Beta and Capital Budgeting
Part 1: Beta
Visit the following web site or other websites:
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
3. Explain to your classmates what beta mean and how it can be used for managerial and/or
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
Part 2: Capital Budgeting
Before you respond to Part 2 of discussion 6 review the following information on Capital
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?
Working Capital Management
Cash Conversion Cycle
Close to 50% of the typical industrial and retail firm's assets are held as working capital. Many
newly minted college graduates work in positions that focus on working capital management,
particularly in small businesses in which most new jobs are created in today's economy.
To prepare for this Discussion: select two of the following components of working capital
management: the cash conversion cycle, the cash budget, inventory management, and credit
policies. Think about scenarios in which your selected topics were important for informing
decision making. Be sure to review the video links above and conduct additional research using
academically reviewed materials, and your professional experience on working capital concepts
to help develop your scenarios. Support your discussion with appropriate examples including
numerical examples as necessary.
Consider the content of this class as they relate to financial acuity and managerial decision
making.Base on the course content, discuss new skills you acquired from this class?How would
you apply your new knowledge your current and/or future profession?
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