Compare the beta to a similar company. Is it higher or lower?

Respond to the following prompts individually in 100 words each.
1. The systematic risk principle states that the reward for bearing risk depends only on the systematic risk of an investment. Because systematic risk is the crucial determinant of an asset’s expected return, we need some way of measuring the level of systematic risk for different investments. The specific measure we will use is called the beta coefficient, for which we will use the Greek symbol β. A beta coefficient, or beta for short, tells us how much systematic risk a particular asset has relative to an average asset.

Go to the Yahoo! Finance website (link below) and select a company of your choice to research. Enter the name of the company that you have selected in the search box.

https://finance.yahoo.com (opens in new window)

Respond to the following questions in the discussion forum:

What is the beta for the company you selected? What does the beta measure for this asset?
Compare the beta to a similar company. Is it higher or lower?
Compare the beta for two additional companies from a different sector, such as healthcare or communications. Describe the differences and similarities.
2.
The ideal mixture of debt and equity for a firm—its optimal capital structure—is the one that maximizes the value of the firm and minimizes the overall cost of capital. The pandemic has changed the economic environment, and still impacting the world. Research an article about how the pandemic has impacted a company’s capital structure.
Respond to the following questions in the discussion forum:

What changes have occurred as a result of the pandemic?
Do you think the changes will continue in a post-pandemic environment?

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