Treasury Securities and Stocks Essay Example | Topics and Well Written Essays - 1000 words

Treasury Securities and Stocks - Essay Example This paper highlights that the U.S. Treasury Securities are accredited the U.S. government, and thus they are considered risk-free. The U.S. Treasury market is liquid and large with an agreement of an active repurchase in place. In addition, the faith placed on a security market depends on the credit rating of a nation, which is based on the borrowing and repayment history of the government. The repayment ability is based on the economic strength of the country. On the same vein, the U.S. has been rated under the highest credit ratings, AAA, by Standard and Poor’s, a credit rating institution. This positive rating is attributed to the fact that the U.S. is the most powerful economy across the globe. Given this, the Treasury securities of the U.S. are deemed to be risk-free and policy analysts, macroeconomic builders, investment bankers and financial analysts trust the U.S. Treasury Security rates when developing their forecast models. The rates on the U.S. Treasury Securities have an impact on the financial conditions throughout the world. As the study outlines   the repayment of the U.S. government’s debt can be hindered by a massive economic downturn. Despite its occurrence in rare circumstances, an economic downturn hit the U.S. in the form of a world-wide financial crisis in 2008. It was thought that this would make the benchmark rates of the U.S. Treasury to cease being risk-free. Nevertheless, the U.S. government upheld its faithfulness with its investors by purchasing some of the securities that it had issued. Besides, the government printed additional money and increased taxes so as to finance its debts.

Advanced Financial Management Essay Example | Topics and Well Written Essays - 2500 words

Advanced Financial Management - Essay Example Dividend Policy derived from the type of capital structure chosen by the company also affects the value of the company’s stock to a great extent that in turn may enhance the company’s bottom line. For this paper, the financial & investment strategies of The Walt Disney Company will be discussed in order to understand financial blueprints taken by the company from time to time & its effects on the company. Walt Disney is the second largest mass media company in the world with headquarter in California, United States. The common stocks of Disney are traded on New York Stock Exchange (NYSE) with a ticker symbol of DIS. As per the records, last time the company had paid dividend was on 16th of January, 2013 to all its shareholders. In the last financial year of 2013-14, the company has shown substantial financial improvement in terms of return on investment & shareholders, subsidiaries & joint ventures’ perspective. The company ranks 17th on Forbes in the list of most valuable brands with as low as 3% default risk as compared to their peer companies. In July, 2014 the US dollar bonds issued by the company were heavily traded as corporate fixed rate bonds near the best value. As a result of an exceptional trading volume of $ 28.9 million on 11th & 14th of July, 2014, Walt Disney became 16th most actively traded corporate bond issuer in the current financial year of 2014-2015 (Verma , 2012). The capital structure shows how a firm can finance its overall operations through optimum utilization of their sources of funds. Main sources of funds can be classified under Debt & Equity. Equity includes common stock, retained earnings & preferred stocks whereas debt includes bonds & bills i.e. long term payables (Baker and Martin, 2011). Using more debt instruments in the capital structure of a company increases the riskiness for the company due to continuous interest payment & obligation for payment of principle in long run. However, higher proportion of