Respond to the peer discussion below,

• Advance the conversation; provide a real-world application and experiential examples;
• Conceptually discuss your key [most significant] learning insight or take-away from the selected forum topic comments.
• Responses should be supported by at least one reference outside of the textbook

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Please reflect on your key course learning outcomes and experiences. How has our course altered the way you think about corporate finance? Include one major idea, takeaway, or example.

Discussion 1:

Take Away

These eight weeks in "Corporate Finance" have flown by. This has been the first course I have taken that didn't follow the "cut and paste" format from other courses I have taken. I have found great value in this course and what was presented by "Mr. M". One of the best experiences I had was having the great feedback on all our homework and assignments. Allowing for these types of corrections has helped me strengthen my understanding of any given assignment. I also feel real time responses is quite beneficial to my learning. I have had instructors that I have had difficulty getting a hold of, however this was not the case for this course. I also enjoyed the zoom calls because I feel it not only allowed me to relate to my professor but it allowed for a quick clarification on any questions I might have had pending.

I used to think corporate finance was simply how investment decisions were made by companies or corporations. As the course emerged and we dove into new topics I learned in depth the different levels it has to offer and how they all work together like a well oiled machined. Roles of insurance stood out vastly to me as I didn't realize how many different types of insurance there are to not only help the company but help the consumer.

The biggest takeaway for me would be how inter related all aspects in finance are. There are not separate roles but each in turn relays on each other for optimum performance. Important roles include financial planning, forecasting, risk management, capital structure optimization, investment decision making, cost reduction, and efficiency improvement (fundwise, 2023). Corporate finance plays a "crucial role in driving business growth, profitability, and financial stability" (fundwise, 2023). A business that can identify the value corporate finance plays in its business model can have the upper edge in a competitive market.

References:

fundwise. (2023, November 7). Benefits of Corporate Finance: Enhancing Business Growth and Profitability. Welcome to FundWise. https://fundwise.uk/benefits-of-corporate-finance/

Discussion 2:

Advanced Corporate Finance has provided more clarity about the components of capital structure, and how capital structure interacts with the cost of capital and the required rate of return. Also, it provided clarity behind the nature of operations, and the related capital structures associated with them. Possessing an understanding of capital structure in relation to industrial norms, the cost of capital associated with it's structure, as well as the enterprise's ability to service it's debt obligations through operational performance are very foundational aspects of valuing, and "sizing up" risk. However, I also think this course has shined a light on irresponsible fiscal spending by the US government and other global governments through the world, and the related effects of excessive financial stimulus. According to an article by the International Monetary Fund, public debt as a fraction of gross domestic product has increased significantly in recent decades, across advanced as well as emerging and middle-income economies. It is expected to reach 120 percent and 80 percent of output respectively by 2028 (Adrian et al., 2024). With Debt to GDP levels rising globally and nationally in the US and interest rates at fiscally restrictive levels, that places an increasing amount of financial pressure on middle class families who on average have less disposable income. The combination of higher interest rates, high governmental debt levels, and sticky inflation, it puts the Federal Reserve in a tough position to make a correct decision regarding fiscal policy because either action they take will have negative consequences. If they lower interest rates to ease the burden of their fiscal deficit. they could reignite inflation which could further diminish the purchasing power of the middle class by increasing food and commodity-related costs. If rates remain elevated, the US' ability to service a growing fiscal deficit will deteriorate and we would likely the reflection of that in yields on US debt, which could even further hinder it's ability to service deficits. This course has certainly provided with insight into financial policies, and how that relates with federal fiscal policies. That indirectly has enhanced my understanding of policies, and the related financial effects with policies

References

Adrian, T., Gaspar, V., & Gourinchas, P.-O. (2024, March 28). The fiscal and financial risks of a high-debt, slow-growth world. IMF. https://www.imf.org/en/Blogs/Articles/2024/03/28/the-fiscal-and-financial-risks-of-a-high-debt-slow-growth-world