Therefore the risk free rate is most likely slightly higher than would be if a ten-year treasury bond was used to determine the risk free rate.
Part 4:

You are having second thoughts about your choice of a proxy company and are concerned that a wrong choice may impact on the investment decision. To alleviate your fears (and those of the board) you run a sensitivity analysis to see how changes in the beta estimate affect your investment choice. You include this analysis in your report to the board and discuss the implications of you analysis.

Since the calculations used in the previous section were based off of a historical figure of beta that represents more of a conglomeration than just a grocer it is necessary to consider what would happen if the beta was incorrect. Since both organizations are at least remotely similar in their scope of operations a deviation of…...

mla

Works Cited

Bloomberg. (2010, September 20). Government Bonds. Retrieved September 20, 2010, from Bloomberg:  http://www.bloomberg.com/markets/rates-bonds/government-bonds/australia/ 

Reuters. (2010, September 20). Reuters Financial. Retrieved September 20, 2010, from Reuters:  http://www.reuters.com/finance/stocks/overview?symbol=WES.AX 

The Reserve Bank of Australia. (2010, September 20). Statistical Tables. Retrieved September 20, 2010, from The Reserve Bank of Australia:  http://www.rba.gov.au/statistics/tables/index.html#interest_rates

Investment Analysis
Identify the Components of ealized eturn of Common Stock

The real return on the sale of stock is often referred to as the realized return as this is the true rate of return of the risk of investment. Many often mistake the realized return as the gain from the sale of the stock in the secondary market, or at most, the inclusion of dividends that have accrued over the period of ownership. However, as these are indeed components of the formula, the often overlooked area of the return is the tax.

The function of the realized return for common stock in all markets includes the dividend growth model added to the difference between stock purchase price and stock sales price. Therefore, if the stock paid a .10cent dividend on March 31, and the 1000 shares of stock was sold on April 1st, purchased at $20.00 and sold at $30.00, the realized…...

mla

References

Eisenberg, L., & Noe, T. (2001). Systematic risk in financial systems. Management Science, 47(2), 236-249. Retrieved from  http://search.proquest.com/docview/213173932?accountid=13044 

Ford, J. (1998). How to benchmark portfolio risk. Commercial Lending Review, 13(1), 60-62. Retrieved from  http://search.proquest.com/docview/229628253?accountid=13044 

Painter, M. (1995). Taking a WACC at private companies: CA. CA Magazine, 128(8), 35-36. Retrieved from  http://search.proquest.com/docview/203887480?accountid=13044 

Vijh, A. (1994). S&P 500 trading strategies and stock betas. The Review of Financial Studies (1986-1998), 7(1), 215-215. Retrieved from  http://search.proquest.com/docview/207667850?accountid=13044

Investment Analysis
Investing money for the future is one of the key components of creating a secure future, and retirement. While many Americans do not plan for future years, other then a company retirement plan and social security retirement benefits, research shows that when a person takes an active role in their retirement planning, they are more likely to create a future which will support their standard of living after they have stopped punching a clock, and commuting to the office.

Regarding the Social Security administration and the SSI benefit program, at its inception during the 1930's the system was based on one beneficiary receiving payments from over 20 contributors. As the population shifted toward longer lives, current estimates are that one beneficiary is receiving payments based on 8 workers paying into the system. In the near future, as the baby boom generation retires and Gen X and Gen Y workers are…...

mla

Company overview. 2003. Sunoco.com Accessed 6 Dec 2003.  http://www.sunoco.com .

Value Line Stock review services. 2003. Valueline.com Accessec 7 Dec 2003.  http://www.valueline.com 

Business and company resource center. 2003. Galenet Gale Group.com. Accessec 11 Nov 2003.  http://galenet.galegroup.com

Investment Analysis
There is a significant difference between bonds and stocks, and they should not be treated the same when evaluating a portfolio. There are a handful of similarities, such as the fact that their value derives from the net present value of expected future cash flows, but the two securities are fundamentally different.

A bond entitles the holder to a cash flow from the issuer. Equity represents a share of ownership in the company. From this arises the first key difference -- the risk. Risk refers to the chance that the expected cash flows will be disrupted. With equity, this means that the earnings could drop, reducing not only the dividend but also the future profit potential as well. The value of the company's cash flows is likely to change if the company's performance suffers a downturn. With a bond, the only risk is the risk of default. Default typically will…...

Financial Analysis
Over the past decade, increasing attention has been paid to the issue of corporate governance. As a result of multiple major scandals, new laws have been passed and the role of the SEC has been expanded. Sarbanes-Oxley introduced sweeping corporate governance reforms, and despite its high costs there are many tangible benefits. Many business advocates argue for lower regulatory standards, but there is a strong economic case to be made for higher regulatory standards.

The function of corporate governance is to protect the interests of shareholders. When a scandal occurs on the scale of Enron, billions of dollars of shareholder wealth are wiped out. The fallout from such governance failures has such a wide-ranging impact on the economy that the government must become involved, to preserve the overall health of the economy. The direct impacts of governance failure are on the shareholders. The wealth that they lose is taken out…...

Stock Analysis
FedEx Corporation (FDX) is the stock I have chosen for this exercise. The first page that Yahoo Finance shows has the stock price, last trade, change, previous close, open and bid/ask. There are also daily and annual ranges, volume and average volume, market cap, P/E, and dividend information. A small daily price chart is also there. This is the basic stock information, especially for day traders or short-term investors, or anybody looking for just a quick snapshot.

The "Historical Prices" link reveals a page where past FedEx prices can be found. The daily prices for the past few months are listed in a chart. Also, there is a search function, which enables the user to find the stock price on any given day. This can be sorted by daily, weekly or monthly. There is a sort function called "dividends." When a search for Jan 2, 2008 to Jan 2, 2009…...

"Pension reform in several emerging market countries has been associated with rapid growth in assets under management and a positive impact on the development of local securities markets." (Roldos, 2004) Finally, the stability of many international securities, located in Britain, Switzerland, or Germany, to take only a few examples, means that using the diverse potential of international investment opportunities does not necessarily entail a high risk.
However, many international sources of revenue tend to be more unpredictable in their returns. A pension fund's security, especially for an older man or woman with retirement on the horizon must be of primary importance. Secondly, international developments can be difficult to predict in the long-term. And finally, international securities may be less tightly regulated in terms of their ethical scrutiny by the local governments, leading to "price distortions, bubbles," and hence greater investment risks. (Roldos, 2004)

orks Cited

China's Pension Fund to Invest Abroad." (10…...

mla

Works Cited

China's Pension Fund to Invest Abroad." (10 October 2006) International Business

Times. Retrieved 25 Nov2006 at  http://www.ibtimes.com/articles/20061010/china-039-s-state-pension-fund.htm 

Roldos, Jorge. (Sept 2004). "Pension Reform, Investment Restrictions, and Capital

Markets." IMF Policy Discussion Paper. Retrieved 25 Nov2006 at  http://www.imf.org/external/pubs/ft/pdp/2004/pdp04.pdf

Using values found in a table of factors for calculating the present value of a dollar; the periods one through four have the following present value factors:

Year One= .9259

Year Two= .8573

Year Three= .7938

Year Four= .7350

Next these factors are multiplied individually by the net cash flow generated by the investment in each period.

Year One= $500,000

Year Two= $450,000

Year Three= $350,000

Year Four= $320,000

The multiplication calculation reveals the discounted cash flow values:

Year One= $500,000*.9259= $462,950

Year Two= $450,000* .8573= $385,785

Year Three= $350,000* .7938= $277,830

Year Four= $320,000*.7350= $235,200

The total sum of the cash flows net present value is $1,361,765; as such the net present value as compared to the overall investment of $1,200,000 is positive $161,765, and therefore the projected rate of return on this investment is greater than the eight percent cost of capital, and the investment…...

mla

References

Marshall, D. & McManus, W. (1996). Accounting: What the Numbers Mean.

Third Edition. McGraw Hill.

74). This dearth of information was likely caused by a reluctance to examine investment decisions on the part of investors themselves; nobody likes finding out that their "thought-out" considerations are not any more accurate than gut choices, and in fact, those gut choices likely had more influence than all of their mental work.
In the last decade, however, strides have been made in the study and analysis of investment behavior, revealing surprising details about what goes in to making stock trades. The first important work in the study of individual investment behavior was the realization that human beings do not always act rationally in regards to financial decisions, because according to the previously quoted Brad Barber and his co-author Terrance Odean, "the field of modern financial economics assumes that people behave with extreme rationality, but they do not" (Barber & Odean, 1999, p.41). Although "differences in investor literacy about financial markets"…...

mla

Works Cited

Barber, Initials, & Odean, Initials. (1999). The courage of misguided convictions. Financial Analysts Journal, 55(6), 41-55.

Dhar, R, & Zhu, N. (2006). Up close and personal: investor sophistication and the disposition effect. Management Science, 52(5), 726-740.

Grinblatt, M, & Keloharju, M. (2001). What makes investors trade?. The Journal of Finance,

56(2), 589-616.

83% in 2008 compared to 2007, but by 127.10% when compared to 2004. Shareholder equity is also included in the ascendant trend revealed by Apple for all financial highlights. By 2008, it had increased by 314.30% relative to 2004. Compared to the previous year, the growth was of 44.71%.
The final row of the table deals with the net cash provisions used by the investing operations. These do not reveal a trend, increasing in some years and decreasing throughout others. They however show that Apple has been active in seizing investment opportunities, and that, while some project have returned a significant return on investment, in other cases, the benefits have yet to materialize. In 2008 as compared to 2007, the cash provisions used by the investment operations met an increase of 152.04%. This is the single sign in the financial analysis which may suggest that Apple should not invest any more…...

mla

References

2009, Website of Apple Inc.,   accessed on February 11, 2009http://www.apple.com/last 

2009, Website of Dell Inc.,   accessed on February 11, 2009http://www.dell.com/last 

2009,Website of the IBM Corporation,   accessed on February 11, 2009http://www.ibm.com/us/last 

2009, Investopedia, accessed on February 11, 2009http://www.investopedia.comlast

Investment in Higher Education as a Tool for Promoting a Stronger Economy: Examining the Literature eviews of Previous Dissertations
The following research is an exercise where three dissertations under a similar topic were mined in order to better understand their organizational structure, thematic content, and approach to examining the current discourse. The primary topic here is going to highlight how reinvestment into higher education can help facilitate for a stronger, more stable economy based on a number of factors and indicators. The research which follows explores three similar dissertations that show a clear connection between investment in higher education and positive economic factors.

Dissertation

Carnoy, Martin. (2006). Working paper no. 297: Higher education and economic development: India, China, and the 21st century. Stanford Center for International Development. Web. http://www.stanford.edu/group/siepr/cgi-bin/siepr/?q=system/files/shared/pubs/papers/pdf/SCID297.pdf

I. Education and Economic Growth

A. Macroeconomic Approaches to the Education-Economic Growth elation

i. Previous studies have shown that when there is a higher level of education…...

mla

References

Carnoy, Martin. (2006). Working paper no. 297: Higher education and economic development: India, China, and the 21st century. Stanford Center for International Development. Web.  http://www.stanford.edu/group/siepr/cgi-bin/siepr/?q=system/files/shared/pubs/papers/pdf/SCID297.pdf 

Howe, Caroline. (2009). The Role of Education as a Tool for Environmental Conservation and Sustainable Development. Imperial College London. Web.  http://www.iccs.org.uk/wp-content/thesis/phd-howe,caroline09.pdf 

Lundvall, Bengt-Ake. (2007). Higher education, innovation and economic development. Department of Business Studies Aalborg University, Denmark. Web. http://dimaricerca.univpm.it/EconInno/Economics%20of%20innovation/BengtAkeLundvall_higher_educ.pdf

In the future, this could result in some kind of major restructuring to deal with these issues. The problem is that these changes will occur when the company is facing greater challenges. This will hurt their competitive position, profit margins, stock performance and brand image. The above information will impact an investor's decision, by making them more cautious about purchasing the company over the long-term. ("The Coca Cola Company," 2012) ("Pepsi Co," 2012)
As far as Pepsi Co is concerned, the management has taken a continuing focus on expanding into new areas. This has resulted in the company owning different food, beverage and snack manufacturers. In these situations, the firm is concentrating on the impact that key acquisitions will have on Pepsi and its ability to enter new markets. ("The Coca Cola Company," 2012) ("Pepsi Co," 2012)

This strategy has proven to be highly successful. As the company is able to…...

mla

References

The Coca Cola Company. (2012). Yahoo Finance. Retrieved from:  http://finance.yahoo.com/q/pr?s=KO+Profile 

Pepsi Co. (2012). Yahoo Finance. Retrieved from:  http://finance.yahoo.com/q/pr?s=PEP+Profile 

Pepsi Co Concludes. (2011). Seeking Alpha. Retrieved from:  http://seekingalpha.com/article/293068-pepsi-concludes-wimm-bill-dann-buy-in-largest-ever-foreign-acquisition-of-russian-company 

Bell, L. (2003). The Story of Coca Cola. North Mankato, MN: A +

This would play a role in helping to bring the Czech Republic into the EU in 2004. The effect that this would have on the Prague Stock Exchange is that it would cause it to rise to 1,940. At which point, it would have a severe down trend economy during 2008 and into 2009. The only difference is: that the various reforms and economic policies that the government was using at the time, helped to contribute to mitigating the effects of the slowdown (as the economy would experience a less severe economic contraction of 3.4%). ("Czech Republic")
The price movements of the Slovak equity market in the last 10-15 years

The ratislava Stock Exchange was founded in 1991 and has been in operation since 1993. ("asic Information") Like what occurred in the Czech Republic the Slovak stock market went through two bear markets that would last until 1998 -- 1999. Where,…...

mla

Bibliography

"Basic Information." Bratislava Stock Exchange. 2010. Web. 24 Apr. 2010

"Czech Republic." State Department. 2009. Web. 24 Apr. 2010

"History of the Exchange." Prague Stock Exchange. 2009. Web. 24 Apr. 2010

41 in the next three years. The current price for al-Mart implies strong growth prospects. The company does have a sound strategy to retain its new customers and refocus growth efforts on less-saturated markets overseas.
In short, while there can be little doubt as to al-Mart's operational excellence, it is not necessarily a great investment. Growth has in recent years been of the slow and steady variety. The company's present valuation may be symptomatic of its status as a safe haven for investors during tough economic times. This means that the growth implied by its current share price may not be justified. Therefore, while al-Mart is a great company to own, it may not be the best investment at its current price and with the market beginning to show signs of recovery. The 0.20 beta and historic low volatility mean that al-Mart shareholders will not reap the benefits of market increases.…...

mla

Works Cited:

Wal-Mart 2009 Annual Report. Retrieved June 7, 2009 from  http://walmartstores.com/sites/AnnualReport/2009/ 

Some financial data and ratios from MSN Moneycentral. Retrieved June 7, 2009 from  http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=WMT 

Cheng, Adriana. (2009). Wal-Mart needs to prove it's more than a recession play. Marketwatch. Retrieved June 7, 2009 from  http://www.marketwatch.com/story/wal-mart-needs-to-show-legs-beyond-recession-play 

Loth, Richard. (n.d.) Financial Ratio Tutorial. Investopedia. Retrieved June 7, 2009 from  http://www.investopedia.com/university/ratios/

Investment in South Africa
In your judgment, were the possible utilitarian benefits of building the Caltex plant in 1977 more important than the possible violations of moral rights and of justice that may be involved? Justify your answer fully by identifying the possible benefits and the possible violations of rights and justice that you believe may be associated with the building of the plant, and explaining which you think are more important.

The possible utilitarian benefits of building the Caltex plant in 1977 were not more important than the possible -- or actual -- violations of moral rights and justice involved. The violations of moral rights and justices should have been prioritized. Looking back on the situation, of course, we have the benefit of knowing history, and the case of the South African apartheid is an exemplary case for the power of socially responsible investment movement.

In 1977, when the Caltex plant was…...

mla

Resources

1. Jack Magarrell, "U.S. Adopts Stand on Apartheid: Backed on Many Campuses," The Chronicle of Higher Education, 12 March 1979.

2. See Herman Nickel, "The Case for Doing Business in South Africa," Fortune, 19 June 1968, p. 72.

3. Investor Responsibility Research Center, Analysis E-Supplment No. 9, 7 April 1977, p. E 114.

4. Texaco Proxy Statement, 1977, item 3.