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DARAS DILEMMA: HOLD, SELL, OR...? I.

SYPNOSIS Dara Casinos economy Simmons who received common plummet four stock and hundred believes shares that a of the

International would likely

consequently

bearish

market would be in situation. So she then researches at the current financial situation of the organization and as a result, she finds out that the future triumph of the casino depends on the decision (whether to approve or not) of the opening of a new floating casino on a nearby river. If the court approves the application was granted it would result to a swift increase in the value of the firms stocks, regardless of economic conditions. Having such situation

Dara is now having a hard time in deciding whether to hold or sell these stocks. II. STATEMENT OF THE PROBLEM Considering the information that have been provided by the case, the major or main problem in the case is that whether Dara shall hold her shares until the decision has been made by the court or to sell her shares at fifty four dollars per share considering the forthcoming undesirable condition of the economy (downfall) and with the knowledge that it would give a bearish condition to the market. Sub-problems Is her decision to hold or sell her shares a good idea?

Does her projection of the future condition of the economy would most likely to occur?

Will

the

court

approve

or

disapprove

Casinos

application to open a floating casino on a nearby river? What will be her assurance that if the

application will be granted it will increase the value of the firms stocks? III. CHARACTERISTICS

Accordingly, the case bequeaths the importance of realizing (making decision) when to hold or when is the most appropriate time to sell ones shares provided with the same situation as provided in the case.

It

also

allows

the

readers

to

evaluate

the

factors

that might affect ones decision about

his or her shares. The case teaches every reader or evaluator to be a savvy investor. IV. ALTERNATIVE COURSE OF ACTION Sell now at fifty four dollars per share and use the proceeds to buy high-rated corporate bonds. Keep the stock and place a limit order to sell the stock at sixty dollars per share.

Keep the stock and place a stop-loss order to sell at forty five dollars per share.

Hold

the

sock

for

an

additional

four

months

before making any decision.

V.

ANALYSIS The case main concern is whether Dara would hold or sell common her four at hundred fifty in shares four the of Casinos share. she International the the

stock

per case;

Considering that

situations

provided

believes

economy is turning down and a bearish market more likely to occur-this is then the factor that triggered her to sell her shares and invest the proceeds into a safer security. But she put into consideration her decision, if she would decide to sell her shares at the prevailing price and with what she believes in that there would be a downfall on the economy wouldnt it be overly pessimistic? After her

thorough analysis of this situation, she then decides to take a look at the current standing of the financial aspect of the organization-later on she finds that the future

success of the organization may hinge on the outcome of the pending court proceedings on the firms application to open a new floating casino. If this will be approved by the court, then it would greatly affect the firms stock for it will experience a precipitous increase in its value and take note that it had been specified that regardless of any economic or external factors it wouldnt affect the boon

that has been given to the firms stocks value. Taking it into consideration it would be better if Dara would hold her shares for a couple of months or perhaps when the court approves the organizations application. Since she already projected the there would be a downfall on the economy and a bearish market more likely will occur, its just okay for an investor must be a risk taker. She must look forward to the positive effect of the application of the organization to open another casino for this bring delight to her shares and eventually this would give her more profit. VI. CONCLUSION Knowing these facts and base on the analysis that had been conducted, Dara Simmons is a savvy investor, in which she takes into consideration all the necessary factors that might affect her decision. And with respect to the question whether to hold or sell the shares-it would be better is she holds it for the mean time. VII. RECOMMENDATION I highly recommend that Dara Simmons should hold her shares for the mean time while there is a great opportunity for the value of her shares to be uplifted in the future with the application of the Casinos International to open another casino. Being an investor she should be both savvy and risk-taker for it will give her delight in the future. VIII. PROGRAM OF ACTION The program of action that would be best to take into consideration by Dara Simmons is to hold her four hundred

shares for the period and it would be better to if she opens her arms to the opportunity that may come in the future(the effect of the application of Casino

International to open another casino). More efficaciously speaking it would be best if this decision be accompanied by alternatives two and three which is to keep the stock and place a limit order to sell the stock at sixty dollars per share or keep the stock and place a stop-loss order to sell at forty five dollars per share.