This paper discusses how the teaching of ethics can be interwoven with the most basic concept in finance: time value of money. Although valuation formulas yield precise numerical answers, they require many assumptions about future economic conditions. If decision makers use false information or erroneous assumptions, they will arrive at an incorrect value estimate, even if the calculations are performed correctly. Thus, the valuation process can be manipulated byunscrupulous participants. This concept is illustrated with references to recent events. Examples appropriate (...) for classroom use are included in an appendix. (shrink)

This paper discusses how the teaching of ethics can be interwoven with the most basic concept in finance: time value of money. Although valuation formulas yield precise numerical answers, they require many assumptions about future economic conditions. If decision makers use false information or erroneous assumptions, they will arrive at an incorrect value estimate, even if the calculations are performed correctly. Thus, the valuation process can be manipulated byunscrupulous participants. This concept is illustrated with references to recent events. Examples appropriate (...) for classroom use are included in an appendix. (shrink)

This paper presents a short classroom exercise to stimulate student discussion about the rights of shareholders versus the rights of stakeholders. Students are challenged to identify and evaluate their preconceived notions of what constitutes excessive profits. The exercise illustrates why the realization of a large return on investment cannot be used as prima facie evidence that a firm exploited employees, customers, or other stakeholders. This concept is illustrated using datafrom the pharmaceutical industry.

This paper presents a short classroom exercise to stimulate student discussion about the rights of shareholders versus the rights of stakeholders. Students are challenged to identify and evaluate their preconceived notions of what constitutes excessive profits. The exercise illustrates why the realization of a large return on investment cannot be used as prima facie evidence that a firm exploited employees, customers, or other stakeholders. This concept is illustrated using datafrom the pharmaceutical industry.