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Description: When night falls in remote parts of Africa and the Indian subcontinent, hundreds of millions of people without access to electricity turn to candles or flammable and polluting kerosene lamps for illumination. Slowly through small loans for solar powered devices, microfinance is bringing light to these rural regions where a lack of electricity has stymied economic development, literacy rates and health.

Source: Reuters.com

Date: 10/27/2009

Link:  http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE59Q01J20091027

Questions for discussion:

  • What are the benefits of microfinancing of electricity?
  •  Is microfinancing a viable alternative to large-scale government capital budgeting projects? Explain your answer.
  • What are the economic ramifications for economic development if microfinancing grows in popularity?

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Description: Dutch bancassurer ING will split in two, transforming itself into a smaller European lender in the most striking example yet of the deep changes that EU policymakers want to force on banks that received state aid.

Source: Reuters.com

Date: 10/26/2009

Link: http://www.reuters.com/article/innovationNews/idUSTRE59P0U020091026

Questions for discussion:

  • Summarize the financial structural changes coming to ING.
  • Do you think the bank was responsible for its own financial weakness or was it simply another victim of the credit crunch? Explain your answer.
  • Has the treatment of U.S. banks by regulatory authorities been similar or different?
  • How has ING stock performed recently?

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Description: Iceland’s McDonald’s Corp. restaurants will be closed at the end of the month after the collapse of the krona eroded profits at the fast-food chain, McDonald’s franchise holder Lyst ehf said.

Source: Bloomberg.com

Date: 10/26/2009

Link: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNNKbYNHF_Og

Questions for discussion: 

  • Explain why businesses that are dependent on imported materials are at greater financial risk during a currency crises?
  • What alternatives are available to management besides closing down operations?

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Description:  Sergei Brin and Larry Page share the No. 1 spot on Fortune’s list of top young businesspeople.

Source: CNNMoney – video report
 
Date: 10/21/2009

Link: http://money.cnn.com/video/fortune/2009/10/21/f_40_under_40_overview.fortune/

Questions for discussion: 

  • Is there a common denominator that connects these business people?
  • Do you think being young has contributed to their business insight and success? Explain your thinking.

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Description: Stock soars 10% after the software giant’s earnings and revenue beat analysts’ forecast. Sales fell 14% to $12.9 billion, declining for the third quarter in a row.

Source: CNNMoney.com

Date: 10/23/2009

Link:  http://money.cnn.com/2009/10/23/technology/microsoft_earnings/index.htm?postversion=2009102311

Questions for discussion:

  • Explain why Microsoft’s cash flow and other financial metrics are expected to improve?
  • Do you believe Microsoft stock values are likely to be higher over the next year? Explain your answer.

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 Description: Potash Corp of Saskatchewan (POT.N) (POT.TO) said on Thursday quarterly profit fell 80 percent as fertilizer demand and pricing weakened, prompting it to dim its outlook for the sector and sending shares lower.

Source: Reuters.com

Date: 10/22/2009

Link: http://www.reuters.com/article/basicMaterialsSector/idUSN2250573820091022

Questions for discussion:

  • As a financial manager of a commodity firm, would you wait until demand picks up again in 2010, as suggested in the article, or would you cut price to boost sales? Explain your thinking.
  • Why has the stock price not collapsed given the poor financial situation?
  • Would you be looking at mergers and acquisitions of other potash miners? Explain your thinking.

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Description: President Barack Obama called small businesses the “engine” of the U.S. economy and said too many are still struggling to get the credit they need to operate.

Source: Bloomberg.com

Date: 10/24/2009

Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=a7zcW8m3pMH0

Questions for discussion: 

  • Why would banks be slow to provide more credit to small businesses at this time? Explain your answer.
  • Do you think banks are being prudent in their caution to lend to small businesses? 
  • What do small businesses typically finance through bank loans?
  • How can government encourage greater borrowing by small businesses?

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Description:  Wide credit spreads and lack of competition boost profits at Goldman Sachs and JPMorgan.

Source: CNNMoney – video report
 
Date: 10/16/2009

Keys:  Stock valuation (p281), Financial environment (p27), Cash flows (p355)

Link: http://money.cnn.com/video/markets/2009/10/16/mkts_ss_banks_credit_fbr.cnnmoney/

Questions for discussion: 

  • Summarize the reasons for bank success this quarter and the reasons for concern in the future?
  • How does banking financial success or failure affect corporate borrowers? Explain your answers.

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Description: It’s officially official. The Obama administration on Friday said the government ran a $1.42 trillion deficit in fiscal year 2009.

Source: CNNMoney.com

Date: 10/16/2009

Keys: Bond valuations (p249), stock market (p281)

Link:  http://money.cnn.com/2009/10/16/news/economy/treasury_deficit/index.htm?postversion=2009101617

Questions for discussion:

  • How might this information influence financial managers planning for the near future? Explain your answer.
  • If government bonds should squeeze out corporate borrowing, how might businesses react? Explain your answer.

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Description: It isn’t often that big blue gets a black eye. But on Friday IBM (IBM.N), the leading U.S. technology firm known for its conservative management, found itself entangled in the largest ever hedge fund insider-trading scheme involving Galleon Group founder Raj Rajaratnam.

Source: Reuters.com

Date: 10/16/2009

Keys: Capital budgeting decisons (p311), Stock market (p281)

Link: http://www.reuters.com/article/technologySector/idUSN1642835520091016

Questions for discussion:

  • How do you think this scandal might affect these firms’s stock value in the near and long term? Explain your answer.
  • Do you expect this to affect capital budgeting decisions by current or potential customers? Explain your answer.