Topic: 1.) Beta, 2.) Capital Budgeting
Part 1: Beta
Visit the following website or other websites: Yahoo Finance.com
1. Search for the beta of your company – “Keurig Dr. Pepper”
2. In addition, find the beta of 3 different companies within the same industry as the Keurig Dr. Pepper company.
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-B: Capital Budgeting – Capital Budgeting Decision Methods, 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
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