Indicate the number of shares you are buying, and the      price of the shares you are buying for each company




strayer Univeristy

BUS401 Principles of Finance BAO1727A

Please note that this journal assignment is based on a pretend scenario and fictitious money. However, the assignment is based on actual stock pricing in real time situations. Do not invest your personal money for this assignment.

The capital markets and the ability to raise funds for corporate uses are essential to the US economic systems. For this assignment, imagine that you have $25,000 to invest in US companies. You are buying used stock. The company got the money when it issued the stock originally. You will be buying it from an existing owner.

You are investing, or buying the stock, because you believe the company will make money and pay you a dividend in cash. Each share of stock that you buy entitles you to any dividend declared and a vote at the annual stockholders’ meeting.

The stock also allows you the ability to earn your money back by selling the stock. Of course, investing in stocks is risky and there is the possibility that the stock you buy will be worth less when you want your money back. The company is not obligated to give you any of your money back. You will only get your money back if another investor wants to buy your stock.

For your first journal entry complete the following:

  1. Indicate the companies you are investing in: Select three (3) US companies that are publicly      traded. Please use your knowledge and experience and pick, as many stocks      as you’d like. Lastly, make sure you are practicing good diversification.      Jim Cramer, Money Manger, on CNBC, plays a game at the end of his show      called “Am I Diversified.” Check out a short clip to get a sense of      industry diversification at
  2. Sources of Information: There are many ways to find such companies and the      stock prices, including the New York Stock Exchange at,      Google Finance at, NASDAQ at, and
  3. Indicate the amount you are investing in each company: Decide how you will divide $25,000 across the three      (3) companies; e.g. $10,000 in Company 1, $10,000 in Company 2, and $5,000      in Company 3. You decide the amount you are investing in each company. You      do not have to provide any analysis to justify your decisions. You must      only provide some reason for picking that company. For example, you might      invest in Ford because that company gets a lot of your money and you hear      that Ford is doing well, and will continue to do well.
  4. Indicate the number of shares you are buying, and the      price of the shares you are buying for each company: Once you decide the companies and the amount for each      company, determine how many shares you can buy. If Company 1 is selling      for $42.16, then you may buy $10,000/ $42.16, or 237.19 shares. But you      cannot buy a part of a share, so you decide to buy either 237 or 238. In      this example you buy 237 shares, at $42.16 per share, investing $9,991.92.      You won’t be able to buy exactly $10,000, or $5,000, or $25,000, but it will      be relatively close.

Your next journal assignment will be to report the new value of your shares during Week 8 of the course.

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