Business Finance – Management
RETURN AND RISK RELATIONSHIP: CAPITAL ASSET PRICING MODELThe CFO of Baldwin Corporation, Gregg Williams has decided to invest some money in the financial market to diversify the risks of business operations and increase the rate of return. He has been reading corporate finance books and journal articles to enhance his knowledge of risk/return relationships, capital asset pricing model (CAPM), cost of capital, and valuation.On the risk/return relationship, Gregg has learned that there is a positive relationship between risk and return. This implies that the higher the risk, the greater the expected return on investment. This relationship is clearly explained by the capital asset pricing model in this equation:RE = RF + ? x (RM RF)where RE = expected return of the security, RF = the risk-free rate, ? = Beta of the security, RM = the expected return on the market, and (RM RF) represents the difference between the expected return on the market and the risk-free rate.According to the CAPM, the expected return of any security depends on its risk measured by its beta. Gregg found out that the beta is a measure of the risk of security arising from exposure to general economic and market movements i.e. systematic risk as opposed to business-specific risks or factors (i.e. unsystematic risk). The higher the beta, the greater the systematic risk and vice versa. The market portfolio of all investable assets has a beta of 1. Gregg learned that If ? = 0, then the asset has no risk of financial loss. Therefore, the expected return of the security should be equal to the risk-free rate. If ? = 1, that asset has the same risk as the market and the expected return should equal the expected return on the market such as the S&P 500 market index. To Gregg, this makes sense because the beta of the market portfolio is exactly 1. However, if a securitys ? = 2, then that security is twice riskier than the market and the expected return should be higher than the return of the market portfolio.Gregg understands that the risk-free rate used in the CAPM is the government-issued treasury bill rate. Since the treasury bill has no risk, any other investment having some risk will have to have a higher rate of return than the risk-free rate in order to induce an investor to invest in that security. Gregg is considering the stock of Adobe Inc. and Exxon Mobil. Adobe Inc. has a beta of 1.5 and Exxon Mobil has a beta of 0.8. The risk-free rate is 3%, and the difference between the expected return on the market and the risk-free is 8.0%.Baldwin Inc. is retaining you as the financial consultant to work with Gregg to analyze these investment options.1. Using the capital asset pricing model, calculate the expected return for Adobe Inc. and Exxon Mobil stocks.2. You want to calculate the average return of Adobe Inc. to see how the stock has performed over the past five years:Exhibit 1: Historical Returns of Adobe Inc.(((Please Check Attachment))a. Using the historical returns above, what is the average return for Adobe Inc. stock?3. You notice that stock returns fluctuate daily in the financial market making it risky to invest in. You want to use standard deviation, ? to assess the volatility of Adobe Inc. stock if mean return is 15.20% and standard deviation is 12%. What is the possible return of this stock one standard deviation from the mean if the return is normally distributed? (Note: expected return = mean return ± 1?).4. You want to use the total market return approach to estimate the rate of return on another stock which Gregg wants to consider for the investment portfolio. The stock is selling for $25 and pays a dividend of $2 per share during the year. You think that because of the profitable capital investment that the company is undertaken, its stock price will appreciate to $28 by the end of next year.a. Calculate the dividend yield and the percentage capital gain of this stock.b. What is the expected total return of this stock?5. You are looking at sources of risk for the investment portfolio and came across systematic risk and unsystematic risk in a financial journal. The systematic risk is defined as any risk that affects the whole economy or a large number of assets to a greater or lesser degree. And the unsystematic risk is a risk that affects specific assets or small groups of assets.a. List two examples each of systematic risk and unsystematic risk.6. Gregg wants you to estimate the weighted average cost of capital (WACC) for Verizon LLC. The IRR computed on a capital project for Verizon is 12%. Gregg wants to see if it will be a good investment. He thinks that if IRR > WACC then it will be a good investment to consider. The market values for Verizons debt and equity are $40 million and $60 million respectively. The total value of the firm is $100 million, implying that the weight of debt is 40% ($40 million /$100 million) whereas the weight of equity is 60% ($60 million /$100 million). Assume a tax rate of 35% for Verizon.a. Estimate WACC for Verizon if the cost of equity is 13.32% and cost of debt is 5%. (note: WACC = cost of debt (1 tax rate) (weight Debt) + cost of equity (weight Equity).
writing paperPrior to completing this assignment, review the pertinent sections of Chapter 3. You have been the manager of a Dunkin Donuts store in the Midwest for the past two years. The store is owned by a Dunkin Donuts franchisee who owns 20 other Dunkin Donuts locations. Your employer took an employee inventory and examined all current employees. It has been noted by the owner that you have a highly successful track record. You have been recognized for doing an exceptional job staffing, leading, training, coaching, and managing people. You have been recognized for successfully managing all key components of your store and have successfully managed key business drivers such as cash, profits, growth, asset utilization, and people. In regards to the metrics that are used to measure their stores for sales, quality, and customer service, your store is the top performing store in their system.Congratulations! You have just been promoted to district manager! The Dunkin Donuts franchisee sees your growth potential and the growth potential in your geographic area. The owner now has committed significant capital and plans to open five new locations over the next two years. You will be given complete autonomy, authority, and responsibility to structure, staff, and operate these five new locations. You will be playing a key role in this expansion for growth.For this assignment, you will prepare a four to five-page paper in which you explain your chosen job design and organizational design as the new District Manager for Dunkin Donuts.You must organize your paper using the following section headings and include additional section headings asneeded:IntroductionProvide a well-organized introduction to the paper.Job DesignExplain your chosen job design including job analysis, job description and job specification.Organizational DesignExplain why the chosen organizational design was chosen.ConclusionYour paper must include at least three scholarly sources in addition to the textbook and be formatted according to APA style guidelines as outlined in the Ashford Writing Center.The Case Study: Opening Your New Dunkin Donuts Locations paperMust be four to five double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the Ashford Writing Centers APA Style (Links to an external site.).Must include a separate title page with the following:Title of paperStudents nameCourse name andnumberInstructors nameDate submittedMust use at least three scholarly, peer-reviewed, and/or credible sources inaddition to the course text.The Scholarly, Peer Reviewed, and Other Credible Sources (Links to an external site.) table offers additional guidance on appropriate source types. If you have questions about whether a specific source is appropriate for this assignment, please contact your instructor. Your instructor has the final say about the appropriateness of a specific source for a particular assignment.Must document any information used from sources in APA style as outlined in the Ashford Writing Centers Citing Within Your Paper (Links to an external site.) guide.Must include a separate references page that is formatted according to APA style as outlined in the Ashford Writing Center. See the Formatting Your References List (Links to an external site.) resource in the Ashford Writing Center forspecifications.Carefully review the Grading Rubric (Links to an external site.) for the criteria that will be used to evaluate your assignment.
Complete: Case 3A (Auerbach Enterprises)Preview the documentIn this case, you are provided the overhead cost data for the Auerbach Enterprises. Management needs advice in determining how to allocate these costs utilizing a job order costing system either department-wide or company-wide. Address Questions 1 through 5 located at the end of the case. Based on the case questions, you are required to provide a three to five double-spaced written report addressing managements concerns and providing recommendations. The written report should be properly formatted according to APA guidelines and demonstrate research and critical thinking skills. Conclusions and recommendations should be supported by at least two scholarly sources from the Ashford Library or other external sources, excluding the textbook.For Questions 1 through 4, you will need to complete several calculations. Be sure to label and clearly identify your work to demonstrate your understanding of the concept even if you arrive at the incorrect answer. The calculations should be included as part of your analysis and written recommendations required for submission.For Question 5, fully address managements concerns as part of your written analysis and recommendation using the new or the previous calculations to support your recommendation/explanation. The written analysis should be supported by at least two scholarly sources, excluding the textbook.Week 2 Written Assignment should:Demonstrate graduate level work including appropriate research and critical thinking skills.Be presented as a written analysis (not a question/answer format).Incorporate case questions into the overall analysis.Follow APA formatting guidelines including title page, reference page and in-text citations.Consists of three to five double-spaced pages of content.Provide at least two scholarly sources, excluding the textbook.Carefully review the Grading Rubric (Links to an external site.) for the criteria that will be used to evaluate your assignment.
For the Course Project, you will prepare a quality improvement program.Continuous quality improvement covers many areas. Throughout the course, pay particular attention to what attributes constitute a quality improvement team and what questions this team attempts to answer.Select one of the following six high-risk areas for your project.PsychiatryLong-term careHome healthcareEmergency roomObstetrics and neonatologySurgeryResearch the area you selected using at least three scholarly sources. Identify and classify all of the risks associated with these areas. Describe the nature of the risks to patients, healthcare professionals, and healthcare facilities. You may develop a table to present this information, create a Word document report, or a PowerPoint presentation.To support your work, use your course and textbook readings and also use scholarly online sources. As in all assignments, cite your sources in your work and provide references for the citations in APA format.Submission Detail:Your assignment should be addressed in a minimum 2- to 3 pages, APA document that includes an introduction and conclusion.
Thoughtfully answer one of the following questions, then meaningfully respond to two other students answers.How did China and Japan respond to the coming of the Europeans, and what explains the differences? What impact did European contacts have on these two East Asian civilizations through the end of the 18th century?
Discussion 1In Chapter 3, you were introduced to three types of costs associated with a manufactured product direct materials, direct labor, and manufacturing overhead. Explain how these costs are associated with the manufactured product. Why are some of these costs allocated to the product through costing methods such as job order costing or process costing? As part of your response, please read the article First Solar preview: Manufacturing costs, project order book in the spotlight (Links to an external site.) and provide a specific example of this companys manufacturing costs. Your initial post should be 200-250 words. Respond to at least two of your classmates postsDiscussion 2Explain the similarities and differences between job order costing and process costing. In your explanation, provide examples of when job order costing and process costing would be most appropriate. Your initial post should be 200 to 250 words
You are about to submit the FINAL DRAFT of your EXAMPLE MEMO. Before you proceed, be certain your memo has been proofread, which means all grammar, punctuation, and spelling errors have been eliminated. Be absolutely certain you have plenty of clear, detailed, specific examples to support your ideas. Basically, make sure you are comfortable with your effort on this assignment. Be sure the MEMO FORMAT is correct!
Consider a product you own and use regularly today (smart phone, e-reader, power tool, etc.). With the rapid pace of technological change, you may ask yourself how this product will change in 5 or 10 years instead of whether it will change. It may be realistic to wonder if a ubiquitous product of today could be replaced and obsolete in that amount of time. Compare the pace of change to older products such as typewriters, which sold commercially for decades without experiencing much change at all until improvements in computers, word processors, and printers rendered typewriters nearly obsolete. Similarly, services such as milk or ice delivery may have been common at one point in time but no longer exist today. As companies examine their products and services, they need to anticipate the impact of product life cycles. Each stage of the product life cycle (introductory, growth, maturity, and decline) has its unique marketing needs, which require different promotional and pricing strategies.]For this Assignment, you will apply concepts of the product life cycle, branding, pricing tactics, and distribution channel. Consider how products are improved in order to extend their product life cycle. What are some ways to make an existing product more appealing to consumers?Consider the following scenario:Generic Electronics is introducing a new electronic device with cutting-edge technology. The managers are expecting the product life cycle, from introduction to decline, will last about 3 years before this device is replaced by a newer version of the technology.To prepare for this Assignment:Review this weeks Learning Resources.Review the scenario of Generic Electronics.Refer to the Academic Writing Expectations for 2000/3000-Level Courses as you compose your Assignment.By Day 7Submit your responses to the following prompts.What type of brand message should Generic Electronics send to its potential customers? Explain your answer. (75 words, or 1 paragraph)How should Generics marketing managers adjust this devices branding throughout the four stages of the product life cycle (PLC)? In your response, be sure to briefly describe each stage of the product life cycle. (150225 words, or 23 paragraphs)During the introductory stage of this device, which pricing strategy should Generic Electronics use? When the device hits the maturity stage, how should the pricing strategy be different? (75 words, or 1 paragraph)Which distribution channel should Generic Electronics use? The options are direct sales (i.e., business to consumer, or B2C) through the companys eCommerce and mCommerce sites, or indirectly (i.e., business to business, or B2B) through other retailers such as Best Buy and Amazon. Discuss the pros and cons of these options. (150225 words, or 23 paragraphs)Why is it important for Generic Electronics to have an integrated marketing communication plan? (75150 words, or 12 paragraphs)How should Generics marketing managers ensure they are utilizing integrated marketing communication and are sending consistent messages throughout the different traditional and digital marketing channels? (75150 words, or 12 paragraphs)
Part 1After reading Gartner Top 10 Strategic and Technology Trends of 2020 (link below). Identify five cybersecurity and security architecture threats and the ways in which you believe the threats can be mitigated and which trend they align with.https://www.gartner.com/smarterwithgartner/gartner-top-10-strategic-technology-trends-for-2020/Part 2Upon completing Part 1, please research cybersecurity certifications that can be attained by individuals. An example would be Security+ or CISSP offered by ISC2. Identify what you think is the best cybersecurity certification to obtain and explain way have chosen this certification.This assignment should be in APA format and have to include at least five references. It should also be written in the first person perspective.