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Deliverable Length: 150–250 words Due Date: 6/28/2012 Using

 

Customer Question

Deliverable Length: 150–250 words Due Date: 6/28/2012

Using the library and credible Internet resources, complete the following:

• Find an example of a recent major decision (whether in business, politics, etc.) that
was made based on assumptions that turned out to be incorrect.

• Explain why at least 2 assumptions for this decision were incorrect, and explain what
led to their use as a basis for the decision made.

• What would you have done to test the validity of the assumptions? What specific kinds
of research, testing, or surveying might you have performed if you were the decision
maker in a similar situation in the future? What, if anything, would you do differently
about the assumptions made?

Submitted: 329 days and 22 hours ago.
Category: Business and Finance Homework
Value: $59
Status: CLOSED
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Expert:  Alex replied 329 days and 22 hours ago.

Hi, can certainly help with this.

Thanks
Alex

Customer replied 329 days and 22 hours ago.

That would be great Alex. I have several projects that I must complete. However, between work, family, and other time constraints it is just too hard for me to put 100% into this assignment.

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Expert:  Alex replied 329 days and 21 hours ago.

Totally understand. Just want to confirm 150-250 total words for all and not each?

Customer replied 329 days and 21 hours ago.

Yes, that is correct, it is for all not each. Typically, it is a little more than the max shown when all the questions are answered according to instructions. It does not have to be doubled spaced, single is fine for this assignment.

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Expert:  Alex replied 329 days and 21 hours ago.

No problem.

Customer replied 329 days and 21 hours ago.

Ok, thanks. Let me know if there is anything else that you need from me to assist on in completing this assignment.

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Expert:  Alex replied 329 days and 20 hours ago.

All set with 389 words:

http://wikisend.com/download/777586/Decisions.doc

Thanks
Alex

Customer replied 329 days and 10 hours ago.

Alex,

Is this an answer or response that is viewable only to me? In addition, the hyperlink is not active. Therefore, I am not able to open the document to view your answer.

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Expert:  Alex replied 329 days and 10 hours ago.

389 words...here is the full text:

One recent decision that was made in business that was
certainly a big mistake based on assumptions was the increasing of the price of
the initial offering of Facebook stock.
Simply because Facebook is the most well-known social media outlet and
has millions of members many investment banks were willing to overlook actual
sales growth in favor of what they believed to be the next big thing. Two business decisions that truly stand out
are the willingness of investment banks to up the offering price and second
they did not have the necessary resources in place upon initial trading to
handle the types of transactions that were expected. While there was certainly an attempt to focus
on the actual value of the company in setting the share price there is always
the ability of someone to provide a subjective component to the overall pricing
model that is used in the initial public offering. As such it is my belief that much credit was
given for their level of market awareness and not necessarily for their current
and future net income based on their current revenue model. The basis for the second mistake that
initially caused trading glitches is the lack of any system to test such
interaction prior to the release of the stock to the open market. In order to better test the validity of the
assumptions I would have created a better financial model that focused on
actual sales numbers for the company and only slightly considered the benefit
of their current market position in terms of recognizability. The focus should have been not on the hype of
Facebook and its new stock but on the ability to the company's investments to
create value for shareholders. While the
shareholders were considered they obviously did not have the appropriate
controls in place to better manage the initial offering. While testing in terms of sales volume would
have been impossible they certainly could have worked with brokerages and
others to determine the expected demand upon that initial public offering that
was made. In the future a complete set of assumptions would need to be
delivered in order to better manage the potential problems that could have
developed with the release of the stock. In addition, a risk analysis could
have potentially helped to alleviate the issues as they arose.

Customer replied 328 days and 20 hours ago.

Alex,

Do you use any references or sources for this answer? If so, can you provide them for me? I am required to use supporting information (material) that validates what is being said.

Thanks

Accepted Answer

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Expert:  Alex replied 328 days and 20 hours ago.

Yes, I will post them in just a few minutes.

Expert TypeBachelor's Degree
Category: Business and Finance Homework
Pos. Feedback: 100.0 %
Accepts: 130
Answered: 6/21/2012

Experience: BS in Business Administration with honors. Able to assist in many business related courses.

Ask this Expert a Question >

Accepted Answer

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Expert:  Alex replied 328 days and 20 hours ago.

Morgan Stanley Was 'Driver' on Facebook's Wild IPO Ride. June 18, 2012. Monica Langley. Retrieved June 20th, 2012 from http://online.wsj.com/article/SB10001424052702303822204577464331791367546.html

Facebook Stock Drop Reaches Nearly 10%, below $29. May 29, 2012. Chris Isadore. Retrieved June 20th, 2012 from http://money.cnn.com/2012/05/29/investing/facebook-stock/index.htm

Expert TypeBachelor's Degree
Category: Business and Finance Homework
Pos. Feedback: 100.0 %
Accepts: 130
Answered: 6/21/2012

Experience: BS in Business Administration with honors. Able to assist in many business related courses.

Ask this Expert a Question >
Customer replied 328 days and 20 hours ago.

Again, Thank you for your service.

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Expert:  Alex replied 328 days and 20 hours ago.

Sure, no problem. Will look at the other question.

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Expert:  Alex replied 328 days and 20 hours ago.

Hi, I took a look. I won't be able to get to it. I'm about to go offline and may not be back until late Monday or Tuesday of next week. Will check back then.

Thanks
Alex

Customer replied 328 days and 19 hours ago.

Ok, no worries, thanks for checking. Enjoy your time off and have a good night.

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Expert:  Alex replied 328 days and 19 hours ago.

Thanks!

 
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