Please see the attached document for the questions on the paper.
1. Review the rubric to make sure you understand the criteria for earning your grade. 2. View the video Basic Leveraged Buyout. a. Basic leveraged buyout (LBO) (video) | Khan Academy 3. View the video KKR Henry Kravis. Carefully consider the financial and ethical implications of the company’s approach to financing. 4. Study this workshop’s devotional about the implications of debt. 5. Research and identify an example of a recent leveraged buyout that interests you. You may choose any company you like, as long as it involves an LBO transaction and you can find enough information to shed light on the deal. Use OCLS and the internet to conduct research on the reasons for the transaction and the outcome. 1. The Hilton Hotel LBO 6. Prepare a paper analyzing the ethical and financial implications of the selected company’s LBO transaction: a. Provide a brief summary of the company and its LBO transaction. b. Explain the justifications given for the company’s decision to execute an LBO. c. Evaluate the impact of the LBO on the company’s stakeholders, including its shareholders and employees. d. Assess whether the LBO was considered successful and explain why. e. Explain, based on your informed opinion and research, whether executing the LBO was a good decision. f. Review the 5.1 Exercise regarding the biblical perspective on debt. Evaluate the LBO strategy based on biblical principles and cite a Bible verse that supports your position. (see below for post) 7. Be sure to provide a detailed analysis and assessment that demonstrates your critical thinking and understanding of financial analysis. Your finished paper should be 500–600 words in length and include at least three sources in addition to your biblical reference. 8. Prepare your paper in Microsoft Word in a professional manner, using proper spelling, grammar, and APA style. Include a references list. Be sure to appropriately cite your sources for any commentary or analysis you rely upon. a. For questions on APA style, go to the APA Style Guide. 9. When you have completed your assignment, save a copy for yourself and submit a copy to your instructor by the end of the workshop. 5.1 Debt is an extremely useful tool. For example, without debt, most people would have to save their money for decades in order to purchase a home. By the time an average family is able to afford such a purchase, they may be too old to truly enjoy it. Those of us who were able to have a childhood home likely did so thanks to our parents' mortgage. Similarly, in the business world, debt allows us to pursue new products and projects when we believe the timing is right, rather than simply when our budget allows it. Imagine if a company had developed an innovative new product but was unable to launch it for years due to lack of funding. They may miss the opportunity entirely. Unfortunately, many people underestimate the risks and the costs of debt. By definition, debt presumes upon the future. This is the basic premise behind a mortgage. With a mortgage, we promise our future in return for a better today. This enables us to have a home while our kids are still young enough to enjoy it, but it also ensures we will pay much more for that home (with interest) and be saddled with an obligation that looms over us for many years. While the Bible never says debt is a sin, it does repeatedly caution against its perils. Perhaps the best-known Bible verse about debt comes from Proverbs 22:7: "The rich rule over the poor, and the borrower is servant to the lender" (New International Version). If you have ever been burdened with excessive debt, you can certainly identify with this feeling of servitude. Debt changes relationships. It often hides deeper issues, like “greed, self-indulgence, impatience, fear, poor self-image, lack of self-worth, lack of self-discipline, lack of faith, and perhaps many others” (Blue & Blue, 2016, p. 57). Debt creates a commitment we are expected to honor. While incurring debt may not be a sin in itself, failing to repay debt certainly is. Psalms 37:21 states, "The wicked borrow and do not repay, but the righteous give generously." So as Christians, how should we approach debt in our personal and professional lives? Finance guru Ron Blue sets out four biblically based criteria: 1. It must make economic sense. This means not only that the cost of borrowing must exceed the benefits received, but also that we must have a guaranteed way to repay. If we cannot guarantee we can meet the obligations of the debt, then we shouldn’t make the commitment. 2. There must be absolute unity. For instance, if one spouse has anxiety over the debt, then it should not be undertaken. Debt can alter and strain relationships and may create significant stress. 3. There must be spiritual peace. When you envision yourself taking on the debt, if you experience any lack of peace, then do not move forwards. This may be the Holy Spirit speaking to you! Pray for wisdom and for God’s will to be made known. 4. It must be aligned with God’s priorities. You should carefully consider what God-given goals you are pursuing. If your objectives do not align with God’s, or if there is any better way to achieve those objectives, then now is not the time to go into debt!