BUS600 Chapter 5 and 6 Summary + Class Notes - 10/22/2011

Lecture of 2 chapters { Chapter 5 and 6 }

Day5 - Quantitative Analysis (Page 159)

Taked about Group assignment this week (From ULearn):
Using at least three tools/concepts in the Quantitative Analysis and Finance Chapter, decide how are you going to fund your start up and why. Spend at least 30 minutes in your group, come to an agreement, upload 250-1000 words of your plan (mention the concepts/tools) to your learning journal. It is fine for each one to upload the same text, but variation and your own ideas are encouraged.

Class Notes:

Getting other people's money:
1) Sell Stock
2) Bond
3) Loan (must pay interest)

Learn 3 concepts and tools.

Goal:
Numbers & facts ==> Solve the problem systematically ==> Decision Making.

Tool 1) Decision Tree
Tool 2) NPV Page172-173
Tool 3) IRR Page 175
Tool 4) Bell Curve, statistics
Tool 5) Regression Analysis Page 189

Day 6 - Finance
Finance - Strategy & Decision Making
Accounting - Deal with Info and facts, book keeping, database

Business structure

• Proprietorship
• Partnership LLP
• Corporation { S-Corp, C-Corp }

C-corp pays double tax 40%, Stock - open market
S-corp 100 stock holder max

Beta  - Page 206
Bata = -1 Opposite of market movement
Bata = 0 Cash only

Index { ? }
S&P 500
Wilshaire 500
Nikki 225
Dow Jones 30 { Disney, GM, IBM, MS, Cisco, Amex, Coca Cora, etc.}

• Bonds (Bank interests vs Coupon, trade off )
• Stock Price/Earning P/E ratio, Growth rate, why earning = $0 but stock has value? because of  Book value (Assets)
• Option - Page 221 Buy/Sell before the stated date, advantage and risk

R Squared

http://en.wikipedia.org/wiki/Coefficient_of_determination

T Test

http://en.wikipedia.org/wiki/T_test