Corporate Finance: Integration of Faith Paulette Chapman, Lisa Cooke-Moore, Tori Curley, Janelle Dawkins, and Anthony Donkoh 201230 Summer 2012 BUSI 530-B05 LUO Managerial Finance Liberty University Dr. Halstead July 1, 2012
Abstract This essay will provide a scriptural key to understanding the topics of finance in a Christian worldview perspective. The illustrations will be reflected through the events found in God’s word, providing a greater understanding into the relevance of the Bible in today’s economic world. It will show the importance of the integration of faith, as God has provided His wisdom for today in the illustrations of the Holy Word. Refer to II Timothy 3: 16-17 (New King James
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Proverbs 11:1(NKJV) states; "The Lord detests dishonest scales, but accurate weights find favor with him.” Companies that wish to be profitable are those that use just weights. They work at satisfying both consumers and employees by building honest, meaningful, and long lasting relationships (Brealey, et al., 2012, p. 15). In 1Peter 5:2-4(NKJV) we find these words:
"Shepherd the flock of God which is among you, serving as overseers, not by compulsion but willingly, not for dishonest gain but eagerly; nor as being lords over those entrusted to you, but being examples to the flock; and when the Chief Shepherd appears, you will receive the crown of glory that does not fade away. “
Leverage
Financial leverage is a company's ability to pay its debt. It refers to the use of debt with the intention of increasing the potential return of an investment. This debt can increase returns on shareholders in good times and reduce them in bad times (Brealey, et al., 2012, p. 92). A Christian practicing in a financial advisor capacity is morally obligated to warn companies or consumers against becoming indebted if they are at a high risk of default. According to Liang (2007), biblical teachings provide many insights into the excessive use of debt in financial transactions. As confirmation, in
A Biblical Worldview would also provide many economic principles filled with wisdom. Such principles include protecting those
This paper will explore what a Biblical Worldview is and present a Biblical Worldview process of contracts, ownership and responsibility.
Stapleford accepted that financial aspects and morals are interconnected and that moral standards impact the conduct of both buyers and makers, also the plan of open strategies. This book is composed "from the point of view of Christian morals—Christian norms of conduct as found in Scripture." Stapleford perceives that adding moral contemplations to the effectively complex structure of market financial matters will add to the understudy 's workload, yet declares that it
-Martin Industries just paid an annual dividend of $1.30 a share. The market price of the stock is $36.80 and the growth rate is 6.0 percent. What is the firm's cost of equity?
In words Newark General Hospital had no affect of volume to the costs of the Hospital, so, there was no change in the volume, which leaded to higher cost.
Life insurance is meant to provide funds to replace a breadwinner's to protect and support dependents. Chad and Haley are dependents, not income providers. Therefore, the purchase of life insurance is unnecessary and not recommended. The Dumonts should use the money they would spend on policies for the children to increase their own coverage.
John E. Stapleford’s book called Bulls, Bears, and Golden Calves is a great insight into the Christian views of economics of today’s world and the way we view it. There are a number of points that Stapleford talks about in this book from biblical times to Christopher Columbus’ times. This book narrates just how Christians should behave and view the problems of the past and the problems of today. Overall, I feel the book is very in-depth and concise on the way some issues should be observed. Stapleford does a great job including references and bible verses to support his positions.
Quickly these corporations became known as the Fallen Angels and they were looking to rebound in any way possible. Operating managers at the time believed the corporations would rebound fairly easily because corporations would have no choice but to put all their attention on controlling their debt. However, in a situation such as this, close precision and execution is required otherwise the smallest mistake can lead to failure. According to Warren Buffet, “a plan that requires dodging them all is a plan for disaster.” The accumulation of debt continued to rise and not even the healthiest of corporations could obtain the capital to finance it. Even though businesses continued to suffer from accumulating debt, Investment Bankers noted that researchers found over time “higher interest rates received from low grade bonds had more than compensated for their higher rate of default.” From this information, Investment Bankers saw this accumulation of debt as an opportunity for investors. They concluded it was beneficial to have a diversified portfolio of junk bonds because the returns would be higher than a portfolio of high grade bonds. However Warren Buffet disagrees and discovered a hole in this fundamental approach by the Investment Bankers.
McFague and Solomon both relate religion to the current economy. Both authors seem to agree that there is something that can be done to help enhance our current economic state. Both authors advocate for the consideration of religious influence in the economy, and they both use different examples from religious texts to support their statements. McFague and Solomon use Christianity and Judaism respectfully. One of the points they both bring up is the way the poor is treated. McFague says".... how we treat needy bodies gives the clue to how a society is organized."(pg. 132) Along with this, Solomon says " No permanent remedy is readily available to heal the sickness of poverty and maldistribution of wealth."(pg. 114). In contrast with each other,
When examined through a semi-technical lens, the Bible designates a significant amount of passage-space to the discussion of economic matters. Many of Jesus’ parables and the book of Proverbs seem heavily focused on such a topic. However, the Bible is far from a standard textbook that could be used in an economics class. The Bible does not go into detail explaining economic principles such as monetary and fiscal policies, aggregate supply and demand curves, inflation, etc. Instead, from a Christian perspective, the Bible acts as a framework for our actions, attitudes, and views surrounding wealth and the actions taken by ourselves and others, including national governments. One crucial aspect of economics that proves to be a significant motivating
My father and uncles’ instilled a statement in my head from a young age that I will never forget. This statement is closely related to the Law of Legacy and very relevant to being a leader in the modern business world. The statement only consists of a few words, but these words are very powerful and if this statement is followed, your reputation as a leader will be respected and hopefully emulated. The statement is, “Lead by example, do what is right, be the best you can be, and treat others the way you would like to be treated.”
Financial leverage is a company's ability to pay its debt. It refers to the use of debt with the intention of increasing the potential return of an investment. This debt can increase returns on shareholder in good times and reduce them in bad times (Brealey, et al., 2012, p. 92). A Christian practicing in a financial advisor capacity is morally obligated to warn companies or consumers against becoming indebted if they are at a high risk of default. According to Liang (2007), biblical teachings provide many insights into the excessive use of debt in financial transactions. As confirmation, in Luke 14:28-30, you find these words:
We are providing below the assumptions and other calculations we used while computing the WACC and the cash flows.
Finally, in order to complete a more accurate comparison between the two projects, we utilized the EANPV as the deciding factor. Under current accepted financial practice, NPV is generally considered the most accurate method of predicting the performance of a potential project. The duration of the projects is different, one lasts four years and one lasts six years. To account for the variation in time frames for the projects and to further refine our selection we calculated the EANPV to compare performance on a yearly basis.
The National Bank of Greece, Deutsche Bank, and YF Securities all provided different offers for the purchase of major or controlling interests in Finansbank Turkish operations, which they derived using different valuation methodologies. A comparison of these valuation methodologies, insofar as they can be ascertained from published literature and other sources, provides an understanding of the appropriateness and influence of different financial considerations on overall valuations as seen from varying perspectives. A comparison of the three methodologies employed by the three competing institutions is provided in the following paragraphs.