Financial Manager Answering CEO Question Suppose that you are a financial manager at a large international company.
Your CEO (Chief Executive Officer) wants to ask you a few questions related to corporate finance. Please see the CEO’s email to you.
CEO questions:
Question 1: I have been thinking about what capital budgeting techniques to use for our investment selection criteria. Please explain why IRR (Internal Rate of Return) is not the best capital budgeting technique.
– Question 2: In relation to the estimation of cost of equity, please compare the dividend growth model and security market line approaches.
