Financial Management | Assignment | Solutions

Running Head: FINANCE
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Financial Management
(Student Details: )
1/26/2020

FINANCE
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Financial Management
Solution 1
There are two popular stock exchanges in the USA include the National Association
for Stock Dealers Automated (NASDAQ) and the New York Stock Exchange. These two
stock exchanges are the largest stock exchanges in the country. It is well aware that both of
the companies deal with big numbers of stock exchanges on a daily basis. In this context, the
NASDAQ was established in 1971 whereas the NYSE was established in the year 1792.
Now, the key difference between the aforementioned stock exchanges is that the NYSE
operates with brokers selling and buying for clients or companies on the exchange floor
whereas the NASDAQ operates with dealers over the telephone of the internet. The stock
chosen and traded through NYSE is Walmart Inc. while the stock traded by NASDAQ is
Microsoft Corporation (Cheng, 2014).
In addition, the key differences between the two stock exchanges are as follows:
Factors NYSE NASDAQ
Perception Companies listed on this stock
exchange are typically
perceived to be comparatively
less volatile
Companies listed on this stock
exchange are typically perceived to
be more volatile as well as growth-
oriented stocks
Indices The NYSE include the indices
such as NYSE composite and
NYSE 100
The NASDAQ indices are
NASDAQ-100, NASDAQ
biotechnology, and NASDAQ
composite.
Foundation Founded in 1792 thus more
than 226 years old
Founded in 1971 thus the stock
exchange is around 50 years young
Market type The stock has an auction
market
The stock has a dealer’s market
On the other hand, it has been found that both the chosen stock exchanges have very
few similarities. The foremost similarity is that the NYSE and NASDAQ are public entities
which are accounting for the major portion of equities as well as fixed incomes traded in the
United States during weekdays from 9:30m to 4:00 pm ET (Clayman, Fridson, & Troughton,

FINANCE
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2012). Apart from this, both of the stock exchanges are using traffic controllers for
troubleshooting specific traffic issues and thereby assure orderly and smooth markets for their
clients. Lastly, both the stock exchanges include NYSE and NASDAQ trade on themselves
while they do not find buyers or sellers and hence both are needed to follow regulations set
by the Securities and Exchange Commission (Clayman, Fridson, & Troughton, 2012).
Solution 2
The two companies traded by NYSE and NASDAQ are Walmart and Microsoft.
Hence free cash flows of the two companies during 2015 and 2016 are as follows:
In general, the presence of free-cash-flow always indicates that an organization is
having cash to expand, buy back stock, develop new products, pay dividends, as well as to
minimize their debt. In this way, a high, as well as rising free-cash-flow is always a sign of a
wealthy and healthy financial condition of the company which is thriving in their current