Assignment: Beta and Capital Budgeting
Part A: Beta
Visit the following web site or other websites:
Yahoo Finance
• Search for the beta of Microsoft Corporation
• In addition, find the beta of 3 different companies within the same industry as your company (Group Project).
• Explain to your classmates what beta means and how it can be used for managerial and/or investment decision
• 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 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:
• 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?
Format your assignment according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the assignment, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.