Beta and Capital Budgeting
Part 1: Beta (500 words APA Format)
Visit the following web site or other websites:
1. Search for the beta of Intel corporation
2. In addition, find the beta of 3 different companies within the same industry as your company.
3. Explain what beta means and how it can be used for managerial and/or investment decision
4. Why do you think the beta of Intel corporation 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 (500 words)
Before you respond to Part 2 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?
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