Discussion Post: Beta and Capital Budgeting
Part I: Beta
Visit the following web site or other websites: Yahoo Finance
i. Search for the beta of your company (Group Project)
ii. In addition, find the beta of 3 different companies within the same industry as your company (Group Project).
iii. Explain to your classmates what beta means and how it can be used for managerial and/or investment decision
iv. 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 II: Capital Budgeting
Before you respond to Part II of discussion 6 review the following information on Capital Budgeting Techniques
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:
i. 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.
ii. 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?
iii. Why might ethical companies benefit from a lower cost of capital than less ethical companies?
Homework
From Chapter 12, page 379 WEB-BASED CASE STUDY, THE FUTURE OF LIFE INSTITUTE. Read the case and answer all questions
Elon-Musk donated $10 million to a foundation called the Future of Life Institute. The institute published an open letter from an impressive array of AI experts who call for careful research into how humanity can reap the benefits of AI "while avoiding its pitfalls." Go online and find out about the institute's initiatives. What are its primary goals? How can humans establish and maintain careful oversight of the work carried out by robots? How valid are Elon Musk, Bill Gates, and Stephen Hawking's concerns? What other concerns should the public bear in mind as the technological revolution advances?
Format your homework according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.