discussion beta and capital budgeting

Part 1: Beta

Visit the following web site or other websites:

Yahoo Finance

1. Search for the beta of your company (Kroger Co)

2. In addition, find the beta of 3 different companies within the same industry as your company (Kroger Cot).

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?

Instructions:

1. Post your initial response no later than Sunday

2. Read and respond to at least 3 of your classmates’ posts. Below are suggestions on how to respond to your classmates’ discussions:

a. Ask a probing question, substantiated with additional background information, evidence or research.

b. Share an insight from having read your colleagues’ postings, synthesizing the information to provide new perspectives.

c. Offer and support an alternative perspective using readings from the classroom or from your own research.

d. Validate an idea with your own experience and additional research.

e. Make a suggestion based on additional evidence drawn from readings or after synthesizing multiple postings.

f. Expand on your colleagues’ postings by providing additional insights or contrasting perspectives based on readings and evidence.

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