Week3 assignments

Here are the assignments for week 3 (March 28, 30). To complete your answer you'll want to read Chapter 3 (Accounting Basics) on the course website.

Monday group (due Sunday, 6:00 pm)

Please prepare a 3-4 page memo on whether Judge Posner properly affirmed the Controller of the Currency's valuation of the shares of Gustav Beerly, a 4% shareholder of Mid-City National Bank. Consider the Controller's valuation methodology, in particular the use of adjusted book value. How are book value, adjusted book value, investment value and market value different? Can they be consistently combined in one valuation? Would you have valued the bank differently? (Remember please include both a textual and a spreadsheet answer to these questions). You can find the case in 3.4.1 Use of Financial Statements - Book Value Email your memo to me as an attachment (preferably Word, with any spreadsheet imbedded in Word).

Wednesday group (due Tuesday, 6:00 pm)

Please prepare a 3-4 page memo on the question whether the American Express board made a good business judgment to distribute stock in its portfolio rather than selling it and realizing a corporate-level tax loss? Did the New York court properly defer to the board's business judgment? What did the court assume about the way that public markets value companies? If you were deciding this case, would you come to a different conclusion? Justify yourself. (Remember please include both a textual and a spreadsheet answer to these questions). You can find the case in 3.4.2 Use of Financial Statements - Earnings or Cash Flow

As always, I invite your proofreading and "click" reading suggestions.