Portfolio Strategy for Toyota
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Choose a real organization and assume that the organization has recently received a large cash infusion and that your end goal is to maximize wealth. The "cash infusion" should be equal to 10% of your organizations net worth.
Create a portfolio strategy that details executive-level strategic financial decision making. Create a portfolio of assets that reflect an executive-level financial strategy for next year. Some decisions require planning beyond a year; however, current practice recommends yearly revisions to the strategy. The strategic decisions you make should be supported by globally acknowledged, peer-reviewed research.
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The solution discusses the portfolio strategy for Toyota.
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Toyota Motors is selected to do this post in an effective manner. It is assumed that the company has recently received a large cash infusion and the end goal of management is to maximize the wealth. In this guideline creates a portfolio strategy that details executive-level strategic financial decision making. In addition to this, it also develops a portfolio of assets which reflect an executive-level strategy for the next year.
Cash Infusion Amount
The "cash infusion" should be equal to 10% of organization's net worth. Net worth or shareholders' equity of Toyota is $128,201,000 (Yahoo Finance, 2012). Thus, the amount of cash infusion can be calculated as below:
Cash Infusion = $128,201,000*10%
= $12,820,100
Following is the description of portfolio strategy and a portfolio of assets in relation to the investment of $12,820,100 that will be used by Toyota to maximize wealth:
Portfolio Strategy
To analyze different issues such as introduction of an independent growth path to a high-risk business, capture of the portfolio strategic risk in an appropriate manner and measurement of value and risk at portfolio level, it is necessary to develop a structured approach which is helpful for senior managers to better understand the impact of portfolio decisions on risk and values of corporate level portfolios (Jenner, Office of Government Commerce & Kilford, 2011).
An active portfolio strategy will be used by Toyota to attain the goal of wealth maximization. Under this strategy, mangers will use available information and forecasting techniques to ensure better performance as compared to a portfolio that is simply classified. For example, active common stock strategies include forecasts of future earnings, dividends or price/earnings ratio (Fabozzi, 2002). Similarly, bond portfolio, which are actively ...
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