Case Study Analysis Cost Of Capital At Ameritrade Finance Essay

Case Study Analysis Cost Of Capital At Ameritrade Finance Essay Capital Asset Pricing Model is a model that describes the relationship between risk and expected return  and  that is used in the pricing of risky securities. Description: Capital Asset Pricing Model (CAPM) The general idea behind CAPM is that investors need to be compensated in two ways: time value of money  and risk. The time value of money is represented by the risk-free(rf) rate  in the formula and compensates the investors for placing money in any investment over a period of time. The other half of the formula represents risk and calculates the amount of compensation the investor needs for taking on  additional risk. This is calculated by taking a risk measure (beta)  that compares the returns of the asset to the market over a period of time and to the market premium (Rm-rf). The CAPM says that the expected return of a security or a portfolio equals the rate on a risk-free security plus a risk premium. If this expected return does not meet or beat the required retur n, then the investment should not be undertaken. The security market line plots the results of the CAPM for all different risks (betas). Using the CAPM model  and the following assumptions, we can compute the expected return of a stock in this CAPM example: â€Å"if the risk-free rate is  3%, the beta (risk measure) of the stock is 2 and the expected market return over the period is 10%, the stock is expected to return 17% (3%+2(10%-3%))†. CAPM has a lot of important consequences. For one thing it turns finding the efficient frontier into a doable task, because you only have to calculate the co-variances of every pair of classes, instead of every pair of everything. Another consequence is that CAPM implies that investing in individual stocks is pointless, because you can duplicate the reward and risk characteristics of any security just by using the right mix of cash with the appropriate asset class. This is why followers of MPT avoid stocks, and instead build portfolios out of low cost index funds. â€Å"Cap-M† looks at risk and rates of return and compares them to the overall stock market. If you use CAPM you have to assume that most investors want to avoid risk, (risk averse), and those who do take risks, expect to be rewarded. It also assumes that investors are â€Å"price takers† who can’t influence the price of assets or markets. With CAPM you assume that there are no transactional costs or taxation and assets and securities are divisible into small little packets. CAPM assumes that investors are not limited in their borrowing and lending under the risk free rate of interest. How to Calculate the Cost of Equity CAPM The cost of equity is the amount of compensation an investor requires to invest in an equity investment. The cost of equity is estimable is several ways, including the capital asset pricing model (CAPM). The formula for calculating the cost of equity using CAPM is the risk-free rate plus beta times the market r isk premium. Beta compares the risk of the asset to the market, so it is a risk that, even with diversification, will not go away. As an example, a company has a beta of 0.9, the risk-free rate is 1 percent and the expected return on the equity investment is 4 percent.

Media production Essay Example | Topics and Well Written Essays - 2500 words

Media production - Essay Example The settings of this film can be illustrated through the luxury portrayed by the Italian director Luca Guadagnino through choice of settings, thereby making the movies a form of European art film. For instance, the film utilizes lavish costumes, sets, elaborate pacing, and nuanced mise-en-scene; in fact, this form of visual poetry and opulent imagery is not common in European movies. The film is set during Christmas through an aperture sequence to reveal Milan during the winter. Furthermore, the film is made in spectacular mansion of the affluent Recchi family, thereby developing a scene, which evokes Visconti’s â€Å"The Leopard.† For example, this mise-sn-scene is portrayed during a gathering by the family for a birthday dinner in honour of patriarch Edoardo Recchi (Swinton), who is a stylish and reserved head of the family. Another scene through which elegance, luxury and beauty is portrayed in the film is when, a young man names Antonio joins the family at the house to deliver a cake to Edo and he is introduced to Emma. At this point, the Luca Guadagnino's I Am Love offers complete digression into the privileged world attributed to impossible of luxury and sophistication, which numerous Hollywood’s Golden Age film tries to achieve (Noh, 2010, 1). On the other hand, Yorick Le Saux’s photography skills presented magnificent designs of these scenes by focusing in the aspect of timelessly archetypal attires by Fendi. For instance, Swinton appearance portrayed Raf Simons to be a fashion genius in making his film debut. A new scene in this film is developed through a rigorous editing in order to establish a context of natural environ. In this case, there are master shots created through progression of speedy cuts of shots in order to offer a representation of the entire scene. Apparently, this new scene is strident in terms of its presentation; though there is difficulty in understanding the way these new surroundings are introduced. B esides, the movies do not present the transition from one scene to another in interesting ways to viewers’ consciousness. Instead, presentation of new scenes is focused on reforming viewers’ understanding of the new scene to fit into the narrative. The film presents another mise-sn-scene in a restaurant where Emma is dinning with her mother-in-law and prospect daughter-in-law. Apparently, Emma is stirred up by the prawn prepared by Antonio; in fact, this is a scene that depicts a transition from 2D to 3D and smell-o-vision. On the other hand, performance by Swinton in this mise-en-scene precisely depicts Emma's arousal by the food. In fact, this forms a brilliant scene in the film while viewers watch as Emma lose control of her senses while her inhibitors take control of her for the rest of the movie. In addition, the movie has a temperate pace, through it gas speedy cutting for sense alteration, and so does the Recchi family. Nonetheless, there are few things that occ ur in the film, though they are enough to make it captivating. Therefore, mise-en-scene of the film is attributable to powerful visual cues, which narrates the story and catalyze the narrative’s transition from plot to plot. Camera Work Camera works make the film splendid, whereby Guadagnino uses different angles by positioning the camera in unusual spots. In fact, this makes the film has few

The Operations and Performance of the Hilton Hotel Case Study

The Operations and Performance of the Hilton Hotel - Case Study Example The purpose of the Hilton Hotel is to provide adequate accommodation facilities, quality food, and drinks along with recreational facilities to their visitors. The hotel aims to be constantly pleasurable to the visitors, invest in their workers and innovate better and newer products for their visitors. They also intend to augment their owners' value and reinforce their loyalty to their constituents. The manager considers the management of supplies to the hotels the most difficult challenge he encounters. This is because the products have to meet certain standards before the business makes their purchases. There are also many suppliers willing to provide their supplies to the hotels and this makes the approval of their tenders a tiresome activity. The products have to undergo several tests to determine their quality and safety before they are purchased. The process of getting approval for the funds to be spent is also very long. These tenders have to be approved by the management comm ittees before the funds are released. This also takes a lot of time and hampers the operations of the hotel. The Hotel’s profits have been on the rise over the years and their financial performance is relatively good. The shareholders of the hotel also receive substantial dividends on their investments. This is because the hotel accommodates many visitors throughout the year from all around the globe. The business owns over three thousand hotels in seventy-four countries that have a very good reputation for their services and products. The financial condition of the hotels enables the managers to effectively carry out the activity of running the business. He is able to pay the workers, purchase supplies on a regular basis for the hotel and renovate the premises regularly. The profitability of the organization has enabled the hotel's management to open up new branches across the globe.