CAPITAL BUDGETING (PRINCIPLES & TECHNIQUES)

Beta and Capital Budgeting Part 1: Beta Visit the following website or other websites: Yahoo Finance- https://finance.yahoo.com/ 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 means 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 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?