Read the case study "eBay Inc.: Internet Success or Fairy Tale? "and answer the question below
Question 1
Discuss the following questions about the case study:
1. Use the 2002 financial statement data to replicate the Meyer's report calculations that illustrate the conclusion based on the 2001 data reached in the report: eBay has never been profitable. Explain your reasons.
2. Do you agree with Meyer's report concept of 'unfettered' cash flow? Explain your reasons.
3. What other conclusions can you reach about the company from the case study?
4. Why is it sometimes misleading to compare a company's financial ratios with those of other firms that operate in the same industry?
Please limit your postings to 100-200 words.
Question 2 Not Base on Meyers report
Bonds and interest rates
Throughout this subject, many discussion opportunities come up where you need to respond to other people's opinions and comments. Please take this opportunity to discuss the topic below after you have completed your reading.
1. Discuss the relationship between the price of a bond and interest rates. Why does the price of a bond change over its lifetime? Please offer a quantitative example to demonstrate this relationship.
2. In the real world, is it possible to construct a portfolio of stocks that has an expected return equal to the risk-free rate? Provide examples.
Question 3
Portfolio analysis
Throughout this subject, many discussion opportunities come up where you need to respond to other people's opinions and comments. Please take this opportunity to discuss the topic below after you have completed your reading.
1. Research and define technical analysis and fundamental analysis. Provide examples of each type of analysis. Which style of analysis makes the most sense for the long-term investor?
2. Conceptually, how does an investor choose their optimal portfolio? What criteria should be used? Discuss your reasons
Question 4 Capital budgeting
1. From a financial manager's perspective, discuss the capital budgeting process used to identify projects that add to the firm's value. How do capital budgeting decisions help to define a firm's strategic direction?
2. When two mutually exclusive projects are being compared, explain why the short-term project might be higher ranked under the NPV criterion if the cost of capital is high; whereas, the long-term project might be deemed better if the cost of capital is low. Would changes in the cost of capital ever cause a change in the internal rate of return (IRR) ranking of two such projects? Explain your answer.
Question 5 Capital structure
Throughout this subject, many discussion opportunities come up where you need to respond to other people's opinions and comments. Please take this opportunity to discuss the topic below after you have completed your reading.
How does a firm's capital structure relate to your personal capital structure? In what ways are they similar? Provide examples of how you use debt and equity in your personal financial life that parallels the basic capital structure decisions made by a firm