Managerial finance 6

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Beta and Capital Budgeting

Part 1: Beta (500 words APA Format)

Visit the following web site or other websites:

Yahoo Finance

1.  Search for the beta of Intel corporation

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

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

4.  Why do you think the beta of Intel corporation 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 (500 words) 

Before you respond to Part 2  review the following information on Capital Budgeting Techniques

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?

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