Business Finance
Please answer 3-Questions

Campbellsville University

Question Description

Please answer 3-Questions and there are 3 questions to answer provide comments and ask me if you have any doubts

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Question 1) 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 (Group Project). 3. Explain to your classmates what beta mean and how it can be used for managerial and/or investment decision 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 specific. Part 2: Capital Budgeting Before you respond to Part 2 of discussion 6 review the following information on Capital Budgeting 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? Question 2) Working Capital Management Cash Conversion Cycle Cash Budget 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. Question 3) 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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Question 1)
Beta can be described as a measure of relative volatility. It is used to measure the
systematic risk of a portfolio or security in comparison to the whole market. It is a multiplicative
factor. When investing, beta is used as a fundamental tradeoff between maximizing returns a
minimizing risk. A good example is when a company has a beta of 2; it means its volatility is
twice the overall market. When the beta is negative, it indicates an inverse relation to the overall
market. This negative beta is highly unlikely. If we expect investment returns of 5%, then a
return of 10% of the company is expected. On the other hand, a decline in the market of -5%
would result in -10% returns (loss).
The following are the current Beta coefficient of four American companies for the year
2018 based on the S&P 500 index. Exxon Mobil (0.85), Starbucks (0.66), JPMorgan Chase
(1.110) and Goldman Suchs (1.24). Looking at the four companies, we can observe that the beta
of Goldman Suchs is the highest meaning that its stock is more volatile than the other three while
Starbucks is the least volatile...


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