1. What you learned about stock valuation. Provide examples of how your company have used the concepts. Do you believe financing a company's operation using stock is better than financing with bonds? Why or why not? Support your discussion with a numerical example.
Based on the materials presented in the "Risk and Return" video, present a discussion on why the materials are important in financial decision making.
How would you incorporate risk and return in your financing decisions?
2. Cost of Capital (Youtube Video)- What is your reaction to Harriet's suggestion of using the cost of debt only? Is it a good idea or a bad idea? Why?
Do you think capital projects should have their own unique cost of capital rates for budgeting purposes, as opposed to using the weighted average cost of capital (WACC) or the cost of equity capital as computed by CAPM? What about the relatively high risk inherent in this project?
How can you factor into the analysis the notion of risk so that all competing projects that have relatively lower or higher risks can be evaluated on a level playing field?
Format- Provide appropriate APA in-text citations and references.
At least 300 words and require some information from the text, academically reviewed papers, some significant commentary that requires knowledge of the subject matter, a web link to an article or other source in order to be accepted.