Deals in the M&A market are increasing. Name as many factors as you can that you think are driving the increase.
Carl Icahn wants Tim Cook (Apple’s CEO) to buyback $150 billion in stock, since Apple has so much liquidity on its balance sheet. Do you agree with Mr. Icahn’s reasoning? If you were Tim Cook, what considerations would you have before agreeing to buy back so much stock?
Are the banks doing anything “wrong” by releasing loan loss reserves? How would you be able to determine if it was wrong? Who might be hurt by such behavior if it is wrong?
If you were the CFO, what factors would you consider in deciding whether to hedge against price changes in commodities, against changes in interest rates, and against changes in foreign currency? Do you think investors assess a firm’s hedging program before making an investment decision?
In your opinion, should governments enact legislation to stop tax inversions and expatriations? Why? What would be some of the negative consequences of such legislation?
Samsung is being criticized by analysts for not being “shareholder friendly” and returning more cash to shareholders. Do you agree? How much cash “should” Samsung return to shareholders? Do you think whether Samsung returns more cash or not will have any affect on the share price?
Do you share the writer’s concern that Wall Street is now less attractive to top graduates? Have you changed your mind about a career in banking? If so, what would make such a career attractive again?
Do you agree with Microsoft’s plans for increasing the dividend and authorizing the share repurchase? What does this indicate about Microsoft’s growth options? Do you believe that the impetus to increase the dividend is to placate “activist shareholders”? How does one become an activist shareholder?
What does it mean to “manufacture” earnings growth via share repurchases? What is your assessment of earnings growth that is denominator driven rather than numerator driven?
How can the change in the accounting for deferred tax assets (and how they are used in calculating capital ratios) improve the balance sheets of banks in Spain and Italy? Should the accounting be changed? What is the downside?
AT&T has received approval to put $9.5 billion of its preferred stock into its defined benefit pension plan, in lieu of cash. How does this help AT&T? What would be your reaction if you were a pensioner and had worked at AT&T? What would be your reaction if you were an AT&T stockholder?
Do stock repurchases and a stock splits give different signals about a firm’s future? Do either of these change the underlying economics of the firm? If so, how?
If you were Tim Cook (CEO of Apple), how would you respond to Mr. Icahn’s effort to persuade Apple to increase the share repurchase program? How would you assess the usefulness of activist investors, such as Mr. Icahn, in improving the management of firms?
Why do you think Steve Ballmer announced his resignation as CEO of Microsoft? Why do you think Microsoft has agreed to appoint an activist investor to its board of directors? Name a few ways in which these governance changes will be manifested in future financial results (such as earnings, cash flows) and stock price.
Do you think the managers of public pension funds should make investing decisions to further social policies or to maximize returns to the funds? If you were the chief investing manager for a fund, what would guide you in your investing decisions?
Why do you think there has been so much turnover at the SEC? Would such a position as a regulator interest you? What skills do you think you would need to get a job there?
Congress compelled the PCAOB to back off the proposal to require auditor rotation. Why? Do you think Mr. Pozen’s idea of requiring a request for proposal (RFP) every 15 years is a good one? Why or why not? What problem is it supposed to address?
Why do you think the PCAOB wants to change the auditor’s report? Who would benefit from knowledge of the “critical audit matters”? How would they benefit? What are potential downsides to requiring auditors to report such information?
What exactly is the problem with equity research analysts’ involvement with bankers who want to underwrite an IPO? Who gets hurt by this relationship between the analysts and the bankers? What should be done to alleviate the problem?
Why do stock prices jump even when a firm (such as Telsa) reports a loss? What role does “expectation” play in stock prices? Do you think the market reacts more to GAAP results or non-GAAP results? If you think the latter, what does this suggest about the relevance of GAAP?
