Case Study: Dell Research

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Dell Research The assignment being completed in this report has two major parts. The first major part relates to what a beta coefficient is and what the beta coefficients are for Dell and two other companies of the author's choosing. The second part of the assignment asks the author of this paper to identify and describe two events that required capital investment, one of them short-term and one of them long-term. All of the material involved in this paper is to be referenced. Beta Coefficients A beta coefficient, often shorted to just the word "beta", is the perceived measure of volatility of a stock, security or portfolio as compared to the market as a whole. Another way to describe the berm is systematic risk. A beta over 1.0 is indicative of a stock that is more volatile than the market overall. For example, a beta of 1.20 is a stock that is twenty percent more volatile than the market. A beta of below 1.0 would be a stock that is less volatile than the market. A beta of 0.8 is a stock that is twenty percent less volatile than the market (Investopedia, 2012). When assessing stocks or other investments for a portfolio the beta is a measure of how volatile the stock would be as compared to an "average" investment since the market as a whole is the yardstick used for the beta coefficient. The current beta for Dell as of early September 2012 was 1.40 (Spencer, 2012). The next question to be answered on this report is to calculate the cost of equity using the CAPM
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