Dividend Yield

ANSWER ALL RESPONSES.

 

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150 WORDS TO EACH QUESTION. RESPOND TO ALL BELOW. MUST HAVE AT LEAST 1 REFERENCE AND MUST BE CITED IN THE RESPONSE WHERE THE REFERENCE WAS USED.

 

Question 1(Michael)

Dividend Yield= Annual Dividend/ Current Share Price
 
Quarterly Div 1.64
x4 to be annual dividend 6.56
current share price 116.66
Dividend Yield 5.6%
required rate of return= (divident yr 1/ stock price) + growth rate
 
Dividend 6.56
stock price 116.66
growth rate 0.05
required rate of return 11%
(Block 2019)
IBM  P/E ratio 22.08
(Yahoo Is Part of the Yahoo Family of Brands, 2021a).
HP P/E ratio 9.88
(Yahoo Is Part of the Yahoo Family of Brands, 2021b).
Xerox 13.16
(Yahoo Is Part of the Yahoo Family of Brands, 2021c).

 

 

For this discussion, I am attaching a figure above showing all my calculations. IBMs competitors Xerox and HP show P/E lower than IBM at 13.16 and 9.88 respectively, shown in the graphic. While many factors impact the Price Earning ratio it is believed that a higher P/E is an indicator of a healthier company and conversely if a company has a lower P/E ratio.

 

The most important connection between the required rate of return and Price Earnings ratio (P/E) is in how they are used together as an indicator for a companies future. Companies with a high required rate of return and low P/E are generally considered riskier while high P/E and low rate of return are safer(Block, 2019). In this case, the higher required rate of return is an indicator of greater risk and thus will not always be certain.  In the case of IBM, the Required rate versus the P/E is a ratio in which the P/E is higher than competitors and the rate is lower meaning a general belief that the company is a safer bet.

If the dividend was greater than 5% percent and all other factors remained constant the company required rate of return would grow as well.  This could also mean just through the model the stock price could increase as well although other factors in the market would also impact that.

 

Question 2(Kenneth)

IBM is a long-known tech brand in the US, their most recent stock price is $116.77 and they paid out a sum of $6.55 in the last four quarterly dividend payments.  The current dividend yield is 6.55/116.77= 5.61 The required rate of return (Ke) for an investment in the common stock with an assumed growth rate of five percent, would be Ke=(6.55/116.77) + 5%= 10.61% Yahoo Finance lists IBM’s current P/E ratio as 22.08 which is defined as (Share price/EPS).  This is much lower than some of my peer’s companies, due to IBM being such a mature stock with solid dividends.  It is expected to have consistent dividends over time, however above 22 they are a more expensive mature stock.  IBM’s peers, Microsoft and Oracle both have P/E’s of 40.32 and 17.9 respectively.  The three P/Es are clearly and obviously aligned with their market value and earning capabilities.  Oracle should have the lower P/E because they dramatically have the lowest stock price and the lowest EPS.  The tightest relationship between the required rate of return and its stock price is their growth rate.  When the firm can drive a strong growth rate the rest of the results lift in response.  When their required rate of return is higher than peers it represents higher risk, and when it is lower it represents a predictable future of revenue (Block, Hirt, & Danielsen, 2019).

 

Question 3 (Jackie)

In my search on Linkin I was able to find several MBA’s. There were several that stood out to me such as MBA Candidate, MBA Finance, MBA Intern, MBA Consultant, MBA Venture Associate, MBA Consultant at UNDP, and Professional MBA. These titles come from a range of areas such as Product Strategy & Operations, Consultant with the Government of India SRCC, MBA Director at Spears School of Business, Senior Director Strategy & Business Development, and Strategy and Analytics. Of these roles there are several in the Strategy and Operations section that definitely appeal to me in my current role as a Sr. Manager for Operations Control. I enjoy the aspect of reviewing and improving operational performances as well as leading teams that have significant impacts on revenue. One potential career thought that I hadn’t considered was that of a teaching role at school. That intrigues me as in my previous role with my organization, I felt most fulfilled when I was teaching classes and enhancing the knowledge of our associates. The Senior Director Strategy & Business Development role also intrigued me as it sounds like a build off of my current role with some additional aspects.

The next level position for me in my organization would be that of a Director of Controllers organization, which would include aspects of Project Financing and Contracts. I could see this mirroring very closely to the Senior Director Strategy & Business Development role as it has multiple cross functional areas of the organization. I have greatly enjoyed any opportunity to learn about the different departments of organizations and how they work within the company.

I have updated my linked in profile to include several of my enhanced skillsets as well as accomplishments throughout my career. My linked in profile can be found below

 

 

Question 4 (Monique)

Some years ago, I joined the National Black MBA Association (I was trying to stay motivated to get my MBA) so I have had the pleasure of meeting many people with MBA’s different lines of work.  In reviewing their LinkedIn profile, I found the following:

 

Vice President of Operations; Marketing Program Manager Manager, Global Security Badging Services Associate Business Partner Senior Account Executive President
This user is maximizing her degree with her two roles: one a non-profit as VP and the other a Program Manager with Gap. I cannot help but think her running the ops of a non-profit will undoubtedly take her time, and she will need to let go of the other position. This user I know personally, and she is going through hell working as a leader in Global Badging for Salesforce due to the companies many acquisitions.  I actually hope she finds a different role because she is just mean lately LOL. This user works for Google, and she informed me that the role is just a cute way of saying Executive Assistant.  Kudos Google for avoiding demeaning role names. That said, this user is completely under-utilizing her many degrees. This user works for Twilio in Sales where he has developed his career long before he had his MBA.  He loves sales (and particularly commissions within IT organizations) but I know he can find a leadership role for a startup and make way more of his career. This user is the President of NBMBA (local chapter).  I have worked with her back when we were both admins for Kaiser Permanente (during that time she had her MBA).

 

To me, the VP of operations role sounds the most interesting, as it leads a team in operations in efforts of building successful outcomes for a non-profit. This is not easy in a sales environment, so the challenge of a creating a success for a not-for-profit is appealing to me.  That said, none of these roles are in line with how I plan to use my MBA and honestly, I am in a role more advanced than a few of these roles so therefore, I would not consider these roles.

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