ENG 101 essay 2
Essay 2 Instructions and Checklist – Ethical Argument
In preparation for Essay 2 and by completing your textbook readings, you will be equipped to respond by objectively compiling information from a variety of sources to compose an essay demonstrating that you understand and practice reading, writing, and rhetoric within the context of a biblical worldview; apply methods of sound reasoning; produce well-structured essays; integrate sources accurately and effectively; write with clarity; recognize standard usage in English grammar, word choice (diction), phraseology, and sentence structure; and apply knowledge of sentence structure to basic sentence editing and revision (Syllabus MLOs: A, B, C, D, E, F, G and Module/Week 5 LOs: 1, 2, 3, 4, 5).
In Module/Week 5, you must write a 1,000–1,200-word ethical argument essay from the thesis/outline that you submitted in Module/Week 4. Please note the word count does not include citations.
Efficient Capital Markets
- Describe an efficient capital market for stocks.
- Compare and contrast the weak form of market efficiency with the strong and semi-strong forms.
- Explain the relevance of market efficiency for financial managers.
- Distinguish how maximizing the value of the corporation differs from maximizing shareholder interests.
- Explain how leverage can improve returns to the shareholders.
- Describe the impact of corporate taxes on the weighted average cost of capital.
- Distinguish between direct and indirect costs in a corporate bankruptcy.
- Describe agency costs and the impact on bondholders.
Capital Market Efficiency
Explain in 525 words what it means to have efficient capital market, including:
- Describe the behavioral challenges in achieving efficiency.
- Discuss the three forms of market efficiency.
- What are the implications to corporate finance?
- Would you consider the real estate market an efficient capital market? Please explain why or why not. include a minimum of two references
Scenario: Hightower, Inc. plans to announce it will issue $2.0 million of perpetual debt and use the proceeds to repurchase common stock. The bonds will sell at par with a coupon rate of 5%. Hightower, Inc. is currently an all-equity company worth $7.5 million with 400,000 shares of common stock outstanding. After the sale of the bonds, the company will maintain the new capital structure indefinitely. The company currently generates annual pretax earnings of $1.5 million. This level of earnings is expected to remain constant in perpetuity. The tax rate is 35%.
- Construct the company’s market value balance sheet immediately after the announcement of the debt issue.
- 150 words. Any calculations should be done in excel