Question

What contributed to McDonald's falling stock prices? Research the Internet and determine if they are higher or lower now than they were then. If so, by how much? Include in your discussion why GoPro stocks fell. Would it not be considered a good deed for a CEO to contribute his shares to a "charitable foundation?" What do you see happening here and why? Why did the owner of GoPro offer stock to begin with? Finally, what type of financing is stock and bonds, and what are the pros and cons of each?

Answer 1

McDonald's falling stock prices can be explained by the operational mishaps it has experienced during a span of couple of years. McDonald's (MCD) stock traded at $87.50 during the August of 2015.However, one year later McDonald's shares rose and began trading at $127.60.

GoPro stocks fell since consumer drones augment come with cameras, which depicts growth in the drone market and this could cannibalize GoPro's camera sales. No, it will not be considered a good deed for a CEO to contribute his shares to a "charitable foundation. This is because this practice to contribute shares to a charitable foundation will reflect a scheme to elude paying taxes.

Stocks highlight an ownership interest in a company whereas. Bonds outline a form of long-term debt where the issuing company promises to pay the principal amount at a certain date. The decreased tax rate, interest rates and ownership highlight the merits of bond financing. On the other hand, the cons of bonds financing is that it takes into account the credit rating, amount of collateral presented and high rates during repayment of this bonds financing. Availability of intellectual capital and flexibility in repayment highlight the benefits of equity financing. Time consuming nature implies the demerits of equity financing.