential for the Federal Reserve’s monetary policies to impact capital markets, but there are inaccuracies or fails to use specific examples Not Evident (0%) Does not summarize the report Value 5 Does not describe the nature and structure of the organization 7.5 Does not illustrate the primary role and functions of the Federal Reserve System 7.5 Does not explain the operational mechanics of the Federal Reserve System 7.5 Does not illustrate the potential for the Federal Reserve’s monetary policies to impact capital markets 7.5 Analysis of the Scenario: Impacts to Capital Market Conditions Meets “Proficient” criteria and demonstrates a sophisticated ability to interpret macroeconomic events Interprets the macroeconomic events described in the scenario to determine their likely impacts to capital market conditions and cites specific, supporting evidence and principles discussed in the course Analysis of the Scenario: Impacts to the Firm Meets “Proficient” criteria and demonstrates a sophisticated ability to interpret macroeconomic events Analysis of the Scenario: Identify Risks Meets “Proficient” criteria and demonstrates a sophisticated ability to identify risks in corporate and portfolio management Analysis of the Scenario: Measure Risks Meets “Proficient” criteria and demonstrates a sophisticated ability to utilize tools of financial risk management Meets “Proficient” criteria and demonstrates a sophisticated ability to balance risk and reward in corporate and portfolio management Draws connections between the events and the more specific likely impacts to the firm and their strategic objectives using specific, supporting evidence and principles discussed in the course Assesses the potential for macroeconomic events to pose financial risks to the firm by accurately identifying risk using a specific example to illustrate each Quantifies the risks using appropriate financial tools, and all calculations are accurate Recommendations: Risk Management Strategies Recommends specific risk management strategies for mitigating or otherwise addressing the identified risks and defends proposal using specific evidence and principles discussed in the course 5 Interprets the macroeconomic events described in the scenario but fails to determine their likely impacts to capital market conditions or cite specific, supporting evidence and principles discussed in the course Draws connections between the events and the impacts to the firm but fails to reasonably or specifically address the strategic objectives using supporting evidence and principles discussed in the course Assesses the potential for macroeconomic events to pose financial risks to the firm but fails to fully or accurately identify risks using a specific example to illustrate each Quantifies the risks but fails to use appropriate financial tools, or not all calculations are accurate Recommends risk management strategies, but not all are specific or would reasonably mitigate or otherwise address each of the identified risks, or does not defend proposals using specific evidence and principles discussed in the course Does not interpret the macroeconomic events described in the scenario 7.5 Does not draw connections between the events and the impacts to the firm 7.5 Does not assess the potential for macroeconomic events to pose financial risks to the firm 7.5 Does not quantify the risks 7.5 Does not recommend risk management strategies 7.5 Recommendations: Investment Strategies Meets “Proficient” criteria and demonstrates particular insight or creative strategy development for improving the financial position of corporations based on sound assessments of capital market opportunities Proposes specific investment strategies that are informed by the analysis and that clearly support the organization’s strategic objectives, and defends each using evidence and principles discussed in the course Recommendations: Funding Strategies Meets “Proficient” criteria and demonstrates particular insight or creative strategy development for improving the financial position of corporations based on sound assessments of capital market opportunities Proposes specific funding strategies that are informed by the analysis and that clearly support the organization’s strategic objectives; defends each using evidence and principles discussed in the course Recommendations: Ethical Defense Meets “Proficient” criteria and demonstrates nuanced understanding of the ethical considerations and landscape of capital markets and corporate finance Defends each proposal as being appropriately ethical by discussing any potential legal or regulatory considerations and indicating how the strategies specifically acknowledge each Articulation of Response Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy to read format Submission has no major errors related to citations, grammar, spelling, syntax, or organization Proposes investment strategies, but not all are specific or properly informed by the analysis or do not clearly support the organization’s strategic objectives, or does not defend each using evidence and principles discussed in the course Proposes funding strategies, but not all are specific or properly informed by the analysis or do not clearly support the organization’s strategic objectives, or does not defend each using evidence and principles discussed in the course Defends proposals as being appropriately ethical but fails to fully or accurately discuss any potential legal or regulatory considerations or indicate how the strategies specifically acknowledge each Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Does not propose investment strategies 7.5 Does not propose funding strategies 7.5 Does not defend proposals as being appropriately ethical 7.5 Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 5 Total 6 100%
Running head: THE FEDERAL RESERVE SYSTEM The Federal Reserve System 1 THE FEDERAL RESERVE SYSTEM 2 Primary Role and Functions of the Federal Reserve The Federal Reserve refers to the Central Bank of the United States that was formed in the year 1913. It is also called to as Fed and has a role in controlling inflation by monitoring the supply of money in the economy. The government of the United States, therefore, uses the Federal Reserve as a tool for regulating the amount of money. However, the institution is independent because it can make decisions without the need for the government to intervene. Fed is at times considered among the most potent single actors in the economy of the United States as it controls the world’s money. The Federal Reserve performs different functions namely: It regulates the country’s monetary policies. These policies involve the regulation of the supply of money to the other banks and eventually the economy. The policies also moderate interest rates in the economy and as a result enhancing stable prices and maximum employment (Wiles, 2015). Stability of the financial system. By regulating the circulation of money in the US economy, the Federal Reserve promotes the creation of stable financial systems. It also seeks to control system risks through active monitoring of the processes (Greenspan, 2004). Fed works closely with the Treasury Department that helps in protecting the economy against the global financial crisis like the one that happened in 2008. Tools that enhance stability include quantitative easing, the money market investor lending facility and the term auction facility. It provides banking services. The Federal Reserve monetizes the debt by buying treasuries from the federal government. When it buys these treasuries, Fed increases the flow of money in the economy. In other terms, the Federal Reserve is known to as the banker’s bank. THE FEDERAL RESERVE SYSTEM 3 The reason is that it each of the country’s reserve banks stores their currencies as well as processing loans through Fed. The title render of the last resort is used to refer to the Central Bank because banks do not act as other banks’ lenders unless it is the last option. Fostering payment. The Federal Reserve enhances the efficiency and safety of the settlement system by offering services that facilitate payment and transactions dealing with the dollar. Operational Mechanics of the Federal Reserve The Federal Reserve structure has direct connections to the political process. It has a two-part structure: a board of directors which is the central organization located in Washington DC and a decentralized network that is composed of 12 Federal Reserve Banks that are distributed throughout the country (Wiles, 2015). The Board of directors consists of seven members form an independent government agency whose role is to oversee the Federal Reserve System (Greenspan, 2004). The Board works in collaboration with the staff members of the organization. The president appoints the seven board members while the confirmation is the role of the Senate. The term of service is fourteen years, and the expiry of the time happens in every even-numbered year. The extended period of service shields the Board members from political pressures. Each of the appointments of the board members is subject to the approval by the Senate. The president also appoints both the President and the vice president of the board and each of them serves four years. The appointments may, however, be renewed based on the decision of the Senate. The Federal Reserve constitutes 12 regional banks which carry out most of the day-today system operations. These reserve banks are purely non-governmental organizations which THE FEDERAL RESERVE SYSTEM 4 carry out processes in the public interest (Bruno & Shin, 2015). These Reserve Bank branches are located in places like Chicago, Atlanta, Minneapolis, Cleveland and New York among others. Each of the Reserve banks and their subsidiaries has a Board of directors. Each bank also has a president whose appointment is done by the Board of Directors. The approval is however done by the Board of governors so that there is no political influence. The Board members include individuals that represent business interests of districts and the representatives of commercial banks. In other cases, the Board includes members from the labor and consumer sector. The Federal Reserve System also has a Federal Open Market Committee and a Financial Regulatory Reform (Wiles, 2015). Both bodies play a role in the implementation of the monetary policy of the organization. Impact of the Federal Reserve on the Capital Markets Capital markets refer to the part of a financial system that aims at raising capital through investments like shares and bonds. The Federal Reserve can impact on the capital markets in various ways. Open market operations allow for the selling and buying of government securities to control the supply of money in the economy (Bruno & Shin, 2015). For example, the government sells bonds to the public to reduce the circulation of money in the marketplace. This is a mechanism to mitigate inflation because more money in the economy leads to a cycle of boom. On the other hand, the Federal Reserve sells the securities when they need to increase the supply of money in the economy (Wiles, 2015). When there is more money in the economy, individuals can invest more and as a result, create more employment opportunities. Another way THE FEDERAL RESERVE SYSTEM 5 in which Fed influences the capital markets is its ability to regulate interest rates. When the prices are high, individuals borrow more while they request less with low-interest rates. References Bruno, V., & Shin, H. S. (2015). Capital flows and the risk-taking channel of monetary policy. Journal of Monetary Economics, 71, 119-132. Greenspan, A. (2004). Risk and uncertainty in monetary policy. American Economic Review, 94(2), 33-40. Wiles, W. W. (2015). Federal Reserve System. System.
Running Head: AT&T ORGANIZATIONAL ATRUCTURE American Telephone and Telegraph Organizational Structure American Telephone and Telegraph Organizational Structure 1 AMERICAN TELEPHONE AND TELEGRAPHIC ORGANIZATIONAL ATRUCTUR 2 An organization structure is a key factor in ensuring employee satisfaction effectiveness and creativity. In regard to larger companies, a more clear and formal structure is needed to ensure job identity and clear assignments of duties and responsibilities. The internal structure of a company should reflect the company's mission. This helps in developing employees who aim at achieving the overall goals of the firm and succeed in their jobs. American Telephone and Telegraph (AT&T) Company is an example of companies that have maintained a good organizational structure to foster employee job satisfaction and performance. Moreover, its focus on innovation resonates with its employees. In fact, the firm has advanced its service into science to facilitate its employees in offering offer appropriate solutions to customers. AT&T business groups across the nations are based on a corporate culture of being responsible experts (Bourgeois et al., 2017). Actually, the firm's effective corporate structure has enabled it to operate consistently over the past years. AT&T organizational structure is basically multidivisional in nature. It is made up of four business groups. Firstly the long distant service, is the largest component of AT&T. Actually, this is the largest service-oriented business. Even though there is a stiff competition between AT&T and sprint it is apparent that this group will open up to other businesses. The second AT&T business group is called network system business. This group came after the old western electric and it is concerned with the supply of communication system (Bourgeois et al., 2017). This business group has been developed to about 33percent of the international market. It competes with a number corporation such as Ericson, Fujitsu, and Alcatel which are among the leading suppliers of telecommunication services. The third AT&T business group is called the multimedia business. This encompasses the essential handset corded business, private branch exchange (PBE) system and cordless phones AMERICAN TELEPHONE AND TELEGRAPHIC ORGANIZATIONAL ATRUCTUR 3 used in controlling office building communication. The company has made several efforts to grow into this kind of business. The fourth AT&T business group is called the National Cash Register Company. It is currently referred to as Global Information System (GIS). This is a computer firm that deals in PCs. It sells a complete set of appliance such as automated teller machine. Half of this business is domestic while the rest of it is foreign. Generally, the National Cash Register is a large company.Under this business groups, there are a number of small business units such as the transmission business units, submarine cable business unit, switching business unit and microelectronic business units. One of the primary strategic business objectives of AT&T Company is cost cutting and increasing revenue. The company aims to achieve this goal in a number of ways. Firstly, it has formulated plans to reduce operational cost such as the electricity consumption relative to the growth of data on the company's network. The energy intensity target for the year 2020 is 93Mwh per petabyte of network traffic (Hu et al., 2017). Secondly, the company aims to increase its revenue through improved collaboration with customers and improving the workforce performance and productivity. The second strategic business objectives of AT&T are to make an investment in several areas of IT. Investments in IT will go towards reducing improving productivity and efficiency and reducing risks in the business environment. Executives have pointed out that investing in business security solutions could positively impact their business growth since it makes up for an economic turnaround. Moreover, investments in IT will support most of the companies' business strategies such as improved efficiency, management of information and data, economic operation of IT and enhancing the availability of the company's data to users. AMERICAN TELEPHONE AND TELEGRAPHIC ORGANIZATIONAL ATRUCTUR 4 In addition to that, AT&T has incorporated the innovation strategy in its business objectives. They aim to achieve this objective by implementing new ideas, developing new electronic products and changing some of their business models. They also train their employees to engage in innovative activities of the company. Innovation also helps to improve the companies' efficiency by reducing some of the operational costs such as the communications expenses. References AMERICAN TELEPHONE AND TELEGRAPHIC ORGANIZATIONAL ATRUCTUR 5 Bourgeois III, L. J., Goodman, N., Wynne Jr, J. O., Bourgeois III, L. J., Hammaker, P. M., & Doe, L. (2017). Comcast Corporation's Merger with AT&T Broadband. Darden Business Publishing Cases, 1-24. Hu, S., He, Z. L., Blettner, D. P., & Bettis, R. A. (2017). The conflict inside and outside: Social comparisons and attention shifts in multidivisional firms. Strategic Management Journal, 38(7), 1435-1454.
Running head: MACROECONOMIC EVENTS Macroeconomic Events 1 MACROECONOMIC EVENTS 2 The primary challenge facing business entities such as AT&T is the scarcity of resources and their misallocations. Macroeconomic help organizations deprive the best of limited available resources in actualizing the company set goals and objectives. This paper looks into some macroeconomic trends such as improvements in labor market condition, increased Federal Reserves, and the general development on the overall economic outlook in shaping an efficient monitory policy for capital markets thus creating a working economy. Effective economic conditions positively contribute to affordable and profitable business for AT&T thereby enabling business with minimal risks during operations. Labor is an integral part of any organization (Burdett, Carrillo & Coles, 2011). Labor refers to the human power invested in the production of any goods regarding physical and mental effort. Labor measured based on improvements or deterioration but not using figures to measure specific amount spent. With improved labor an organization benefits from increased production, this is because enhanced labor productivity leads to increased output. Improved labor is achievable through various ways, motivating employees, training, development of employees, working environment. Having a motivated team means that the employees will work harder and smart to ensure that the organization achieves the set goals and objectives thus an improvement noted across the departments. With a good taskforce team, the firm’s performance in the capital market will increase due to improved output. The more the outputs of a company, the more sales achieved since their products are readily available to their customers, thus the customers' demands met. The firm can venture into investments that are more profitable and overall improvement and advancement. Most organization investments base on the capital markets, ranging from stocks, issuing bonds and any other long-term investments that will yield returns to the company. The relationship of capital MACROECONOMIC EVENTS 3 market and improved labor is clear and shows that with poor labor standards an organization cannot achieve their set goals thus it is unable to venture into an investment that will yield a return to the company. Hence, improved labor means excellent performance in the capital markets (Piketty, 2015). When Feud alters federal funds rate, an economic effect generally influences businesses all around the country including stock markets thus affecting AT&T normal business. An increase in the present federal funds rate may take about twelve months for its effects been noticeable, but the markets respond immediately to federal rates increase. The federal rates are widely used by the government to curb inflation on different economic trends (Ahmed, & Zlate, 2014). When feud raises the federal rate, it targets lowering money in supply in the economy thus few investments in capital markets because obtaining money gets excessively much expensive. Conversely, decreasing federal funds rate results in increased money in supply. Therefore, more spending on economic activities such as AT&T can then invest broadly in capital markets. It is for this reason that stockbrokers are always on the lookout for central bank policy changes as they directly influence the overall working of the economy. Any alteration on the federal rate translates into a shift in how organizations allocate resources in capital markets because such a change alters the borrowing pattern of companies like AT&T thus affecting its productivity (Gagnon et al. 2011). An increase in federal funds rate results into AT&T lowering its spending as it becomes more expensive to acquire money from banks and other financial markets. An Increase in interest rates results into reduced cash flow by AT&T as it responds to challenging increased rates, with time, this effect causes a lowering of AT&T stocks thus devaluing the overall share value and therefore making share ownership less attractive. Investing MACROECONOMIC EVENTS 4 in equities becomes a risky financial decision than spending on some other forms capital investments because everyone cuts on spending on the event of a rise in feudal rates. In conclusion, it is evident that federal funds rate is indirectly proportional to capital markets because, when the government increases federal rates, AT&T lower its spending on capital investments. As a result, AT&T experience challenges servicing its financial obligations such as debts with unchanging assets and low capital injections with growing debts as illustrated below. In 2018, the total debt for AT&T was $180,500 million and total capital of $420,300 million. Debt to capital ratio for AT&T= total debt/total capital =$180,500/$420,300 =0.43 Debt to equity ratio= debt/equity Equity= $420,300-$180,500 =$239,800 = $180,500/ $239,800 = 0.75 AT&T operates on the following degree of operating leverage and combined the degree of financial leverage for the accounting year 2017/2018. Degree of operating leverage= percentage change of earnings before interest and taxes Percentage change in sales MACROECONOMIC EVENTS 5 Percentage earnings before interest and taxes=154,687,000-152,380,000/155,687,000*100 = 1.48% Percentage change in sale= 2,307,000/155,687,000*100 =1.48% Operating leverage = 1.48%/1.48% =1 Degree of financial leverage= percentage change in earnings per tax/percentage change in earnings before interest and tax = {(0.50-0.46)*100}/1.48% = 2.70% MACROECONOMIC EVENTS 6 References Ahmed, S., & Zlate, A. (2014). Capital flows to emerging market economies: A brave new world?. Journal of International Money and Finance, 48, 221-248. Burdett, K., Carrillo‐Tudela, C., & Coles, M. G. (2011). Human capital accumulation and labor market equilibrium. International Economic Review, 52(3), 657-677. Gagnon, J., Raskin, M., Remache, J., & Sack, B. (2011). The financial market effects of the Federal Reserve’s large-scale asset purchases. international Journal of central Banking, 7(1), 3-43. Piketty, T. (2015). About capital in the twenty-first century. American Economic Review, 105(5), 48-53.
I only got 21 points in the part of milestone one My instructor also give me the feedback as followed: Individual Feedback Add more content and support for how the Fed decisions impact the capital markets. Other sections were well explained. Please focus on this part. Thanks.

Tutor Answer

Alphabet
School: UC Berkeley

Find attached

Running head: MACRO ECONOMICS

1

Macroeconomic Events

MACRO ECONOMICS

2

The primary challenge facing business entities such as AT&T is the scarcity of resources
and their misallocations. Macroeconomic help organizations deprive the best of limited available
resources in actualizing the company set goals and objectives. This paper looks into some
macroeconomic trends such as improvements in labor market condition, increased Federal
Reserves, and the general development on the overall economic outlook in shaping an efficient
monitory policy for capital markets thus creating a working economy. Effective economic
conditions positively contribute to affordable and profitable business for AT&T thereby enabling
business with minimal risks during operations.
Labor is an integral part of any organization (Burdett, Carrillo& Coles, 2011). Labor
refers to the human power invested in the production of any goods regarding physical and mental
effort. Labor measured based on improvements or deterioration but not using figures to measure
specific amount spent. With improved labor an organization benefits from increased production,
this is because enhanced labor productivity leads to increased output. Improved labor is
achievable through various ways, motivating employees, training, development of employees,
working environment. Having a motivated team means that the employees will work harder and
smart to ensure that the organization achieves the set goals and objectives thus an improvement
noted across the departments. With a good taskforce team, the firm’s performance in the capital
market will increase due to improved output.
The more the outputs of a company, the more sales achieved since their products are
readily available to their customers, thus the customers' demands met. The firm can venture into
investments that are more profitable and overall improvement and advancement. Most
organization investments base on the capital markets, ranging from stocks, issuing bonds and any
other long-term investments that will yield returns to the company. The relationship of capital

MACRO ECONOMICS

3

market and improved labor is clear and shows that with poor labor standards an organization
cannot achieve their set goals thus it is unable to venture into an investment that will yield a
return to the company. Hence, improved labor means excellent performance in the capital
markets (Piketty, 2015)...

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Anonymous
Outstanding Job!!!!

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