1.

In this discussion question, you will apply risk and return analysis to the organization's cost of capital.

There are many financial models that attempt to explain how securities are valued based on risk versus return. Briefly describe some of these alternative models and how the various types of risks effect the valuation of equity within the models. What do the models have in common? How do the models differ? How can investors minimize the risk "inherent" within securities?

2.

In this discussion question you determine the organization's cost of capital.

How is the cost of capital calculated? What are theelementsthat comprise cost of capital? How is the "value" of each component determined? How does the organization use the cost of capital?