Categories
Finance

Explain the three types of risk and beta, and how these concepts relate to a company’s required rate of return.

My public traded company is Coca-Cola.
n this assignment, you will recalculate the value of the company’s stock based on your company’s specific required rate of return. To do this, you will calculate the required rate of return for your chosen publicly traded company using the capital asset pricing model (CAPM).
n your paper, address the following five parts in a Word document:
Part 1: (two paragraphs)
Explain the three types of risk and beta, and how these concepts relate to a company’s required rate of return.
Part 2: (two paragraphs)
Find your company’s beta from a credible source.
You can get this information from the Mergent database or by looking it up on a financial website like Yahoo! Finance (Links to an external site.).
Compare your company’s beta to the market beta of 1.0.
Calculate the company-specific required rate of return using the CAPM formula.
Show all calculations.
Use the beta you determined for your chosen company
Use a risk-free rate of 2.0%.
For the market risk premium, use the following assumptions:
For a large capitalization company (greater than $10.0 billion in market capitalization) use 6.0% as the market risk premium.
For a mid-cap company (between $2.0 billion and $10.0 billion in market capitalization) use 8.0% as the market risk premium.
For a small-cap company (less than $2.0 billion in market capitalization) use 11.0% as the market risk premium.
Compare the company-specific required rate of return you calculated to the required return based on size you used in Section 3: Dividend Analysis and Preliminary Valuation in Week 3 for the constant growth formula.
Determine whether the company-specific required rate of return higher or lower than the rate of return based on size that you used in Section 3 in Week 3 for the constant growth formula?
Explain the difference in required rate of returns.
Part 3: (two to four paragraphs)
Recalculate both estimates (the low-end and the high-end) of the stock price using the constant growth formula.
Use the company’s specific required rate of return you determined using the CAPM.
Review your selected high-end and low-end growth rates from Week 3.
If either growth rate is higher than the new CAPM discount rate, you must reduce your selected growth rate(s).
Your growth rates cannot be higher than the discount rate, because the calculations will result in a negative stock price, which is not meaningful.
Include a short, written explanation to explain the revised growth rates.
Show your revised high-end and low-end stock price calculations
Compare each of the two recalculated stock prices to the current stock price per share of the company.
State whether each recalculated stock price (low-end and high-end) is above or below the current market price.
State whether each recalculated stock price (low-end and high-end) indicates if the stock price is currently under-valued or over-valued in the market.
(See Section 9.3: Required Returns in your course text.)
State your recommendation for your concluded stock price for the company.
Use either the high-end stock price or the low-end stock price from the constant growth formula using the CAPM required rate of return.
Justify the conclusion of value for your stock based on the most important financial facts from the prior weeks’ analysis.

Categories
Finance

What do these metrics tell you about the financial health of the company?

You are writing a book on how to evaluate performance evaluation for a company.
Respond to the following in a minimum of 175 words:
Think about some of the influences and measures of company performance that you read about this week.
Explain the use of return on assets (ROA) and the price-to-earnings (PE) ratio in evaluating the performance of a company.
Write about how to calculate ROA and PE ratio and how market conditions can affect these metrics.
Share the ROA and PE ratio for a company you are familiar with. What do these metrics tell you about the financial health of the company?

Categories
Finance

What is the optimal hedging strategyfor F Mayer Imports given the situations?

Learning Goal: I’m working on a finance question and need guidance to help me learn.
What are the key priorities of F Mayer Imports?
What are the pros &cons of each proposed solutions in Exhibit 3?
What is the optimal hedging strategyfor F Mayer Imports given the situations?

Categories
Finance

Is this topic in the field of finance, what makes it finance in your eyes?

Learning Goal: I’m working on a finance question and need an explanation and answer to help me learn.
the topic is : the impact of migration on the economic growth
Is this topic in the field of finance, what makes it finance in your eyes?
My school says that this topic is more related to economics I need to prove its more related to finance,

Categories
Finance

Include how you would feel about risk and reward with your decisions effecting the financial well-being of your employees.

Learning Goal: I’m working on a finance discussion question and need an explanation and answer to help me learn.
DISCUSSION PROMPTDescribe how raw human emotion dictate your financial decisions. Illustrate either with at least one example.
Does this impact your decision of your chosen five stocks (Coca-Cola Co, Apple Inc, Advance Micro Devices Inc, Exxon Mobil Corp, Procter and Gamble Company)?
Include how you would feel about risk and reward with your decisions effecting the financial well-being of your employees.

Categories
Finance

Describe how raw human emotion dictate your financial decisions.

Learning Goal: I’m working on a finance discussion question and need an explanation and answer to help me learn.
Discussion PromptDescribe how raw human emotion dictate your financial decisions. Illustrate either with at least one example.
Does this impact your decision of your chosen five stocks (Microsoft Corporation, NVIDIA Corporation, AstraZeneca PLC ADR, VISA Inc, Walmart Inc)?
Include how you would feel about risk and reward with your decisions effecting the financial well-being of your employees.

Categories
Finance

Identify at least two changes to the Unemployment Insurance Policy that were instituted in March 2020 in response to the COVID-19 crisis.

Learning Goal: I’m working on a finance question and need a sample draft to help me learn.
Visit the Bureau of Labor Statistics website and identify the national unemployment rate. How do you interpret this rate? Next, read about the Unemployment Insurance in the chapter on Unemployment. Identify at least two changes to the Unemployment Insurance Policy that were instituted in March 2020 in response to the COVID-19 crisis. You can read more about the Unemployment policies here. What might be some of the short-term and long-term consequences of this change.

Categories
Finance

Does this impact your decision of your chosen five stocks?

Learning Goal: I’m working on a finance discussion question and need an explanation and answer to help me learn.
Describe how raw human emotion dictate your financial decisions. Illustrate either with at least one example.
Does this impact your decision of your chosen five stocks?
Include how you would feel about risk and reward with your decisions effecting the financial well-being of your employees.
Reply with comments/questions/feedback to at least two of your classmates.

Categories
Finance

Does this mean that a project’s NPV would be less if there were no taxes?

Depreciation provides a sort of shield against taxes. If there were no taxes, there would be no depreciation tax shields.
Does this mean that a project’s NPV would be less if there were no taxes? Why?

Categories
Finance

Are there any risks to this approach when compared to NPV?

Internal Rate of Return (IRR) is often used as an alternative to Net Present Value (NPV) valuations. One benefit associated with IRR is that the current interest rate does not impact its valuation.
What are some other benefits associated with IRR? Are there any risks to this approach when compared to NPV?