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This is the twelfth Business Research Analyst Capstone Project installment as outlined in Module 0 located in the Learning Modules section.
You will complete this discussion based on the impact of key Federal Reserve functions on the financial operations of a business, the responsibility
of the corporate finance function related to planning and investing, and debt and equity financing options available for a business.
In order to provide your Capstone boss with insight into this subject matter, you will utilize Johnson & Johnson (J & J) as a focus company to
discuss the finance aspects of this organization by responding to the following questions:
1. Describe the impact of the following key Federal Reserve functions on J & J's financial operations:
a. Discount rate: what is the impact of an increase in the discount rate on J & J if it was planning on obtaining financing for an
expansion?
b. Credit controls: what is the impact of more stringent (i.e. restrictive) credit controls if J & J was planning on obtaining financing for an
expansion?
c. FDIC coverage: what is the impact on J & J if the FDIC insurance program was terminated by the Federal Reserve?
d. Check clearing: how does this function assist J & J with their cash management activities?
2. Characterize the responsibility of J & J's corporate finance function related to the following:
a. Planning: describe the purpose of financial planning and the elements that would be included in J & J's financial plan.
b. Investing: based on your review of J & J's website and their current offerings, give two examples of areas where the financial
managers could suggest that the company make investments to grow the company.
3. Differentiate between debt and equity financing options available for J & J by addressing the following:
a. Define two differences between debt and equity (i.e. stock) financing.
b. Bonds: describe this type of debt and indicate one advantage and one disadvantage of raising funds through the sale of this type of
security.
c. Common Stock: describe this type of stock and indicate one advantage and one disadvantage of raising funds through the sale of this
type of security.
d. Preferred Stock: describe this type of stock and indicate one advantage and one disadvantage of raising funds through the sale of this
type of security.

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