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International business: with biblical worldview: vol. ch. 5.
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SundaySep 18 at 5:18pm
Stocks represents shares of equity that a company releases for sale. Anyone who has a stock of a company is considered its shareholder or part owner. (Satterlee, 2018 pg. 141)
Investing money into stocks can be a key part of your personal finance strategy. The primary reason most people buy them is to generate long term return on investment. There are two types of stocks, public and private. Public stocks of well-known companies are usually traded the most amongst the public people. Private stocks are traded less and typically amongst more wealthy individuals (Thomas, 2022).
Course material tells us that the value of a company’s stock may rise or fall in accordance with its performance, creating opportunity for acquiring profits. (Satterlee, 2018 pg. 141) A company I personally support is called Lululemon. This athletic wear company is on track to meet its five-year goal for growth. International revenue for Lululemon has increased by 35% during the second quarter. They strive to double annual revenue from 6.3 billion to 12.5 billion before 2026 (Sun, 2022). From the start of the year their stock has gone up over 100 dollars, which puts more money in the pockets of those who bought into the company at lower stock prices.
A competitor of Lululemon is known as Gymshark. However, Gymshark is not as big, but they are growing exponentially and catching wind. Gymshark has grown by 200% since opening in 2013. They started out with a yearly revenue of $108,000 and just hit 41 million in sales last year (Lavendaire, 2021). Unlike its competitor Gymshark is traded privately. Once it goes public and people buy in early, they could make lots of money if the company grows like Lululemon.
Lavendaire, Dinh, L., & Michelle. (2022, August 15). How gymshark grew by 200%+ year on year and hit £41m in sales (updated 2019). Beeketing Blog. Retrieved September 18, 2022, from https://beeketing.com/blog/gymshark-growth-story/
Satterlee, B. (n.d.). International Business. Retrieved August 24, 2022, from https://prod.reader-ui.prod.mheducation.com/epub/sn_ceee9/data-uuid-266b0a73c62f413a9e49d2332841832f#data-uuid-2ee041e2a9a04c48ab92a52fde3b74c7
Sun, L. (2022, September 5). Why is everyone talking about Lululemon Stock? The Motley Fool. Retrieved September 18, 2022, from https://www.fool.com/investing/2022/09/05/why-is-everyone-talking-about-lululemon-stock/
Thomas J. Brock (2022, August 19). What are stocks and how do they work? Annuity.org.Retrieved September 18, 2022, from https://www.annuity.org/personal-
YesterdaySep 20 at 7:34pm
Borrowers by definition use “lending options of financial institutions to make major purchases of goods, property, and business ventures” (Satterlee, 2018). Lenders make money by giving out money to customers that make payments with interest, and sometimes principal, to pay that loan off (Satterlee, 2018).
As Morvinski and Shani say, borrowers operate with an exchanged mindset (Morvinski et al., 2022). This mindset is reflective of a lenders mindset, which is said to be communal. These different mindsets are linked to the way individuals react to small, interpersonal loans. Research suggests that lenders that encounter these interpersonal loans overtime should not risk their money due to the rate that these loans do not get paid off. Here and there, not receiving the repayment from a small, interpersonal loan does not do much harm. However, during a lender’s lifetime these add up quite a bit. Though this may be the case, Morvinski and Shani find that mircoloaning from personal connection is not often driven by financial opportunity, but by helping friends or family (Morvinski et al., 2022). This is rare to find at larger, more formal financial institutions. The borrowers in a sense get off the hook when they fail to make payments on these interpersonal loans, in my opinion.
Peer-to-peer lending platforms through apps is another form of lending that is challenging due to the access of limited information. “The number of lenders comments is negatively associated with funding success” whereas the “number of borrowers responses is positively associated with funding success” (Xu et al., 2018). Flifli, and other authors Okuneye and Akerele, find that the key factors to lending and borrowing collaborations is credit, household size, and types of households. (Flifli et al., 2020).
The textbook mentions limiting risk when possible and to do this, I feel that lenders should limit their use of interpersonal loans to decrease the possibility of not receiving payments. Although, it can happen with any kind of loan, it is more probable with personal relationships due to the feeling of leniency.
Flifli, V., Okuneye, P. A., & Akerele, D. (2020). Lenders and borrowers’ collaboration-based risk mitigation credit market: Factors influencing access to formal credit in the agricultural sector in the benin republic. Agricultural Finance Review, 80(2), 173-199. https://doi.org/10.1108/AFR-01-2019-0010
Morvinski, C., & Shani, Y. (2022). Misaligned mindsets between borrowers and lenders of small interpersonal loans. Organizational Behavior and Human Decision Processes, 169, 104117. https://doi.org/10.1016/j.obhdp.2022.104117
Satterlee, B. C. (2018). International Business: with Biblical Worldview: Vol. Ch. 5. Global Monetary Systems. McGraw Hill. https://prod.readerui.prod.mheducation.com/epub/snceee9/data-uuid-a9ca21d7a8574376bf23d5be8586d667
Xu, J. J., & Chau, M. (2018). Cheap talk? the impact of lender-borrower communication on peer-to-peer lending outcomes. Journal of Management Information Systems, 35(1), 53-85. https://doi.org/10.1080/07421222.2018.1440776