After all foreign and U.S. taxes, a U.S. corporation expects to receive 3 pounds of dividends per share from a British subsidiary this year. The exchange rate at the end of the year is expected to be $1.33 per pound, and the pound is expected to depreciate 3% against the dollar each year for an indefinite period. The dividend (in pounds) is expected to grow at 8% a year indefinitely. The parent U.S. corporation owns 9 million shares of the subsidiary. What is the present value in dollars of its equity ownership of the subsidiary? Assume a cost of equity capital of 12% for the subsidiary. Do not round intermediate calculations. Round your answer to the nearest dollar.

During the global financial crisis, the U.S. enacted expansionary U.S. monetary policies that led to lower interest rates in that country. Use the IS/LM/BP model to show the impact of the lower interest rates on foreign economies, and the choices that different exchange rate regimes (fixed vs. floating) presented them.

During the U.S. financial crisis of 2007 the U.S. government pursued an expansionary macro economic policy. The role of government expanded and huge sums of money was pumped into the economy. On top of that the Federal Reserve lowered interest rates to historical lows in order to create liquidity in the credit markets. The Fed's action of pumping $600 billion gradually into the economy was met with much skepticism from Asian and European nations.

At the time, Germany stated the United States is forcefully lowering the value of the dollar by pumping more money into the economy and the Fed's action is no different than China manipulating the yuan. The EU feared the U.S.'s monetary easing will put increased pressure on weak European economies (the PIIGS - Portugal, Ireland, Italy, Greece, & Spain) and cause their currencies to appreciate in relation to the dollar.

Emerging market nations (India, China, Vietnam, Thailand, and South Korea) believed the lowering of the value of the dollar would cause huge captial inflows that risked creating inflation in their economies.

Was Germany and Europe's concerns valid? Should the rest of the world fear the possibility of the dollar being valued less than their home currencies?

After all foreign and U.S. taxes, a U.S. corporation expects to receive 5 pounds of dividends per share from a British subsidiary this year. The exchange rate at the end of the year is expected to be $1.29 per pound, and the pound is expected to depreciate 7% against the dollar each year for an indefinite period. The dividend (in pounds) is expected to grow at 12% a year indefinitely. The parent U.S. corporation owns 9 million shares of the subsidiary. What is the present value in dollars of its equity ownership of the subsidiary? Assume a cost of equity capital of 12% for the subsidiary. Do not round intermediate calculations. Round your answer to the nearest dollar.

U.S. public firms currently report their financial results quarterly. If the SEC wants the U.S. capital markets to be as efficient as possible, do you think it would be worthwhile to require more frequent reporting (perhaps monthly)? Or would be better to require less frequently reporting (twice a year or once a year)? Be sure to explain your reasoning.

Suppose the following conditions exist between the U.S. and Canada. U.S. interest rate = 3.22%. Canadian interest rate = 3.1%. Spot rate: 1 CAD = .9601 USD. 6 month forward rate: 1 CAD = .9622 USD. Are the conditions of interest rate parity violated? If so, what would be our profit if we engaged in covered interest arbitrage with $10M?

U.S. wars in Iraq and Afghanistan, political unrest in South America, growing U.S. antipathy  in Iran, and civil wars in Africa have driven crude oil prices up several times in the last several years.  Although oil prices fell significantly in 2011, they are expected to rise again as the world economy recovers. Adding to the uncertainty, it is predicted that natural gas prices, which fell in concert with significant new gas field discoveries, will rise as more and more utilities switch from using coal or oil to natural gas.

Suppose you are the manager of a public utility that supplies electricity to a significant portion of your geographic region. You preside over electrical generation facilities that can produce electricity using either natural gas or oil, or some combination of both.

In the past several years, you have been faced with skyrocketing, then plummeting, natural gas prices, and now think you face the possibility of more of the same, coupled with the probability of similar volatility in oil prices.

Having been trained in Managerial Economics, you are familiar with production functions, isoquant and isocost analysis, and other tools of microeconomics. How can you use these tools to decide the best path for your company to pursue? What are the pros and cons of using these tools?

1. Suppose that the U.S. International Trade Commission (USITC) is considering using trade policies to protect U.S. wheat farmers/producers. The USITC plans to use the following trade policies: (i) an export subsidy (ii) a production subsidy; (iii) an export tariff; and (iv) an export quota. Assume that the U.S is a small Home country in the world market for wheat.

a. As an international trade lobbyist for U.S consumers and taxpayers, which two of the four forms of trade policies would you strongly support and why? [20%] [ Approximately 200- 400 words]

b. From the remaining two forms of trade restrictions, which one would you oppose strongly and why? [10%] [ Approximately 100- 200 words]

Draw the graphs to explain the changes in consumer surplus, changes in producer surplus, changes in government revenue and the net welfare loss due to each of the trade policies that you have selected. Be sure to discuss other important differences among the trade policies for the organization that hired you as a lobbyist.

Which would increase U.S. GDP?

Group of answer choices

An increase in charitable contributions by U.S. citizens

A garage sale with all used items

An increase in prices in the foreign market

None of the above

The average annual income for a female in Wisconsin is $38,000, while for a male it is $45,000. If prices rise by 2% next year and salaries of both females and males rise by 2% we can expect

Group of answer choices

No change in nominal income while real income rose

No change in nominal income and no change in real income

Nominal income rose and no change in real income

Nominal income rose while real income fell

The amount of unemployment that is normal or unavoidable is due to

Group of answer choices

The mismatching of candidates to a job and the time lags involved in labor market adjustments

The voluntary idleness of those who choose not to seek employment

The ups and downs in the level of economic activity in the economy and the time lags involved in labor market adjustments

The impact of foreign competition on our domestic job conditions and the lack of demand for domestic goods and services

You’ve Got Mail…and You’re Fired! The Case of RadioShack No one likes to receive bad news, and few like to give it. In what is heralded as one of the biggest human resources blunders of 2006, one company found a way around the discomfort of firing someone face-to-face. A total of 400 employees at the Fort Worth, Texas, headquarters of RadioShack Corporation (NYSE: RSH) got the ultimate e-mail message early one Tuesday morning. The message simply said, “The work force reduction notification is currently in progress. Unfortunately, your position is one that has been eliminated.” Company officials argued that using electronic notification was faster and allowed more privacy than breaking the news in person, and additionally, those employees who were laid off received generous severance packages. Organizational consultant Ken Siegel disagrees, proclaiming, “The bottom line is this: To almost everyone who observes or reads this, it represents a stupefying new low in the annals of management practice.” It’s unclear what, if any, the longterm effect will be for RadioShack. It isn’t just RadioShack that finds it challenging to deal with letting employees go. Terminating employees can be a painful job for many managers. The communication that takes place requires careful preparation and substantial levels of skill. BusinessWeek ethics columnist Bruce Weinstein suggests MAN 1163_2 (April 4 th, 2020) © 2020 LAMBTON COLLEGE IN TORONTO that anyone who is involved with communicating with downsized employees has an ethical responsibility to do it correctly, which includes doing it in person, doing it privately, giving the person your full attention, being honest but sensitive, and not rushing the person. Some organizations outsource the job of letting someone go to “terminators” who handle this difficult task for them. In fact, Up in the Air, the 2009 movie starring George Clooney that was nominated for six Oscars, chronicles changes at a workforce reduction firm and highlights many of these issues. Downsizing has been referred to using many euphemisms (language that softens the sound of the word) for termination. Here are just a few ways to say you’re about to lose your job without saying you’ve been fired: • Career alternative enhancement program • Career-change opportunity • Dehiring staff • Derecruiting resources • Downsizing employment • Employee reduction activities • Implementing a skills mix adjustment • Negative employee retention • Optimizing outplacement potential • Rectification of a workforce imbalance • Redundancy elimination • Right-sizing employment • Vocation relocation policy Regardless of how it’s done or what it’s called, is downsizing effective for organizations? Jeffrey Pfeffer, a faculty member at Stanford and best-selling author, argues no: “Contrary to popular belief, companies that announce layoffs do not enjoy higher stock prices than peers—either immediately or over time. A study of 141 layoff announcements between 1979 and 1997 found negative stock returns to companies announcing layoffs, with larger and permanent layoffs leading to greater negative effects. An examination of 1,445 downsizing announcements between 1990 and 1998 also reported that downsizing had a negative effect on stock-market returns, and the negative effects were larger the greater the extent of the downsizing. Yet another MAN 1163_2 (April 4 th, 2020) © 2020 LAMBTON COLLEGE IN TORONTO study comparing 300 layoff announcements in the United States and 73 in Japan found that in both countries, there were negative abnormal shareholder returns following the announcement.” He further notes that evidence doesn’t support the idea that layoffs increase individual company productivity either: “A study of productivity changes between 1977 and 1987 in more than 140,000 U.S. companies using Census of Manufacturers data found that companies that enjoyed the greatest increases in productivity were just as likely to have added workers as they were to have downsized.” Please Answer the Following 5 Questions: 1. What communication barriers did RadioShack likely experience as a result of terminating employees via the communication method used? 2. What do you think RadioShack’s underlying motivation was in using this form of communication? 3. What suggestions for the future would you give RadioShack when faced with the need to dismiss a large number of employees? 4. How has technology enhanced our ability to communicate effectively? In what ways has it hindered our ability to communicate effectively? 5. What ethical challenges and concerns do you think individuals involved in downsizing have?