Discussion Post: Beta and Capital Budgeting
Part A: Beta
Visit the following web site or other websites:
Yahoo Finance
a) Search for the beta of your company (Wendy's)
b) In addition, find the beta of 3 different companies within the same industry as your company (Wendy's).
c) Explain to your classmates what beta means and how it can be used for managerial and/or investment decision
d) Why do you think the beta of your company and those of the 3 companies you found are different from each other? Provide as much information as you can and be specific.
Part B: Capital Budgeting
Before you respond to Part 2 of discussion 6 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:
a) 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.
b) 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?
c) Why might ethical companies benefit from a lower cost of capital than less ethical companies?
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.