Beta and Capital Budgeting

Part 1: Beta

Visit the following web site or other websites: 

https://finance.yahoo.com/?guccounter=1&guce_referrer=aHR0cHM6Ly9jb3Vyc2VzLmNhbXBiZWxsc3ZpbGxlLmVkdS8&guce_referrer_sig=AQAAADYGCYI-QQcWpc0a6rPNlrbyjC7OP9-rXTIeB9UUNhxHg6EByxSkwQIcIDPv3LjJyzhAju6IgrF44yMlo9a1Bx4zhV6sh7--ORY5_19Lc5j7eDtYu3ftrxS9C-jYReVKdjsgjFu3csg96x_8Js8WJnPB9gH2VtC4wd6aNDMIyraO

Yahoo Finance

1.  Search for the beta of your company (Group Project)

2.  In addition, find the beta of 3 different companies within the same industry as your company (Group Project).

3.  Explain to your classmates what beta means and how it can be used for managerial and/or investment decision

4.  Why do you think the beta of your company (individual project) and those of the 3 companies you found are different from each other? Provide as much information as you can and be specific.

Part 2: Capital Budgeting

Capital Budgeting Decision Methods

CAPITAL BUDGETING (PRINCIPLES & TECHNIQUES)

To avoid damaging its market value, each company must use the correct discount rate to evaluate its projects. Review and discuss the following:

• Compare and contrast the internal rate of return approach to the net present value approach. Which is better? Support your answer with well-reasoned arguments and examples.

• Is the ultimate goal of most companies--maximizing the wealth of the owners for whom the firm is being operated--ethical? Why or why not?

• Why might ethical companies benefit from a lower cost of capital than less ethical companies?