FIN 320 Final Project Part III

FIN-320 Final Project Part III

Southern New Hampshire University

The results of both sections of my employment examination have finally been received, and I was offered the position. I have a few important decisions to make before I can formally accept or decline the position.

The school I would like to attend costs $100,000. To help finance my education, I need to choose whether or not to sell any of my 500 shares of Apple stock I bought five years ago, 100 Apple bonds (each with $1,000 face value and a 3.25% coupon rate) that are five years from their 10-year maturity date, or a combination of both. As of August 16, 2019, Apple stock is worth $206.50 per share (Yahoo Finance, 2019). If I were to sell all of my Apple stock today, I would receive a total of $103,250.00 ($206.50 x 500).

I used Market Insider to find out how much my Apple bonds are worth. The bonds have a 1.88% market yield and the interest is paid semi-annually (Market Insider, 2019). The coupon rate is 3.25% they are still five years left to the maturity date. Using Excel, I used a formula (=PV (RATE, NPER, PMT, FV) to calculate the present value. The actual calculation is =PV (0.0094,10,16.3,-1000) which equals $997.44 per bond. Since I have 100 Apple bonds, I would get $99,743.63 if I were to sell them today (WBIII.A, 2019). I would either have to see all of my Apple stock or a portion of both stock and bonds in order to have enough to pay for my education.

  1.88% 5 3.25% -1000 2
  0.0094% 10 16.3% -1000  
$997.44 Current value per bond
$99,743.63 Value for 100 bonds

The main advantage of selling a combination of stock and bonds to pay for school is that I can still have higher risk shares in the market as well as lower risk bonds, thus diversifying my investments with Apple. If Apple stock price increase I will reap the advantage, but if Apple stocks plummet, I do not lose everything all at once. Diversification is better because it helps mitigate risk. The disadvantage of having a combination of both stock and bonds is if one outperforms the other. For example, if the stock price increased multiple times within the year, then I would have made a much smaller profit if I sold all my bonds and kept all my shares. A combination of both the high-risk stocks and low-risk bonds comes out to a medium-risk investment.

If I were to finance my education, I would sell a combination of stocks and bonds. Stocks are not guaranteed to return anything to the investor however without great risk does not come great reward. Bonds generally offer fairy reliable returns through coupon payments (Investopedia, 2019). If Apple stocks stock plummet and I have only stock, I could end up with nothing. This is where the combination works better because I would still have the bonds to fall back on. Diversifying with a combination of stocks and bonds is the best option for me.

Assuming that my potential employer has an education assistance program, if I were to accept the job, I could go to school and get it paid for by my employer. This would be the best case scenario because I would not have to sell any of my Apple stocks or bonds. The bonds would be able to fully mature for their best payoff. Even if Apple stock tanked, I would still have my bonds and the current valuation of $99,743.63 and not having to pay for school I am already ahead. Plus, the job will provide me with experience and skills that I can eventually use in a higher earning career after graduation. Even if I was only able to go to school on a part time basis, in the long run it is a better financial option. This is actually how I have been able to pay for school and I am grateful to my employer that they invest in their employee’s education.

If the company offered by a $5,000 bonus, to be received today, or 100 shares of the company’s stock with a current price of $50 per share, it makes the better financial sense to take the 100 shares of stock. If I sold that stock today, it would yield me $5,000 (100 x $50 = $5,000) minus the fees or commission for selling my shares, however if I were going to sell it today, then I should just take the bonus. I may not have the money to invest myself so this would be a good opportunity. If the stock does well, then I make money. Even if the stock grows by 5% over the next year, I make a profit. If the company is solid and poised for growth, this is a logical choice.

The advantage of taking the bonus is that I get $5,000 today to use however I wish, including investing on my own. If I don’t use it and it sits in my savings account, it does not grow. The advantage of taking the 100 shares of stock is that it could increase in the future and be worth more than $5,000. The disadvantage of the stock is that the stock value could decrease and be less than the $5,000.

I think whether or not I would take the stock over the bonus would depend on the company and their outlook. If the company had a solid financial outlook and I didn’t need the money I would probably take the stock but I would consult with a financial advisor before I did anything. Bonuses are nice but I’m sure I would probably spend it on something immediate rather than investing it myself. If I had my preference, I would rather have the bonus put into my 401(k) where it could be divested instead of just in one company’s stock (Motley Fool, n.d.).

The Securities Act of 1933 was created and passed into law to protect investors after the stock market crash of 1929. The legislation had two main goals: to ensure more transparency in financial statements so investors could make informed decisions about investments; and to establish laws against misrepresentation and fraudulent activities in the securities markets. There are some security offerings that are exempt from the registration requirement of the act (Kenton, 2019). Unregistered shares (also called restricted stock) are securities that are not registered with the Securities and Exchange Commission (SEC). They are usually issued through private placements, Regulation D offerings and employee stock benefit plans, as compensation for professional services or in exchange for funding a startup company. For example, a privately-held company might issue unregistered shares to its executives and board members as part of their compensation package (Chen, 2018). Since my new employer is not registered under the Securities Act of 1933, I would need to investigate why the company is not registered. I should not just assume that the company is trying to do something fraudulent.

As a potential financial manager, I need to be aware of the federal and shareholder requirements to ensure that I am completely compliant to the shareholders. Publicly owned companies are in the habit of preparing two annual reports, one for the SEC and one for their shareholders. Form 10-K is the annual report made to the SEC, and its content and form are strictly governed by federal statutes. It contains detailed financial and operating information. In 10-K reports, management typically provides a narrative response to specific questions about the company’s operations, and public accountants prepare the detailed financial statements.

SEC regulations require that annual reports to stockholders contain certified financial statements and other specific items. The certified financial statement must include a two-year audited balance sheet and a three-year audited statement of income and cash flows. In addition annual reports must contain five years of selected financial data, including net sales or operating revenues, income or loss from continuing operations, total assets, long-term obligations and redeemable preferred stock, and cash dividends declared per common share. Annual reports to stockholders must also contain management’s discussion and analysis of the firm’s financial condition and results of operations. Following broad guidelines provided by the SEC, this section of the annual report should focus on the company’s financial condition, changes in financial condition, and results of operations. Management’s discussion and analysis should disclose or discuss the firm’s liquidity, capital resources, results of operations, any favorable or unfavorable trends in the industry, and any significant events or uncertainties (Reference for Business, 2019).


Chen, J. (2018, April 13). Unregistered Shares. Retrieved from

Kenton, W. (2019, August 13). Securities Act Of 1933. Retrieved from

Lioudis, N. (2019, July 5). Buying Stocks Instead of Bonds: Pros and Cons. Retrieved from

Markets Insider. (2019). APPLE INC.DL-NOTES 2013(13/23) Bond. Retrieved from

Motley Fool. (n.d.). How Does a Stock Bonus Plan Work? Retrieved from

Yahoo Finance (2019, August 18. Apple Inc. Stock Price. Retrieved from

Reference for Business (2019, August 18). Retrieved from