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The Nature of Managerial Risk As a manager responsible for the day-to-day operations within your department, which might be sales, marketing, production, etc., you probably do not think much about the daily price of your company's stock or the firm's overall value if it is not publicly traded. However, your proposed projects can impact stock price or firm value in different ways. For example, if investors in your company perceive little value in plant expansion or an expensive equipment modernization program due to slowing sales, such a reaction will result in a stock price drop or a lowering of the firm's overall value. What you propose as a manager for funding must be perceived as a program or project that supports overall organization strategy with minimal risk. Consider the Goodyear example in your course text reading this week (see pages 290-291), which focuses on a major investment in a new product-recapped tires. While this new product may have high stand-alone risk, note how and why that risk actually mitigates overall stockholder risk due to its diversification properties.To prepare for this Discussion, consider your organization or one with which you are familiar, and its current riskiness. Develop an idea for a new product or service that has the potential to generate a good return on investment at reasonable or even high stand-alone risk but that has an opportunity to lower the organization's overall risk. Post by Day 3:Develop an argument as to why your suggested project has the potential to reduce the organization's overall risk. Be sure to identify at least two risk measurement tools used in the readings that you would deploy to measure the overall risk in the organization, and explain why your choices are appropriate for the situation.To complete your Discussion, click on Discussions on the course navigation menu, and select "Week 4 Forum" to begin.
The firm owns this money. The market portfolio generates the payoff (200, 250, 300) and has an expected return of 8%. The risk free rate is 3%. Suppose CAPM holds.
Ignoring income taxes, how much is the net present value of the proposed investment?
The fats about the family.
the corporation is evaluating a project that will cost 150000 it is expected to last for 8 years and produce before-tax
International business comprises currency market and what should be the price of the same disc in Mexico
Bond interest payments before and after taxes Charter Corp. has issued 2 ,500 debentures with a total principal value of $2,500,000. The bonds have a coupon interest rate of 7%. a. What dollar amount of interest per bond can an investor expect to..
The $850 strike put premium is $25.45 and the $850 strike call is selling for $30.51. Calculate the breakeven index price for a strategy employing a short call and long put that expires in 6 months. Interest rates are 0.5% per month.
rossdale inc. had additions to retained earnings for the year just ended of 575000. the firm paid out 140000 in cash
Describe why does personal growth and development seem more urgent today than they were in the past and where should I look for the resources to support personal growth and development?
You just purchased a bond that matures in 4 years. The bond has a face value of $1,000 and has an 9% annual coupon. The bond has a current yield of 7.63%. What is the bond's yield to maturity? Round your answer to two decimal places.
mcgilla golf has decided to sell a new line of golf clubs. the clubs will sell for 733 per set and have a variable cost
Suppose you deposited the $1000 in 4 payments of $250 each at year 1, year 2, year 3, and year 4. How much would you have in your account at year 4, based on 8 percent annual compounding?
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