Yahoo and the Stock Market

Yahoo was started in February 1994 as a way for two phD students, Jerry Yang and David Filo, to be able to keep up with their personal interests on the internet. These two students were currently enrolled at Stanford University and started a pilot program there when they realized there were many other people out there that wanted to explore the world wide web. By 1996, Yang and Filo knew that they had something rather successful on their hands. They hired a CEO and a COO and announced a highly successful IPO. Today, Yahoo is the leader in internet communications that reaches 345 million people each month!

Going to the St. Louis Federal Reserve Board website, the historical interest rates are found there. Moody’s Seasoned Aaa Corporate Bond Yield and Moody’s Seasoned Baa Corporate Bond Yield was found to be listed in February of 2011 and was stated as being 5.22% and 6.15%, respectively for the Yahoo company. If Yahoo was to invest $1,000,000 per year for the following 40 years using the Aaa corporate bond yield, the amount that the company would have would be $127,485,931.69. If Yahoo was going to invest another $1,000,000 per year for the next 40 years using the Baa corporate bond yield, the amount that the company would have at the end of 40 years would be $160,720,095.57. These totals were found by using the future value equation to help us predict the advantages of investing into the Aaa and Baa corporate bonds. According to these numbers, it seems that it would be worth the time, money and effort to invest $1,000,000 now to receive a higher payoff in the future.

Moody’s Investor Service is a credit rating agency that gives bonds a letter reference so that investors know what the quality of a particular bond is that they may want to invest in. Moody’s Investors Service, as well as the other credit rating agencies, is registered with the SEC, Securities and Exchange Commission, as Nationally Recognized Statistical Rating Organizations, NRSROs....