To make corporate finance decisions

Corporate Finance Decisions
Name
Institutional Affiliation
School Versus Work
The bond coupon rate (4.25%) means that I will receive 4.25% × 100,000 = $4,250 yearly.
In the 5th year, the bonds will reach maturity and I will receive the coupon plus the amount invested. The bond cashflows are thus given as:
1st Year = $ 4,250
2nd Year = $4,250
3rd Year = $4,250
4th Year = $4,250
5th Year= $104,250 (100,000+4,250)Total Cashflows = $121,250The percentage yield will be 21250/100000*100= 21.25%Stocks Cash flows
Apple stocks: Current market price =$ 215.04 (Yahoofinance.com)
market price 1 year ago= $164.00
Dividend payout= $0.73
Total return= ((215.04+0.73*4)-164) *100/164=32.90 %
Advantage of selling a combination of Stocks & bonds:
i. Regular income will remain come from the bonds.
ii. Capital appreciation on the stocks will result in the higher value of the investment.
The disadvantage of selling a combination of Stocks & Bonds:
i. It will be compromising the fixed return on Bonds, and the chances of getting higher returns on capital appreciation are limited.
c) As the computations reveal, the Apple stocks will yield higher than the EE bonds. Although the bonds are secure, by the time they become mature, the Apple stocks will have appreciated more than the bonds, and so I would instead sell the bonds. Additional information is attached in Appendix 1: about the Apple price monthly appreciation.
d) Accepting the job will mean that after five years, I will have a return of 21.

25% from the fixed bonds, and an upper of 32.9% from the stock’s investment.
2. Bonus Versus Stock
a) Mathematically, the best choice presented by the above situation could be taking the bonus money considering that money loses value with time and that the value it has today will have depreciated in future (Berk & DeMarzo, 2017).
b) advantages
The stocks are a form of investment, and they will pay dividends while the bonus will not.
The bonus cash received can be used for personal expenditure while the stocks cannot.
There is a possibility of the stock value appreciating while the amount of money will depreciate.

The cash received today has more value than the stocks.
c) I would select the shares rather than the cash bonus as the stock present as an investment which will have future cash flows, and with the stock certificate, I can even request for a loan. The stocks may also increase their value over time.
3. Compliance
a) A. The 1933 Act takes a strict stand and directly prohibits any offers to issue stocks before filing for the registration of a firm. The Act provides that an aggrieved party can sue for damages on the basis civil liability from the omissions and errors in the statement of registration or to any offer made to unsuspecting person, but which violates the law, whether registered or not. The Act has further an antifraud unit which deals with deceitful and fraudulent activities concerning the sale of shares by firms. An investor who had acquired or acquires stocks before the registration is filed, or on untrue basis or fraudulently duped into acquiring the shares, has the option of suing upon realization. The investor may be compensated the price differences between the time of purchase and the real time or case time. Concerning my case, I would need to prove beyond reasonable doubt that at the time of acquisition, I relied upon an untrue statement which had materially misstated facts leading to the loss of an equivalent amount to stocks $5,000.
b) Finance managers should be well versed with tax related complexities and case law. The business should be fair and cooperative with the authorities and never use a practice of tax evasion. So, it is the role of a finance manager to fulfill all the requirement of the government and reasonably manage the company with accurate and correct disclosure of all things. It is the responsibility of the manager to use all the ethical business practices and run a business to the most significant common advantage of the society. For the stockholders, it is the responsibility of a finance manager that he or she must ensure that they maximize their wealth and the firm grows so that stockholders get long-term gain in their stake in the company.
Reference
Berk, J. & DeMarzo, P. (2017). Corporate Finance, 4th Ed. Pearson Education Ltd, England.
Appendix 1: Apple Share0 Price movements