Merck’s goal is to deleverage, yet M&A is crucial to pharma growth. So, if you were CEO/CFO, how would you find a balance?
Do you think Elon Musk’s compensation package is “optimal”? For whom? How would you structure his compensation package?
If you were CEO/CFO and repatriated cash, what would you do with the money? How would you decide? What pressures would you face from the different constituencies?
Why do you think firms may be inclined to stay private for longer, and, for funding needs, tap private equity capital through the Goldmans, et al.?
How might GE’s culture of so-called “success theater” have contributed to potentially aggressive accounting (revenue recognition) practices? What systems may help control such tendencies, if they are indeed problematic?
What is the deferred tax consequence, if any, if firms are required under the new tax law to capitalize R&D, but still expense R&D on the income statement? What are the potential valuation effects (stock price effects), if any?
How would you make the adjustment to earnings (and maybe cash flows) to compare “apples to apples”, for the effect of the new tax law, which transitions to a territorial system, but not before imposing a one-time tax on overseas accumulated profits? What, if any, are value implications for these firms?
How will the higher costs (expenses) be reflected in the financial statements? What ratios will be affected? How do you think stock prices will react?
The disclosure of CEO pay to the median employee pay was part of Dodd-Frank, and consequently appears to have been imposed “top-down” from Congress/regulatory agencies, rather than “bottom-up”, that is demanded by investors. Why do you think this is the case?
Do you agree with the broader view of capital? What are some of the implications for financial accounting and reporting?
Do you think BlackRock is “right” to require firms to discuss these societal issues, in addition to financial metrics? Why or why not? What is BlackRock hoping to achieve? Is this the best way for BlackRock to achieve its goals?
Is repatriating cash to the US that is overseas “bad”? From whose perspective? Why do you think the author used the term “specter” in describing repatriation?
How does one “know” that shares are overpriced? Can you list and interconnect all the parts of the argument?
GE is planning to record a $6.2 billion charge for underestimating a liability for longterm care insurance policies sold years ago. How do you think this amount was estimated? What does the charge signify in terms of earnings, cash flows, the value of GE stock?
Dropbox is planning to IPO. Do you agree with the statement that public firms are perceived to be “more stable” than private firms? Why or why not? What do you think is meant by “stable”?
The new tax law reduces rates for corporations from 35% to 21%, yet many firms, especially banks, will be recording sizable losses in their 2017 4th quarters. Why?
How many factors that affect the DB pension funded ratio can you identify? What industries, do you think, have higher funded ratios? Why might that be the case?
If you were the founder of a company, what are the factors you would consider in deciding whether to IPO or direct list? Do you think more firms, like Spotify, will choose to direct list? Why or why not?
Tim Cook received $102 million in total compensation for the latest fiscal year. Is this about right? Too much? Too little? How would you determine what is the optimal amount and the optimal components of his pay?
How would you determine the optimal amount of debt and the appropriate amount of advisory service fee? What are factors other than the debt load that could lead a firm to file Chapter 11?
