If you were GE’s CFO, would you be trying to pay down debt? Why or why not? If so, would you go about it in the same way?
If you were CFO, how would you set the budget for share repurchases? What factors would you consider? What are the accounting ramifications?
For the stock buybacks, where did firms’ excess cash come from to buy back the stock? Does it matter if it was from internally generated cash flows, or if it was borrowed? What are the future implications?
How do you decide (as CFO) what to do with the all the cash? How would you describe the effects of governmental fiscal policy in making capital allocation decisions?
So AstraZeneca decided to raise capital with “expensive equity” rather than “cheap debt”? Why would the firm decide to go this route? Do you agree with the decision?
Do you consider litigation risk when deciding whether to invest in VW bonds? How much of a premium do you think you would need to entice you to invest? How would you measure the premium?
If you were the new CFO at Netflix, how would you decide on the “optimal” capital structure, given the timing of cash flows, development time for new content, interest rate uncertainty, and bond ratings?
For many years, debt was cheap capital, so many firms loaded up. But, too much of a good thing can make one sick. How much is too much?
Do you agree with some of the opinions that Apple lost $9 billion on share repurchases? Why or why not?
How would you determine whether corporate balance sheets are “too” levered? What benchmarks would you use? What are the risks of too much debt, both for the firm and for the economy?
What are your thoughts about the “pecking order” of capital and how it may have played a role in the bankruptcy?
Tesla seems to be renegotiating with vendors after sales have been booked. What are the accounting implications from Tesla’s perspective? From the vendor’s perspective? What ratios are affected by longer payment terms and by rebates? What other sources of capital are available for Tesla at this point?
If you were an adviser to Saudi Arabia’s Crown Prince, what would your advice be about investment in technology in general, and about Tesla in particular? What kind of ROI do you believe he has in mind?
Merck continues with a financial goal of deleveraging its balance sheet. Why? How would you determine a target? Do you think the amount of debt varies by country? Merck also has increased its hedging activity against currency volatility. Do you think there is a connection between target leverage and hedging activities in so far as aversion to risk?
Tesla is “burning cash,” yet CEO Musk does not want to address questions about capital needs. What do you think you would propose to him as sources of capital, should it be required? How would you decide on the mix of debt/equity?
So some firms need cash to invest in growth so they are selling “underperforming” assets. Do you think that maybe years of using cash flow to buy back stock has put some companies in this position? Why do firms buy back stock?
Dropbox prices its IPO at $21, and offers shares to the public with 1 vote per share, yet retains 10 votes per share for the founders and select investors. Do you think the price per share incorporates different voting rights? Should the SEC prohibit, or perhaps sunset, dual class structures? Why or why not?
Operating leases are coming on-balance-sheet next year, so rating agencies will not have to estimate the liabilities for credit rating purposes. What are possible consequences if their estimates are or have been right or even close? Far off?
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?
