Business fun facts!

Warren Buffet is the 3^rd richest man in the world worth over $57 billion. He is the CEO of Berkshire Hathaway. He plans to give away about $30 billion or over 80% of his wealth to charity.

He is one of the most respected investors in the world. When he was 13, he filed his first tax return and claimed $35 deduction for his bicycle. Since then he has continued to find ways to invest in business opportunities. He lives in Omaha, Nebraska. He is often called “Sage of Omaha” or the “Oracle of Omaha”.

Investors stay away on fear of inflation . The markets closed on a mixed note on looming economic concerns of recession and inflation. Both, recession and inflation are not good for the economy and kept the investors unsettled through the week. The S&P500 lost 3 points or -0.2%, the Dow gained 31 points or +0.3% and the NASDAQ lost 46 points or -1.9% for the four day week ending February 22^nd, 2008. On Monday, February 18^th, the US markets were closed to observe the Presidents’ Day.

Fight, fight, fight – Proxy Fight! . In the past few weeks, we have talked about the Microsoft (Ticker MSFT) bid to buy Yahoo (Ticker Yhoo) for $45 billion or $31 per share. The Microsoft’s bid was rejected by Yahoo. Now Microsoft is taking the battle directly to the Yahoo shareholders, also called the Proxy fight. In this fight Yahoo shareholders will have to decide if Microsoft’s $31 per share is the best offer for them. . Yahoo’s stock has gone up over 50% (from $19/share to over $28/share) since Microsoft announced its offer to buy Yahoo. If you are one of the Yahoo shareholders with stock trading at $19 and then comes along an offer to buy your share for $31, what would you do? You would look at what other options (or better deals) are out there to maximize your profit. . For now, it appears that neither Yahoo’s management nor anyone else has offered a better than $31 per share offer. So as a Yahoo shareholder, do you let this $31 per share opportunity slip away? Let us find out what will Yahoo shareholders do in the “Proxy Fight” by Microsoft.. .	REJECTED! Now starts the Proxy Fight
Professor's Corner . How to finance your Lemonade Stand Company? .. Let us say you decide to start a Lemonade Stand Company and to do that you need $100. Your parent’s could give you $100 and your worries would be over. However, they would like it more if you can show them some creative ways to raise $100 for the Lemonade Stand Company. . Let us say you have savings of $40 and are willing to invest it in the Lemonade Stand Company. Now you need $60 more and think of some creative ways to raise the needed money. You ask your parents for a $60 loan. They say that they are willing to lend you $35 only, but on certain conditions. The conditions are that you must pay 35 cents on the last day of every month, for 12 months, and pay $35 at the end of one year. A quick calculation shows you that your parents are charging you 12% annual interest on $35 loan for a year. With no other options to get the money, you want to lock your parents offer. You write up an agreement with your parents which state the conditions for the loan. . Both, you and your parents sign the paper, or in other words a contract. By doing so, you have just issued a Bond for the Lemonade Stand Company to your parents. Now you are the Bond issuer, and your parents are the Bond holder of the Lemonade Stand Company. In other words, Lemonade Stand Company has Debt (or Loan) of $35. . You still need $25 ($100 - $40 your savings - $35 from the Bond issued to your parents) for the Lemonade Stand Company. You start calling your friends who have in the past shown interest in a Lemonade Stand type business. You are able to convince them that they should put some of their savings in your Lemonade Stand Company as it is expected to make a lot of profit. Some of your friends get excited about the idea but want to know how much money is required and what is in it for them? You tell them that by putting their $5 each, they become part owners of the Lemonade Stand, which allows them part of the profits. For example, $5x5 = $25 will be from friends + $40 of your own money = total equity of $65 and of which $25/$65 will be the friends share. You write up an agreement with your five friends stating that you agree to share a part of Lemonade Stand Company with them. . You and your friends sign the papers, or in other words a contract. By doing so, you just issued Stocks or Shares for the Lemonade Stand Company to your friends. Now you are the Stock issuer, and your friends become the Lemonade Stand Company Shareholders. In other words, Lemonade Stand Company has Equity (or Stocks) of $65. . This is a great success story for you for being creative in raising the needed money! So far you have successfully completed the financing part of the business. Now comes the exciting part to deliver on the agreements that you signed. You will be working as a CEO of the Lemonade Stand Company to deliver on the commitments. How will it work? Let us discuss it in our coming issues. . Lemonade Stand Company
Coming soon…how does your city find money to build bridges, roads, schools, and parks?
Learn more about... What is Credit History? Why is it important to have a good credit history? Volume 12. What is Economy, Business, Workers, Goods, Services, Stock, DOW, S&P500, and NASDAQ in Volume 16. Does it pay to study hard? Volume 17. What is Currency and Foreign Currency Exchange rate? Volume 14. What is stronger or weaker currency? Volume 20. What does the dollar slide mean? Volume 32. How does money grow in a bank? Volume 21. What is Fed Funds rate and Discount rate? Volume 22 What does the interest rate cut mean for you? Volume 23. How to read stock information? Volume 25. What is "Black Monday"...Crash of 87"? Volume 31. Who are CEO, CFO, Shareholders, and the Board of Directors? What is SOX? Volume 33 How did year 2007 do? Volume 39.

Feb 19-22, 2008

Weekly Stock Market

Stock Market up/down

Index

Change

Last

DOW

Up +31

12,381

S&P500

Down -3

1,353

NASDAQ

Down -46

2,303

**Foreign Exchange Rate**

**$1 is equal to**
Currency	Change	Last
Euro (€)	-0.01	0.67
Yen (¥)	-0.51	107.22
Pound (£)	-0.00	0.51
Yuan ()	-0.04	7.15
Rupee (Rs.)	+0.40	40.08
Canadian (C$)	+0.01	1.01

**Your Favorite Stocks**
Company	Bought one stock in Jan-08	This week stock is?	Your gain or loss?
	$31.84	$32.57	+$0.73
	$51.57	$51.04	-$0.53
	$58.10	$55.69	-$2.41

We use multiple information resources, such as, websites, companies, stock exchanges, newspapers, text books, and others.